MEGA AND ROLLING ROCK ANNOUNCE DEFINITIVE BUSINESS COMBINATION AGREEMENT

Mega Precious Metals Inc. (TSX-V:MGP) (“Mega”) and Rolling Rock Resources Corporation (TSX-V:RLL) (“Rolling Rock”) jointly announced today that they have entered into a definitive business combination agreement pursuant to the previously announced letter agreement dated September 23, 2010. Under the definitive agreement, Mega will acquire, by way of a three-cornered amalgamation, all of the outstanding common shares of Rolling Rock in a supported, all-share transaction. Rolling Rock shareholders (other than Mega) will receive 0.4 common shares of Mega for each common share of Rolling Rock. Based on Mega’s closing price on September 23, 2010, the day immediately preceding the announcement of the letter agreement, the exchange ratio represented a 37.0% premium over Rolling Rock’s 20-day volume weighted average share price as of that date.

Jim Rogers, President and CEO of Mega stated, “The acquisition of Rolling Rock is a critical step toward the realization of Mega’s strategic business plan.  The Monument Bay Project, which Rolling Rock acquired from Bema Gold and Wolfden Resources in 2006, fits well in our project portfolio and is known to our management team.  I am excited by the opportunity to champion this project and am confident that Mega’s experienced team has the expertise to realize this project’s potential.”

Rolling Rock’s Board of Directors has unanimously recommended that shareholders vote in favour of the Mega transaction.  Each director and officer of Rolling Rock has entered into a support agreement to vote in favour of the transaction (in aggregate approximately 2.3% of the outstanding Rolling Rock shares). A support agreement has also been entered into with Pinetree Capital Ltd. (approximately 17.2% of the outstanding Rolling Rock common shares). In aggregate, holders of a total of 19.5% of the outstanding Rolling Rock common shares have agreed to vote in favour of the transaction.

Mega currently owns, and exercises control or direction over, 9,900,000 common shares of Rolling Rock (representing approximately 18.8% of the outstanding Rolling Rock common shares). Pinetree Capital Ltd. owns, or exercise control or direction over, 7,755,631 common shares of Mega (representing approximately 17.6% of the outstanding Mega common shares) and 7,868,000 common shares of Rolling Rock (representing approximately 17.2% of the outstanding Rolling Rock common shares).

Scott Angus, President and CEO of Rolling Rock stated, “We believe that this business combination will be of great value to the existing shareholders of Rolling Rock. With the technical experience and proven track record of Mega’s board of directors and management team, I look forward to the future development of the Monument Bay Project.”

Terms of the Transaction

• There are currently 44,068,780 Mega common shares outstanding and 52,675,000 Rolling Rock common shares outstanding. Rolling Rock shareholders (other than Mega) will receive 0.4 common shares of Mega for each common share of Rolling Rock. Upon completion of the transaction, Rolling Rock shareholders (other than Mega) will own approximately 17.1 million shares or 27.9% of the resulting 61.1 million Mega shares outstanding.
  
• Completion of the transaction is subject to customary conditions, including a favourable vote of at least two-thirds of the shares voted at a special meeting of Rolling Rock shareholders (including the minority shareholder approval required under National Instrument 61-101) and the receipt of all necessary regulatory approvals, including the approval of the TSX-V. The definitive agreement includes a non-solicit clause and provides for the payment of a $450,000 break fee to Mega in certain circumstances.
  
• A special meeting of shareholders of Rolling Rock to approve the transaction is scheduled to be held be held on December 7, 2010. Rolling Rock expects to mail an information circular providing full details of the transaction to Rolling Rock shareholders in mid-November 2010.
  
• The transaction will be carried out by way of a three-cornered amalgamation under the provisions of the Business Corporations Act (British Columbia). Assuming Rolling Rock shareholders approve the transaction at the special meeting, and necessary regulatory approvals are obtained, the transaction is expected to close in mid-December 2010.

 

Rolling Rock’s Board of Directors recommends that holders of Rolling Rock shares vote in favour of the transaction. Dundee Securities Corporation has provided an opinion to the Rolling Rock Board of Directors that the consideration to be received by Rolling Rock shareholders under the transaction is fair, from a financial point of view, to the Rolling Rock shareholders, other than Mega. The transaction has also been approved by Mega’s Board of Directors.

PowerOne Capital Markets Limited is acting as financial adviser to Mega in connection with the transaction.

About Mega

Mega Precious Metals Inc. is a well financed Canadian-based mineral exploration company with several projects in Northwestern Ontario, Nunavut and the Yukon. The Company is committed to an accelerated growth strategy and is backed by a team of experienced mining experts and a strong financial position. The Company is poised for rapid expansion through quick response to new opportunities and changes in the market. Mega’s common shares trade on the TSX Venture Exchange under the symbol MGP. For further information and presentation material, please review the Mega website at  www.megapmi.com