Darnley Bay Resources Ltd. (TSXV:DBL) signed a non-binding letter of intent to acquire Canadian Arrow Mines Limited (TSXV:CRO) for CAD 2.9 million in stock on July 2, 2014. Darnley Bay will pay 0.82 shares of its common stock for each Canadian Arrow shares. Holders of options of Canadian Arrow will receive replacement options in Darnley Bay. There is a mutual break fee of CAD 0.2 million. The letter of intent provides that on completion of the proposed transaction the Board of Directors would initially be composed of six members consisting of three nominees from Darnley Bay and three nominees from Canadian Arrow. Kerry Knoll will serve as Chairman, while Darnley Bay's current President Jamie Levy will continue to serve as President and Chief Executive Officer of the combined companies.

The transaction is be subject to entering into a definitive agreement, receipt of all necessary consents, waivers, permits, exemptions, orders and approvals, including the approval of the TSX Venture Exchange, receipt of shareholder approval by Canadian Arrow shareholders to the proposed transaction and completion of an equity financing to raise not less than CAD 5 million. The deal is not subject to the approval of the shareholders of Darnley Bay.

Canadian Arrow Mines Limited believes that the proposed financing in the current equity markets has been difficult. Canadian Arrow and Darnley Bay continue to work together however, by mutual agreement the non-solicitation clause and other related clauses in the nonbinding agreement have been removed so that Canadian Arrow is free to discuss alternatives to the merger with additional interested parties. Although the Letter of intent remains in effect. Canadian Arrow believes that proposed business combination with DBL will not occur in the near term.

Darnley Bay Resources Ltd. (TSXV:DBL) cancelled the acquisition of Canadian Arrow Mines Limited (TSXV:CRO) on May 30, 2016.