Caldera to acquire Western Australian

Caldera Resources Inc. has entered into a letter of intent (LOI) with Western Australian Diamonds Inc. (WAD) of Vancouver B.C. to enter into a friendly merger (the Transaction).

Under the terms of the Transaction, Caldera and WAD will enter into a statutory plan of arrangement, whereby Caldera and WAD will merge their businesses into a new or pre-existing entity (Amalco) pursuant to an arrangement agreement, the result of which will have each common share or convertible security of WAD exchanged for one common share or convertible security of Amalco, and each common share or convertible security of Caldera exchanged for 0.20 (the “Conversion Ratio”) of an Amalco common share or convertible security of Amalco. The exercise price of the Caldera convertible securities shall be adjusted in accordance with the Conversion Ratio.

Both Caldera and WAD have agreed to pay the other a break fee of $200,000 in certain circumstances if the Transaction is not completed.

Completion of the Transaction is subject to the negotiation and execution of a definitive agreement, and the receipt of all required approvals, including those from the Shareholders of Caldera and the TSX as well as the completion of a private placement or other equity financing to raise a minimum of $4,000,000 concurrently with the closing of the Transaction. There can be no assurance that the Transaction will be completed as proposed or at all. It is intended that a meeting of the shareholders of Caldera will be held as soon as possible to seek approval of the Transaction and it is anticipated that this meeting will be held on or before September 15, 2008.

WAD has agreed to advance Caldera up to $500,000 to fund its ongoing expenses pending closing of the Transaction. WAD will fund these expenses through a private placement financing of WAD. Caldera has the right to complete its own financing by way of private placement to fund its ongoing expenses subject to certain conditions.

Source : http://www.marketwire.com/mw/release.do?id=849551&k=diamonds

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