Alamos Gold Inc. (TSX:AGI)(NYSE:AGI) ("Alamos" or the "Company")
today announced that, in connection with its previously announced
offer (the "Offer") to acquire all of the outstanding shares of
Aurizon Mines Ltd. ("Aurizon"), it has waived the minimum tender
condition (the "Minimum Tender Condition") under the Offer as
described in the bid circular dated January 14, 2013 (the
"Circular"). The Company also announced that, as a result of such
change to the terms of the Offer, it is required to extend the
expiry date of the Offer until 5:00 p.m., Toronto time, on March
19, 2013. All other terms of the Offer remain unchanged.
Alamos has decided to waive the Minimum Tender Condition
primarily because, based on expressions of support from several
large shareholders of Aurizon received following the Hecla
proposal, Alamos fully expects to receive at least an additional
17.3% of the outstanding Aurizon shares in order to defeat the
merger of Aurizon with Hecla as proposed by the Aurizon Board. The
US$500 million debt financing for the Hecla acquisition proposed by
the Aurizon board is conditional upon Hecla receiving the support
of holders of at least 66 2/3% of the Aurizon shares. Alamos will
oppose the Hecla proposal.
In relation to the Hecla acquisition proposed by the Aurizon
Board of Directors, Alamos notes the following:
-- Timing of Option by Aurizon Board - Hecla has disclosed that it had
confidential discussions regarding merging Hecla with Aurizon on
December 18, 2012. On December 18, 2012 and December 20, 2012, the
Aurizon Board of Directors awarded itself and Aurizon officers more than
1.1 million options. The Aurizon Board has been critical of the Alamos
Offer as opportunistic and inadequate at C$4.65, yet at the same time
awarded themselves 1.1 million options at C$3.61.
-- Fairness Opinion - Bank of Nova Scotia, which is acting as financial
advisor to the Aurizon Board, presumably on a success fee basis, has
delivered an opinion to the Aurizon Board that the Hecla offer is fair
to Aurizon shareholders. Bank of Nova Scotia is also lending Hecla the
US$500 million it is using to finance its bid for Aurizon.
-- Value of Alamos Offer - The Aurizon Board has repeatedly claimed that
the Alamos Offer undervalues the Aurizon assets, yet the Hecla proposal
which the Aurizon Board approved has only a marginally higher cash per
share amount (ten cents) and generally is an inferior offer representing
far greater risks for Aurizon shareholders. Further, the expenses of
multiple teams of financial and legal advisors retained by the Aurizon
board and special committee materially diminish the value of Aurizon as
part of a post-transaction merged company.
-- Possible Illegal Break Fee - The Aurizon Board has agreed to give Hecla
C$27.2 million of Aurizon shareholders' money if Alamos acquires merely
an additional 17.3% of the of the Aurizon shares under the terms of
Alamos's existing Offer. This payment is not contingent on Alamos
increasing its offer, another offer emerging, or any additional value
being created for Aurizon shareholders, as is typically the case. Alamos
intends to challenge this break fee as it believes it may constitute an
improper defensive tactic or be otherwise inconsistent with take-over
bid law in Canada.
-- Hecla is Borrowing Heavily Against Aurizon to Finance the Acquisition -
Alamos can afford this acquisition, while it appears that Hecla cannot.
The company resulting from the Hecla - Aurizon merger proposed by the
Aurizon board will have up to US$500 million in debt. Under the Alamos
Offer, the combined company would have no debt.
-- Hecla has Hedged the Gold Production of the Combined Company - Under the
terms of its debt financing for this acquisition, Hecla has agreed to
hedge at least US$450 million of revenues from gold production. This
significantly reduces the exposure of Aurizon shareholders to any upside
in the gold price. Under the Alamos Offer, the combined company would be
unhedged.
-- Aurizon Shareholders will receive Hecla Shares - As a result of the pro-
ration mechanism under the Hecla offer, it is likely that all Aurizon
shareholders tendering to the Hecla offer will receive Hecla shares as
consideration, and will not receive cash only.
"The company that would be created by the combination of Alamos
and Aurizon represents far greater value than the highly-leveraged,
hedged, debt-laden, financially constrained company proposed by the
Aurizon board through the Hecla merger," said John A. McCluskey,
President and Chief Executive Officer. "Just two weeks ago, we
reported by far the best quarter and year-end results in our
history. Alamos is among the lowest-cost gold producers and has no
debt, a robust balance sheet, excellent cash flow, and an
attractive near-term growth profile.
"Our goals over the next few years include achieving production
that positions us as one of the 25 largest gold mining companies in
the world, while remaining among the 10 lowest-cost mining
companies in the world," Mr. McCluskey said.
How to Tender
Aurizon shareholders are encouraged to continue tendering their
shares by completing the Letter of Transmittal included in the
documents mailed by Alamos. Kingsdale Shareholder Services Inc.
("Kingsdale") is available to assist and can be reached at
1-866-851-3214 (North American Toll Free Number) or 416-867-2272
(outside North America). For shareholders whose certificates are
not immediately available or who cannot deliver the certificates
and all other required documents to Kingsdale prior to the expiry
time, they may accept the Offer by properly completing and duly
executing a Notice of Guaranteed Delivery and returning it to
Kingsdale as specified in the Notice of Guaranteed Delivery. If
Aurizon Shares are held by a broker or other financial
intermediary, Aurizon shareholders should contact such intermediary
and instruct it to tender their Aurizon Shares.
The Offer is open for acceptance until 5:00pm (Toronto time) on
March 19, 2013, unless extended or withdrawn.
About the Offer
Alamos announced the Offer on January 14, 2013. Alamos filed the
take-over bid circular (the "Circular") and related documents with
the securities regulatory authorities in Canada and the United
States on January 14, 2013. Aurizon shareholders are advised to
read the Circular, the Notice of Extension and Variation dated
February 19, 2013 (the "First Notice") and the Notice of Extension
and Variation to be mailed by Alamos (the "Second Notice") as they
contain important information, including the terms and conditions
of the Offer and the procedures for depositing shares. Additional
information about the Offer or copies of the Circular, the First
Notice or the Second Notice may be obtained free of charge from
shareholders' investment advisers, from Dundee Capital Markets,
which is acting as Alamos' dealer manager, Kingsdale, which is
acting as Alamos' depositary and information agent, at
1-866-851-3214 (North American Toll Free Number) or 416-867-2272
(outside North America) or by directing a request to the Investor
Relations department of Alamos at 416-368-9932 (ext. 401).
On January 14, 2013, Alamos filed with the United States
Securities and Exchange Commission (the "SEC") a Registration
Statement on Form F-10 and a Tender Offer Statement on Schedule TO,
each of which includes the Circular. Alamos encourages shareholders
of Aurizon to read the full details of the Offer set forth in the
Circular, the First Notice and the Second Notice, which, together,
contain the full terms and conditions of the Offer and other
important information as well as detailed instructions on how
Aurizon shareholders can tender their Aurizon Shares to the Offer.
Investors may also obtain a free copy of the Circular, the First
Notice and the Second Notice and other disclosure documents filed
by Alamos from the System for Electronic Document Analysis and
Retrieval at www.sedar.com and from the SEC's website at
www.sec.gov.
Kingsdale has advised Alamos that, as of 5:00 p.m. (Toronto
time) on March 4, 2013, 18,004,432 Aurizon Shares had been validly
tendered and not withdrawn to the Offer, representing approximately
10.26% of the issued and outstanding Aurizon Shares. Aurizon
shareholders who have already tendered their Aurizon Shares do not
have to re-tender their Aurizon Shares or take any other action as
a result of the extension of the expiry time of the Offer. To date,
Alamos has not issued any Alamos shares or cash in connection with
the Offer.
This press release does not constitute an offer to buy or the
solicitation of an offer to sell any of the securities of Alamos or
Aurizon.
About Alamos
Alamos is an established Canadian-based gold producer that owns
and operates the Mulatos Mine in Mexico, and has exploration and
development activities in Mexico and Turkey. The Company employs
more than 600 people and is committed to the highest standards of
environmental management, social responsibility, and health and
safety for its employees and neighbouring communities. Alamos has
over US$350 million cash and short-term investments, is debt-free,
and unhedged to the price of gold. As of February 19, 2013, Alamos
had 127,455,786 common shares outstanding (132,326,086 shares fully
diluted), which are traded on the TSX and NYSE under the symbol
"AGI".
Cautionary Note
No stock exchange, securities commission or other regulatory
authority has approved or disapproved the information contained
herein. This News Release includes certain "forward-looking
statements". All statements other than statements of historical
fact included in this release, including without limitation
statements regarding forecast gold production, gold grades,
recoveries, waste-to-ore ratios, total cash costs, potential
mineralization and reserves, exploration results, and future plans
and objectives of Alamos, are forward-looking statements that
involve various risks and uncertainties. These forward-looking
statements include, but are not limited to, statements with respect
to mining and processing of mined ore, achieving projected recovery
rates, anticipated production rates and mine life, operating
efficiencies, costs and expenditures, changes in mineral resources
and conversion of mineral resources to proven and probable
reserves, and other information that is based on forecasts of
future operational or financial results, estimates of amounts not
yet determinable and assumptions of management.
Exploration results that include geophysics, sampling, and drill
results on wide spacings may not be indicative of the occurrence of
a mineral deposit. Such results do not provide assurance that
further work will establish sufficient grade, continuity,
metallurgical characteristics and economic potential to be classed
as a category of mineral resource. A mineral resource that is
classified as "inferred" or "indicated" has a great amount of
uncertainty as to its existence and economic and legal feasibility.
It cannot be assumed that any or part of an "indicated mineral
resource" or "inferred mineral resource" will ever be upgraded to a
higher category of resource. Investors are cautioned not to assume
that all or any part of mineral deposits in these categories will
ever be converted into proven and probable reserves.
Any statements that express or involve discussions with respect
to predictions, expectations, beliefs, plans, projections,
objectives, assumptions or future events or performance (often, but
not always, using words or phrases such as "expects" or "does not
expect", "is expected", "anticipates" or "does not anticipate",
"plans", "estimates" or "intends", or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved) are not statements of historical fact
and may be "forward-looking statements." Forward-looking statements
are subject to a variety of risks and uncertainties that could
cause actual events or results to differ from those reflected in
the forward-looking statements.
There can be no assurance that forward-looking statements will
prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ
materially from Alamos' expectations include, among others, risks
related to international operations, the actual results of current
exploration activities, conclusions of economic evaluations and
changes in project parameters as plans continue to be refined as
well as future prices of gold and silver, as well as those factors
discussed in the section entitled "Risk Factors" in Alamos' Annual
Information Form. Although Alamos has attempted to identify
important factors that could cause actual results to differ
materially, there may be other factors that cause results not to be
as anticipated, estimated or intended. There can be no assurance
that such 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.
Note to U.S. Investors
Alamos prepares its disclosure in accordance with the
requirements of securities laws in effect in Canada, which differ
from the requirements of U.S. securities laws. Terms relating to
mineral resources in this presentation are defined in accordance
with National Instrument 43-101 - Standards of Disclosure for
Mineral Projects under the guidelines set out in the Canadian
Institute of Mining, Metallurgy, and Petroleum Standards on Mineral
Resources and Mineral Reserves. The United States Securities and
Exchange Commission (the "SEC") permits mining companies, in their
filings with the SEC, to disclose only those mineral deposits that
a company can economically and legally extract or produce. Alamos
may use certain terms, such as "measured mineral resources",
"indicated mineral resources", "inferred mineral resources" and
"probable mineral reserves" that the SEC does not recognize (these
terms may be used in this presentation and are included in the
public filings of Alamos, which have been filed with the SEC and
the securities commissions or similar authorities in Canada).
The TSX and NYSE has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Contacts: Alamos Gold Inc. Jo Mira Clodman Vice President,
Investor Relations (416) 368-9932 x 401 Kingsdale Shareholder
Services Inc. North American Toll-Free: (866) 851-3214 Outside
North America: (416) 867-2272
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