A Long Wait....

But well worth it!

Galway agrees to $2.05-per-0.9-share takeover

2012-10-19 09:59 ET - News Release

Mr. Robert Hinchcliffe reports

GALWAY RESOURCES LTD. ANNOUNCES PREMIUM CASH OFFER FOR GALWAY SHAREHOLDERS AND THE SPIN OUT OF THE VETAS AND VICTORIO PROJECTS

Galway Resources Ltd. has executed an arrangement agreement with AUX Acquisition 2 SARL and its wholly owned Ontario subsidiary, under which AUX has agreed to acquire all of the outstanding common shares of Galway (other than common shares of Galway held by AUX and its affiliates) by way of a plan of arrangement.

Under the transaction Galway shareholders will receive Cdn$2.05 in cash, 0.9 of a share in a new company to hold the Vetas gold project and 1.0 share in a new company to hold the Victorio tungsten-molybdenum project. The new companies will be well capitalized with US$18 million of cash and US$12 million of cash, respectively. Upon closing of the transaction, existing Galway shareholders will hold 90% of the Vetas SpinCo and 100% of the Victorio SpinCo. AUX will have the right to nominate one director for election to the board of directors of the Vetas SpinCo.

The Cdn$2.05 per share cash consideration represents a premium of approximately 47% over the volume weighted average trading price of Cdn$1.39 per Galway Share on the TSX Venture Exchange ("TSX-V") for the 20-trading days ending on October 18, 2012. It is anticipated that the Arrangement will close on or before December 31, 2012.

"We are extremely pleased with this transaction as we believe it represents great value for shareholders. We also look forward to creating ongoing value for Galway shareholders through the advancement of the Vetas and Victorio projects. Both projects have excellent infrastructure and tremendous geological upside,"said Robert Hinchcliffe, President and CEO of Galway. "I'd really like to thank Galway's employees in Colombia for all their diligent efforts."

In addition, AUX has entered into lock-up agreements with certain officers and directors of Galway, pursuant to which these shareholders have agreed, subject to certain conditions, to exercise the voting rights attached to their Galway Shares in favour of the Arrangement.

The board of directors of Galway (the "Board"), based in part on a fairness opinion from National Bank Financial Inc. that the consideration offered in the Arrangement is fair, from a financial point of view, to Galway shareholders, other than AUX, has unanimously determined that the completion of the Arrangement is in the best interests of Galway shareholders. The Board has unanimously resolved to recommend that Galway's shareholders vote in favour of the Arrangement.

A summary of the opinion given by National Bank Financial Inc., the factors that were considered by the Board in approving the Arrangement, and other material background information relating to the Arrangement, will be included in the Management Information Circular to be mailed to Galway's securityholders in connection with a special meeting of Galway, which is expected to be held in early to mid December, 2012 (the "Meeting") to approve the Arrangement.

Completion of the Arrangement is subject to, among other things, i) the affirmative vote at the Meeting of at least two-thirds (66 2/3%) of the votes cast by all Galway shareholders ii) approval of the Superior Court of Justice of Ontario; and iii) receipt of all required regulatory approvals, including acceptance of the transaction by the TSX-V.

A copy of the Arrangement Agreement will be filed with Canadian securities regulatory authorities and will be available under Galway's profile on the SEDAR website, at www.sedar.com. It is currently expected that the Management Information Circular to be prepared in connection with the Meeting will be mailed to Galway's securityholders in early November, 2012, and those materials will also be available at www.sedar.com.

Galway's financial advisor in connection with the Arrangement is National Bank Financial Inc. and its legal advisor is Stikeman Elliott LLP. AUX's financial advisor is BMO Capital Markets, and its legal counsel is Cassels Brock & Blackwell LLP.