TORONTO, September 10, 2014 /PRNewswire/ --
Mandalay Resources Corporation ("Mandalay") (TSX: MND)
and Elgin Mining Inc. ("Elgin") (TSX: ELG) are pleased to announce
the completion of the acquisition of Elgin by Mandalay by way of a
court-approved plan of arrangement (the "Arrangement").
Mr. Brad Mills, Chief Executive
Officer of Mandalay, commented, "I am pleased to announce that we
have successfully closed the Elgin transaction as planned, adding
Elgin's Björkdal gold mine in Sweden as Mandalay's third producing mine in a
top mining jurisdiction. We welcome all of the Elgin and Björkdal
staff who are joining Mandalay and have worked hard to complete
this transaction. We currently expect that the Björkdal mine will
produce 8,000 to 10,000 ounces of gold during the fourth quarter of
the year, which increases our overall 2014 Mandalay production
guidance to a range of 138,000 to 148,000 ounces of gold
equivalent."
Mr. Mills continued, "Our plans for the Björkdal mine will
immediately focus on refining the life of mine resource and reserve
model for the open pit and underground mines, improving the grade
of production of both mines based upon this more granular model,
evaluating and adopting new milling approaches in the plant to
improve gold recovery and expand plant capacity. We will also
evaluate all of the exploration potential on the property and
commence an exploration program to expand reserves. We anticipate
that we will start to see results from these efforts within the
next three to six months. The first milestone will be the release
of a new independent Technical Reserve and Resource Report which
Mandalay has commissioned on the property."
Mr. Mills concluded, "In connection with our acquisition of
Elgin, Mandalay has reviewed its property portfolio and decided to
sell two assets which are now deemed non-core to our future plans.
These assets are the Lupin gold mine, in Nunavut, Canada, and the La Quebrada
copper-silver project in Chile."
The Plan of Arrangement
Pursuant to the Arrangement, Mandalay acquired each outstanding
Elgin common share (each, an "Elgin
Share") in exchange for CDN$0.37 in cash (the "Cash
Consideration") or 0.4111 of a Mandalay common share (each, a
"Mandalay Share") (the "Share Consideration"),
subject to pro-ration if the aggregate Cash Consideration would
exceed CDN$27 million or the
aggregate Share Consideration would exceed 50 million Mandalay
Shares.
Based on valid elections received prior to the election deadline
and deemed elections, shareholders of Elgin (the "Elgin
Shareholders") elected to receive:
- the Share Consideration in respect of 188,980,537 Elgin Shares
(which, at 0.4111 of a Mandalay Share per Elgin Share, would result in aggregate Share
Consideration of approximately 77.7 million Mandalay Shares);
and
- the Cash Consideration in respect of 4,461,519 Elgin Shares
(which, at CDN$0.37 per Elgin Share, would result in aggregate Cash
Consideration of approximately CDN$1.7
million).
Since the aggregate Share Consideration would otherwise exceed
50 million Mandalay Shares, all elections (including deemed
elections) have been pro-rated in the manner described in the
management information circular dated July
25, 2014 prepared by Elgin in connection with the
Arrangement. This has resulted in the number of Mandalay Shares
that each Elgin Shareholder exchanged for the Share Consideration
being reduced by applying an approximate 64.358% pro-ration
factor.
For illustrative purposes only, and using the example of an
individual holding 1,000 Elgin Shares:
- if such Elgin Shareholder elected to receive Cash Consideration
in respect of all of their Elgin Shares held, the Elgin Shareholder
would be entitled to receive CDN$370
(being CDN$0.37 for each Elgin Share); or
- if such Elgin Shareholder elected (or was deemed to have
elected) to receive Share Consideration in respect of all of their
Elgin Shares, the Elgin Shareholder would be entitled to receive
approximately 264 Mandalay Shares in consideration for a portion of
their Elgin Shares and CDN$131.88
cash in consideration for the remaining portion of the Elgin
Shares.
Any questions or requests for assistance in surrendering
certificates that formerly represented Elgin Shares in order to
receive the Arrangement consideration may be directed to the
depository, Computershare Investor Services Inc., by telephone at
1-800-564-6253 toll-free in North
America, 1-514-982-7555 outside of North America or by e-mail at
corporateactions@computershare.com.
De-listing of the Elgin Shares from the Toronto Stock Exchange
("TSX") is expected to occur shortly. Concurrent with the delisting
of the Elgin Shares, Elgin will apply to all applicable Canadian
securities regulatory authorities in order to cease to be a
reporting issuer.
About Mandalay Resources Corporation
Mandalay Resources is a Canadian-based natural resource company
with producing assets in Australia
and producing and development projects in Chile. Mandalay is focused on executing a
roll-up strategy, creating critical mass by aggregating advanced or
in-production gold, copper, silver and antimony projects in
Australia and the Americas to
generate near-term cash flow and shareholder value.
Forward-Looking Statements
This news release contains forward-looking statements within
the meaning of securities legislation and which are based on the
expectations, estimates and projections of management of Mandalay
as of the date of this news release unless otherwise stated,
including statements regarding Mandalay's estimates of future
production, its plans for the Björkdal mine and its planned sale of
the Lupin and La Quebrada properties. Readers are cautioned not to
place undue reliance on forward-looking statements. Actual results
and developments may differ materially from those contemplated by
these statements depending on, among other things, changes in
commodity prices and general market and economic conditions. The
factors identified above are not intended to represent a complete
list of the factors that could affect Mandalay. A description of
additional risks that could result in actual results and
developments differing from those contemplated by forward-looking
statements in this news release can be found under the heading
"Risk Factors" in Mandalay's annual information form dated
March 28, 2014, a copy of which is
available under Mandalay's profile
at http://www.sedar.com. Although Mandalay
has attempted to identify important factors that could cause actual
actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results not to be as anticipated,
estimated or intended. 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. Accordingly, readers should not
place undue reliance on forward-looking statements.
Image with caption: "Mandalay Resources Corporation (CNW
Group/Mandalay Resources Corporation)". Image available at:
http://40rhel5streamview01.newswire.ca/media/2014/09/10/20140910-761633-42734-5c28e3ce-b114-49cd-9889-c3532704a75b.jpg
Image with caption: "Elgin Mining Inc. (CNW Group/Mandalay
Resources Corporation)". Image available at:
http://40rhel5streamview01.newswire.ca/media/2014/09/10/20140910-761633-42736-5c28e3ce-b114-49cd-9889-c3532704a75b.jpg
For further information:
Bradford Mills
Chief Executive Officer
Greg DiTomaso
Investor Relations
Contact:
+1-647-260-1566