Bema Gold Plans Bid
December 21 2004 - 2:01AM
UK Regulatory
RNS Number:6558G
Bema Gold Corporation
21 December 2004
Bema Gold Plans Bid to Increase Ownership of Arizona Star
Vancouver, December 20, 2004 - Bema Gold Corporation (TSX / AMEX: BGO, AIM: BAU)
announces that it intends to make an offer to all Arizona Star Resource Corp.
("Arizona Star") shareholders to exchange each Arizona Star share for 1.85
shares of Bema. The offer values Arizona Star at CDN$7.01 per common share based
on today's closing price and represents a premium of 33% based on the 20 day
moving average share prices for both companies. Bema currently owns 5% of the
common shares of Arizona Star. Bema owns 24% and Arizona Star owns 25% of the
Cerro Casale project located in Chile. Placer Dome Inc. ("Placer Dome") is the
operator and owns the remaining 51% of the project. All dollar figures are in US
dollars unless otherwise indicated.
Bema's President and CEO, Clive Johnson comments, "We regard this as an
opportunity to increase Bema's interest in the world class Cerro Casale deposit
which we believe is on the verge of moving into the development stage. We are
offering the Arizona Star shareholders, through the issuance of Bema shares,
continued exposure to Cerro Casale, superior market liquidity and participation
in Bema's dramatic growth profile as the Refugio, Kupol and Cerro Casale
projects are advanced to production."
The takeover bid will not be subject to a minimum tender condition. Bema intends
to mail a takeover bid circular to Arizona Star shareholders in January, 2005
with an expiry date of 35 days thereafter.
Accepting Bema's offer will provide the following benefits to the shareholders
of Arizona Star:
*A substantial premium to the current share price of Arizona Star
*Continued exposure to the advancement of Cerro Casale
*Superior share liquidity
*One of the best production growth profiles in the gold mining sector
*Proven management with a long history of dealing with Placer Dome and the
Cerro Casale project
*Common goal of working with Placer Dome to advance Cerro Casale to
production
*Proven ability to raise the capital required to participate pro rata in
the development of Cerro Casale
The shareholders of Bema will benefit from increased ownership in Arizona Star
as follows:
*Increased ownership of one of the world's largest undeveloped gold/copper
assets located in Chile
*A larger gold reserve base; each 10% increase in the ownership of Arizona
Star is equal to approximately 600,000 ounces*
*An increase in projected gold production of long term, low cost ounces
Bema expects to achieve several major milestones over the next 12 months
including:
*The recommencement of production at the Refugio Mine
*The scheduled completion of a new resource calculation, feasibility study
and production financing for the Kupol project
*Further exploration drilling at Kupol
*A decision from Placer Dome to either finance or return their interest in
the Cerro Casale project
* Cerro Casale resources will convert to reserves if Placer Dome makes a
production decision.
Cerro Casale is one of the world's largest undeveloped gold and copper projects.
A feasibility study completed by Placer Dome Technical Services Limited in
January 2000, and updated in March, 2004, outlined estimated measured and
indicated mineral resources of approximately 25.4 million ounces of gold and 6.4
billion pounds of copper. Based on the updated feasibility study's capital and
operating cost estimates as of March 2004 and the Chilean tax regime of that
date, and assuming a gold price of $400 per ounce and a copper price of $1.10
per pound, the project is projected to produce approximately 975,000 ounces of
gold annually at cash operating costs of $71 per ounce (net of copper credits)
and total costs of $186 per ounce (net of copper credits) for 18 years. The
total projected capital cost from the updated study is estimate at $1.65
billion. Placer Dome is required to arrange up to $1.3 billion in project
financing in order to retain their 51%. The partners are expected to participate
pro rata on anything above $1.3 billion. It estimated that Arizona Star's share
would be approximately $100 million.
Placer Dome has issued a certificate (Certificate B) under the shareholders'
agreement indicating it has commenced or is continuing to use reasonable
commercial efforts to arrange financing for the Cerro Casale project on
commercially reasonable and customary terms in accordance with the financing
requirements of the shareholders' agreement. Subject to the terms of the
shareholders' agreement, Placer Dome has approximately 12 months to arrange such
financing. Placer Dome is also advancing discussions on key commercial contracts
and long-term marketing off-take arrangements. If Placer Dome elects not to
proceed with the project and it is still deemed financable under the terms of
the shareholders agreement, it will relinquish their interest in Cerro Casale.
Bema's offer will only be made by way of a formal offer and take over bid
circular and remains subject to the terms and conditions thereof.
On Behalf of BEMA GOLD CORPORATION
"Clive T. Johnson"
Chairman, C.E.O., & President
For more information on Bema Gold please contact Investor Relations at (604)
681-8371 or toll-free 1-800-316-8855 or alternatively contact our web-site at
www.bema.com.
To speak to a Company representative please contact:
Ian MacLean Derek Iwanaka
Manager, Investor Relations Investor Relations
604-681-8371, investor@bemagold.com 604-681-8371, investor@bemagold.com
The Toronto Stock Exchange neither approves nor disapproves the information
contained in this News Release. Bema Gold Corporation trades on the Toronto
Stock Exchange (TSX) and the American Stock Exchange (AMEX). Symbol: BGO. Bema
Gold also trades on the London Stock Exchange's Alternative Investment Market
(AIM). Symbol" BAU.
Some of the statements contained in this release are "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance
or achievements to differ materially from the anticipated results, performance
or achievements expressed or implied by such forward-looking statements.
Forward-looking statements in this release include statements regarding: the
Company's projections regarding annual gold production in future periods.
Factors that could cause actual results to differ materially from anticipated
results include risks and uncertainties such as: risks relating to estimates of
reserves, mineral deposits and production costs; mining and development risks;
the risk of commodity price fluctuations; political and regulatory risks; and
other risks and uncertainties detailed in the Company's Form 40-F Annual Report
for the year ended December 31, 2003, which has been filed with the Securities
and Exchange Commission, and the Company's Renewal Annual Information Form for
the year ended December 31, 2003, which is an exhibit to the Company's Form 40-F
and is available at the Canadian Depository for Securities Web site. The Company
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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