Silver Lake Resources Limited. : PRH: Proposed Merger with Silver Lake Resources

Transaction Summary

• Phillips River Mining Limited (ASX: PRH) ("Phillips River" or "the  Company") and Silver Lake Resources Limited (ASX: SLR) ("Silver  Lake") have today executed a Merger Implementation Agreement  ("MIA") to effect the acquisition of 100% of the issued shares in  Phillips River by Silver Lake, under a Scheme of Arrangement  ("Scheme").

• Phillips River shareholders will receive 0.0882 Silver Lake shares  for each Phillips River share they hold(1). The acquisition  consideration represents a 39% premium to the 30 day VWAP of  Phillips River to 23 January 2012 compared to Silver Lake's  shareprice at close of trade 23 January 2012 and implies a fully  diluted value for Phillips River of approximately A$20 million.

• Phillips River's Board of Directors unanimously recommends that  all Phillips River shareholders vote in favour of the Scheme in the  absence of a superior proposal.

Overview of Offer

The Board of Directors of Phillips River is pleased to announce that it has  received an all scrip offer, under which Silver Lake proposes to acquire all  of the issued shares of Phillips River by way of a Scheme ("Offer").

Under the proposed Scheme, Silver Lake will offer Phillips River  shareholders consideration of 0.0882 Silver Lake shares for each Phillips  River share they own. The offer price values the fully diluted equity of  Phillips River at approximately A$20 million.

Silver Lake will also, within the next seven days, finalise the documentation  for and make available to Phillips River a $1.3 million secured convertible  note facility ("Facility"). The provision of the Facility eliminates short term  funding risk for Phillips River and provides the Company with sufficient  working capital to continue activity on its tenement portfolio. The key terms  of the Facility are set out in Schedule 5 of the MIA attached at Annexure A.

In a volatile and uncertain market, the Offer provides shareholders with an opportunity to realise  significant value for their shares. Based on the 30 day VWAP of Phillips River to 23 January 2012 the  Offer represents a 39% premium when compared to Silver Lake's shareprice at close of trade 23  January 2012.

The Phillips River Board of Directors has carefully evaluated Silver Lake's Offer and unanimously  recommends it to Phillips River shareholders in the absence of a superior proposal. All Phillips River  Directors intend to accept Silver Lake's Offer with respect to their own share and option holdings.

Phillips River Board

Following implementation of the Merger the current Board of Phillips River will resign. 

Commenting on the proposed merger, Phillips River Managing Director, Mr Jason Stirbinskis, said: 

"Silver Lake is a successful producer with a strong balance sheet and growth prospects. We believe  this backing and expertise will accelerate the realisation of the value within Phillips River's extensive  portfolio".

Background to Offer

Phillips River holds a highly prospective tenement portfolio of over 2,500km2in the south of Western  Australia. The region and the portfolio are highly prospective for gold, copper and polymetallic  mineralisation. The Phillips River project, is located 20 kilometres southeast of Ravensthorpe and  includes two mining areas, Kundip, which is primarily a gold and copper deposit and Trilogy, a large  polymetallic deposit.

Silver Lake is an ASX 200 gold producing and exploration company with a resource base of  approximately 3.3 million oz in highly prospective regions including Mount Monger and the Murchison  goldfields of Western Australia.

Transaction Implementation

The proposed merger will be implemented via the Scheme. In order to enable Phillips River to bring  Silver Lake's offer before shareholders, Phillips River and Silver Lake have entered into the MIA,  which is set out in full at Annexure B.

The Scheme is subject to conditions including:

• court approval;

• no material adverse change in Phillips River or Silver Lake;

• relevant regulatory approvals;

• an independent expert opining that the Scheme is in the best interests of shareholders;

• Silver Lake being satisfied, in its absolute discretion, with its due diligence by 18 February  2012;

• approval by a simple majority of Phillips River shareholders present in person or by proxy at  the scheme meeting that will be called in relation to the Scheme ("Scheme Meeting") and  also by at least 75% of the votes cast at that Scheme Meeting; and

• other customary conditions.

The MIA also contains customary and reciprocal deal protection mechanisms, including no shop and  no talk provisions, matching and notification rights in the event of a competing proposal and a break  fee payable by Phillips River to Silver Lake in specified circumstances.

In due course, Phillips River shareholders will receive a comprehensive scheme booklet that will  contain full details of the proposed Scheme, the basis for Phillips River's Board's recommendation  and an independent expert's report.

Indicative Timetable for Completion

Announcement of proposed merger	25 January 2012
First Court Hearing	March 2012
Dispatch Scheme Booklet to Phillips River Shareholders	March 2012
Phillips River Scheme Meeting	May 2012
Final Court Hearing	May 2012
Implementation of Merger	May 2012

Advisers to Transaction

Allion Legal is acting as Phillips River's legal adviser.

Gilbert & Tobin is acting as Silver Lake's legal adviser.

Further Information

Requests for further information are to be directed as follows:

Jason Stirbinskis - Managing Director

[phone]

The text for this noodl has been truncated. To continue reading this document, please get the original version at: http://docs.noodls.com/viewDoc.asp?filename=72210/EXT/BF4E9DEDBCD2D7ED2D0A9A63E25BC2ACA06E0712_B1D96467724518DAD09ADCEA72B5A93A8AD99C78.PDF