Zinc

[johnlw]

Selkirk Metals and Doublestar plan merger

2007-03-02 06:05 ET - News Release

See News Release (C-SLK) Selkirk Metals Corp

Mr. Gordon Keevil of Selkirk reports

SELKIRK METALS AND DOUBLESTAR RESOURCES TO MERGE TO ACCELERATE DEVELOPMENT OF THEIR FLAGSHIP RUDDOCK CREEK PROPERTY

Selkirk Metals Corp. and Doublestar Resources Ltd., joint venture partners since 2004 in the Ruddock Creek zinc-lead property 100 kilometres north of Revelstoke, have executed a binding letter of intent intended to merge their businesses. The combined assets of both companies, should the merger proceed as currently planned, would result in approximately $14-million in current assets and a strong suite of British Columbia base metal mineral projects.

The merger is expected to proceed based on a court-approved plan of arrangement under the British Columbia Business Corporations Act.

Under the terms of the transaction, it is proposed that each existing Class A share of Doublestar will be exchanged for one-half of one common share of Selkirk. In addition, all existing warrants of Doublestar and the outstanding stock options of Doublestar held by certain employees will be exchanged for economically equivalent warrants and options of Selkirk, based upon the same exchange ratio described above.

Gordon Keevil, president of Selkirk, stated: "This transaction, which is financially positive to Selkirk, will consolidate the working interest in the Ruddock Creek property putting Selkirk in a much stronger position to advance its exploration and ultimate development. Furthermore, Selkirk looks forward to the addition of Doublestar's excellent portfolio of properties, which will enhance our already strong and diverse property base. We will continue to aggressively advance all of these properties to create greater value for our shareholders, including those we are inheriting from Doublestar through this transaction. We are also looking forward to working on an ongoing basis with the management of Doublestar to achieve the best possible results on behalf of the shareholders of both Selkirk and Doublestar."

Alan Savage, chief executive officer of Doublestar, said: "Doublestar's board of directors fully supports the Selkirk proposal. This transaction can effect enhanced shareholder value for both companies by placing the world-class potential of the Ruddock Creek zinc-lead deposit under one roof. In addition, the combination of Doublestar's other resource assets, including the large Catface copper deposit, with those of Selkirk will create one of the strongest base metal mineral deposit portfolios in British Columbia. We are extremely optimistic for a positive outcome for shareholder value based on this transaction, and I look forward to working with the board of directors of Selkirk in that regard."

Completion of the transaction, which is expected to occur in late June, 2007, is subject to a number of conditions, including:

* satisfactory completion of due diligence by both parties and execution of a definitive agreement by no later than March 31, 2007;
* receipt of all necessary shareholder, court, regulatory and third party approvals; and
* the absence of any material adverse change in the business of either Selkirk or Doublestar.

The parties intend to work toward executing a definitive agreement by no later than March 31, 2007, and will, thereafter, prepare a formal information circular describing the transaction in more detail and deliver that circular to all shareholders of Doublestar, who will be asked to approve the transaction at a meeting expected to be held in mid-June, 2007. The approval of Selkirk shareholders is not expected to be required in order to complete the transaction.

All directors and officers of Doublestar (and their respective affiliates and associates) have entered into or have agreed to enter into support agreements with Selkirk pursuant to which they have agreed to support the transaction and vote all shares of Doublestar held by them in favour of the transaction.

Selkirk and Doublestar will keep shareholders updated on the progress of the transaction as developments warrant.

We seek Safe Harbor.