CALGARY, ALBERTA -- (Marketwire) -- 11/29/12 -- Solara Exploration Ltd. (TSX VENTURE:SAA.A) ("Solara" or the "Corporation") announces its unaudited consolidated financial and operating results for the nine months ended September 30, 2012. The Financial Statements and Management's Discussion and Analysis ("MD&A") were filed on November 28, 2012 and are available for viewing on the System for Electronic Disclosure and Analysis ("SEDAR") at www.sedar.com.
The Corporation also advises that as previously announced, it entered into an Amalgamation Agreement dated August 30, 2012 (the "Amalgamation Agreement") with Verity Energy Ltd. ("Verity"). On October 24, 2012, the shareholders of the Corporation and Verity authorized the directors of both companies to proceed with the Amalgamation of the two companies to form Corso Energy Ltd. ("Corso"), subject to a number of conditions including but not limited to final approval by the TSX Venture Exchange and certain conditions as set out in the Amalgamation Agreement. The Amalgamation Agreement is subject to a number of conditions many of which have yet to be satisfied and which have not been waived. These conditions include the requirement that Corso have working capital of not less than $3 million and there being no material adverse change in the parties. One of the primary conditions to the completion of the Amalgamation is the closing of the previously announced best efforts Private Placement (the "Private Placement"). The Private Placement currently provides for three financing products comprised of $5 million of Units of Common Shares and Common Share Purchase Warrants, $6 million of 8.5% Convertible Subordinated Debentures and $3 million of Flow-Through Common Shares. The Corporation has been actively raising funds for the Private Placement and a subsequent Press Release will be issued on the status of the Private Placement and the Amalgamation.
The Corporation also advises as previously reported that in September, 2012, the Corporation was not compliant with its principal lender's working capital covenant and other adverse effects including a significant reduction in loan value which required the continued financial support of the Corporation's lender to continue its business activities. On September 21, 2012, the Corporation entered into a revised credit facility agreement with its principal lender. The agreement provided for a loan extension to October 31, 2012, which was further extended by amendment to November 30, 2012. The initial extension was provided on the basis that the Corporation agreed to reduce its Revolving Operating Demand Loan of $15 million by $150,000 per month with effect as of August 6, 2012. The credit facility also provided for an increased rate of interest on the loan to prime plus 3% per annum. The extension to November 30, 2012 was predicated on the Corporation obtaining commitments in the Private Placement of $10 million and acceptance by 80% of the Corporation's trade and unsecured creditors to the proposal to those creditors which was part of the Corporation's debt reduction program. The lender also agreed to delay the reduction in the Corporation's Revolving Operating Demand Loan of $150,000 per month.
This news release may contain certain forward-looking statements, including management's assessment of future plans, acquisitions and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
108,710,732 Class A Common Shares
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.
Ross O. Drysdale
On Behalf of the Board of Directors
Solara Exploration Ltd.