Apr 28, 2010
Merrex Gold Distribution of Frontline Shares as Reduction of Capital
HALIFAX, NOVA SCOTIA -- (Marketwire -- April 28, 2010) - Gregory Isenor, P.Geo., President and CEO of Merrex Gold Inc. ("Merrex")(TSX Venture: MXI) announces that the Supreme Court of British Columbia has granted an order authorizing the distribution of 18,675,000 shares of Frontline Gold Corporation ("Frontline Shares") as a reduction of Merrex capital.
"Merrex has declared a one-time distribution of 18,675,000 Frontline Shares to be distributed on May 1, 2010 to shareholders of record at April 15, 2010" said Gregory Isenor, President and CEO of Merrex. "Merrex sought and obtained an Order of the Supreme Court of British Columbia authorizing a reduction in Merrex capital by C$3,174,750 concurrently with the distribution of the Frontline Shares. The result of this court order is that Merrex shareholders will receive a partial return of their paid-up capital and not a dividend."
Distribution of Frontline Shares as Reduction of Capital
The British Columbia Supreme Court has granted an Order authorizing Merrex to reduce its capital by C$3,174,750 concurrently with the special, non-recurring, distribution of capital, namely 18,675,000 Frontline Shares. The result of this court order is that Merrex shareholders will receive a return of capital and not a dividend. For Canadian federal tax purposes, distribution recipients will not treat the distribution of Frontline Shares as a dividend received during 2010. Distribution recipients will have to reduce the adjusted cost base ("ACB") of their Merrex shares by an amount equal to the value of the distributed Frontline Shares, i.e. C$0.17 x the number of Frontline Shares received. Recipients who have a negative ACB as a result of the reduction are deemed to have realized a capital gain equal to the negative amount and the ACB will thereupon be reset to zero. For Canadian federal tax purposes, the Frontline Shares received will have an ACB of C$0.17 each.
The above statements are of a general nature only and should not be construed as, nor are they intended to be, legal or tax advice or representations to any particular Merrex shareholder. Accordingly, shareholders (both residents and non-residents of Canada) should consult with their own tax advisors with respect to the income tax consequences of the distribution having regard to their own particular circumstances.
Frontline Gold Corporation holds the advanced stage Niaouleni Gold Project in southwest Mali (see www.frontlinegold.com).
Merrex is a Mali focused gold exploration company with experienced management, a solid exploration team, a prominent gold-producer as a partner and an expanding gold resource ... a winning combination offering investors an extraordinary opportunity.
Please visit our website at www.merrexgold.com for the most recent presentation.
FOR FURTHER INFORMATION PLEASE CONTACT:
On Behalf of the Board
Gregory Isenor, P.Geo.
President & CEO
Merrex Gold Inc.
1550 Bedford Highway
Suite 802, Sun Tower
Bedford, NS B4A 1E6
Tel.: (902) 832-5555
Fax: (902) 832-2223
Renmark Financial Communications Inc.
Jason Roy: [email protected]
Barbara Komorowski: [email protected]
Tel.: (514) 939-3989 or (416) 644-2020
This press release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future exploration drilling, exploration activities and events or developments that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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