Elgin Mining and Gold-Ore Resources Announce Merger Creating Growth Oriented International Gold Producer, Developer and Explorer
- Conference call Wednesday, February 1, 2012 - 4:30 pm EST (1:30 pm PST) - - call-in details below -
(firmenpresse) - VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/01/12 -- Elgin Mining Inc. (TSX VENTURE: ELG) ("Elgin Mining") and Gold-Ore Resources Ltd. (TSX: GOZ) ("Gold-Ore") are pleased to announce the execution of an arrangement agreement to complete a business combination (the "Transaction"), whereby Elgin Mining will acquire all of the issued shares of Gold-Ore by way of a plan of arrangement. The Transaction will result in a well-funded, growth-oriented gold producer with Gold-Ore's producing Bjorkdal gold mine in Sweden and Elgin Mining's Lupin and Ulu gold development projects in Nunavut, Canada. Bjorkdal produced 40,338 ounces of gold in fiscal 2011. Excluding Lupin, pro forma mineral resources for Elgin Mining upon completion of the Transaction will be over 1,191,700 ounces of Measured and Indicated mineral resources and approximately 756,500 ounces of Inferred mineral resources (Note: A table of Mineral Resources and Mineral Reserves is shown at end of this news release). The combined company will have the financial resources and management expertise for accelerated development and growth.
A conference call for the investment community will take place as noted at the end of this news release.
Transaction Highlights:
The Transaction values Gold-Ore at $1.22 per common share based on the 10-day volume weighted average price of Elgin Mining ($1.15 of share value and $0.07 of warrant value) and represents a premium of 66.5% over the same period. Each Gold-Ore shareholder will receive one common share of Elgin Mining and one half of one common share purchase warrant of Elgin Mining exercisable at a strike price of $1.30 per Elgin Mining share with a two year term, for each Gold-Ore common share held. Each half warrant has been valued at $0.07 using the Black-Scholes method with a volatility assumption of 30%, term of 2 years, an exercise price of $1.30 per share, a reference 10-day volume weighted average price of $1.15 and an assumed risk free interest rate of 0.95%.
Elgin Mining's President and CEO, Patrick Downey commented, "The combination of Elgin Mining and Gold-Ore will create a strong international gold company with a solid portfolio of production and exploration assets in the politically safe jurisdictions of Canada and Sweden. Gold-Ore's Bjorkdal mine will provide meaningful cash flow which will fund the company's future exploration and development activities. The combined company's profile will be very attractive to current and future investors as a larger, diversified company with immediate production and future upside. We will continue to review quality opportunities that add to our resource inventory and production profile."
Glen Dickson, Chairman and CEO of Gold-Ore commented, "The Transaction provides Gold-Ore shareholders with significant and immediate value for their shares. Furthermore, with the Lupin mine fully permitted and the limited capital exposure for re-start of operations, our shareholders will participate in a rapid and meaningful ramp-up of production. We believe that the strategic and financial rationale of our Transaction is beneficial to Gold-Ore's shareholders, employees and other stakeholders."
Elgin Mining's Transaction will provide the following benefits to the shareholders of Gold-Ore:
The shareholders of Elgin Mining will benefit from ownership in Gold-Ore as follows:
Resolute Funds Limited, as manager of Resolute Performance Fund, Gold-Ore's largest shareholder, has entered into a lock-up agreement with Elgin Mining in support of the Transaction in respect of 15,000,000 common shares of Gold-Ore representing approximately 17% of the issued and outstanding common shares on a non-diluted basis.
The Transaction includes a commitment by Gold-Ore and Elgin to not solicit an alterative transaction to the Transaction. Each company has agreed to pay a break fee to the other company of $2.8 million upon the occurrence of certain events. The Transaction has been declared a "Superior Proposal" as defined by an agreement signed by Gold-Ore and Astur Gold Corp. ("Astur") and will result in the payment of a break fee of $2.5 million by Gold-Ore to Astur. The previously announced transaction between Gold-Ore and Astur has been terminated.
Patrick Downey will continue in his role as President and Chief Executive Officer and Bob Buchan will remain Chairman of the Board. Robert Wasylyshyn will continue on as interim COO. Gold-Ore directors, David Mullen, Ronald Ewing, Glen Dickson and Robert Wasylyshyn will join the expanded board of directors.
The Transaction will be conditional upon certain conditions of completion, including receipt of all necessary regulatory approvals, absence of material adverse changes and holders of at least 66 2/3% of the total votes cast by Gold-Ore shareholders approving the Transaction at a meeting of Gold-Ore shareholders. The Transaction will also be subject to the approval of 50% plus one of the total votes cast by Elgin Mining shareholders voting in favour of the Transaction.
Additional Details of the Transaction
Full details of the Transaction will be included in respective information circulars and a joint proxy circular to be filed with securities regulatory authorities and mailed to Gold-Ore and Elgin Mining shareholders in early March. It is anticipated that the shareholders meeting of both Elgin Mining and Gold-Ore to approve the Transaction will occur in early April. Closing of the Transaction is anticipated in late April.
Elgin Mining has engaged National Bank Financial Inc. ("NBF") to act as financial advisor to the Company in connection with the Transaction. Legal counsel to Elgin Mining is Cassels Brock & Blackwell LLP. NBF has provided an opinion to the board of directors of Elgin Mining that, as of the date thereof, the consideration to be paid under the Transaction is fair, from a financial point of view, to the shareholders of Elgin Mining.
Gold-Ore's financial advisor is Fraser Mackenzie Limited ("Fraser Mackenzie") and its legal counsel is McLeod & Company LLP. Fraser Mackenzie has provided an opinion to the board of directors of Gold-Ore that, as of the date thereof, the consideration to be paid under the Transaction is fair, from a financial point of view, to the shareholders of Gold Ore.
Conference Call Information
A conference call for the investment community will take place to discuss the Transaction on February 1, 2012, at 4:30 pm Eastern time (1:30 pm Pacific time). Investors, analysts, media and other interested parties are invited to attend. To join the call please dial the following:
The conference call replay will be available from 6:00 p.m. EST on February 1, 2012 until 11:59 p.m. EST on February 15, 2012.
The presentation referenced on the conference call will be made available for download on Elgin Mining's website at and Gold-Ore's website at . A replay of the call will be available by dialing 800-408-3053 and entering passcode 4167801# or by accessing the link to the recording that will be posted to Elgin Mining's website shortly after the conference call.
Resources & Reserves
Gold-Ore: Bjorkdal Reserves & Resources
Ulu Project
Qualified Person
Vivian Park, the Manager, Exploration of Elgin Mining and a Qualified Person as defined by National Instrument 43-101, has reviewed and approved of the written technical disclosure contained in this press release on behalf of Elgin Mining.
Robert Wasylyshyn, P.Geo., President and COO of Gold-Ore and a Qualified Person as defined by National Instrument 43-101, has reviewed and approved of the written technical disclosure contained in this press release on behalf of Gold-Ore.
Elgin Mining Inc.
Elgin Mining is a Canadian based company focused on the exploration and development of the Lupin gold mine and Ulu gold project, both located in Nunavut Territory, Canada. In addition, Elgin's portfolio includes a 35% interest in Auracle Resources, which is exploring the Mexican Hat property in Arizona, and an exclusive right and option to earn a 60% interest in Lincoln Mining's Oro Cruz (California) and La Bufa (Mexico) gold projects. Elgin Mining also selectively reviews opportunities to add advanced stage development projects to its portfolio.
For further information, please visit Elgin Mining's web site at .
Gold-Ore Resources Ltd.
Gold-Ore is a gold producing company focused in the low political risk jurisdiction of Sweden. The company's primary asset is the Bjorkdal Gold Mine, which has produced 1,050,000 ounces in the last 24 years. Drilling is expanding the resources indicating a long mine life at current gold prices. The company has a strong balance sheet, generates significant cash flow from gold sales, and remains un-hedged.
For further information, please visit Gold-Ore's web site at .
FORWARD-LOOKING STATEMENTS
Certain information set forth in this press release contains "forward-looking statements", and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements which include management's assessment of Elgin Mining's and Gold-Ore's future plans and operations and are based on each company's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "expects" "anticipates", "believes", "projects", "plans", and similar expressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Elgin Mining's and Gold-Ore's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Elgin Mining and Gold-Ore undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
The securities described herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale or issuance of these securities in any jurisdiction in which such offer, solicitation, issuance or sale would be unlawful.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Elgin Mining Inc.
Patrick Downey
President & Chief Executive Officer
(604) 682-3366
Gold-Ore Resources Ltd.
Glen Dickson
Chairman & Chief Executive Officer
(604) 687-8884
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Datum: 01.02.2012 - 21:01 Uhr
Sprache: Deutsch
News-ID 110149
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