VANCOUVER, May 20, 2011 /PRNewswire/ - Capstone
Mining Corp. ("Capstone" or the "Company") (TSX: CS) announces the
mailing of its Information Circular's with respect to the
previously announced arrangement agreement (the "Arrangement
Agreement") pursuant to which Capstone will acquire all of the
issued and outstanding common shares of Far West Mining Ltd. ("Far
West") (TSX:FWM) and Far West would be held through a newly-formed
subsidiary of Capstone, to be owned 70% by Capstone and 30% by
Korea Resources Corporation ("KORES").
Far West shareholders will be entitled to elect to receive, in
exchange for each Far West share held, (i) 1.825 shares of Capstone
and C$1.00 in cash, or (ii) 2.047 shares of Capstone and C$0.001 in
cash, or (iii) C$9.19 cash, subject to proration on the basis of an
aggregate maximum cash amount of approximately up to C$79 million
and provided that no Far West shareholder that elects option (iii)
above will receive less than C$1.00 in cash per Far West share.
Shareholders of Capstone and securityholders of Far West will
each vote on the Arrangement Agreement at special meetings to be
held concurrently on June 13, 2011 and if it is approved at both
meetings, the proposed transaction is expected to become effective
on or about June 16, 2011. The directors, senior officers,
Quadra FNX and certain other shareholders of Far West, representing
38% of the filly-diluted Far West shares outstanding as at May 11,
2011, have entered into voting support agreements with Capstone,
whereby they have agreed to vote their Far West shares in favor of
the Arrangement Agreement. Capstone's directors and senior
management have entered into voting support agreements to vote
their Capstone shares in favour of the Arrangement Agreement and
Capstone's largest shareholder, Pala Investments Holding Limited,
holding 19.6% of Capstone's issued and outstanding shares as at May
13, 2011, has advised Capstone management that it intends to vote
its Capstone shares in favor of the Arrangement Agreement.
Capstone has also agreed to form a long-term strategic
partnership with KORES for the development of Far West's Santo
Domingo Project. Concurrent with the completion of the
Arrangement Agreement, KORES (through an affiliated company) will
(i) acquire a 30% interest in the entity that will own the Santo
Domingo project for cash consideration of up to approximately C$210
million to Capstone, and (ii) subscribe for an approximate 11%
interest in Capstone, at a price of C$4.35 per share, for aggregate
cash consideration of approximately C$170-183 million subject to
completion of the Far West transaction.
Full details of the proposed transaction are contained in the
Information Circular that has been mailed to Capstone
shareholders. A copy of the Information Circular and related
documentation has been filed with Canadian securities regulators
and is available at the SEDAR website at www.sedar.com under
Capstone's profile.
Forward-Looking Statements
This document may contain "forward-looking
information" within the meaning of Canadian securities legislation
and "forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995
(collectively, "forward-looking statements"). These forward-looking
statements are made as of the date of this document.
Forward-looking statements relate to future
events or future performance and reflect Capstone management's
expectations or beliefs regarding future events and include, but
are not limited to, statements with respect to the timing and
implementation of the proposed transaction and the integration of
Capstone and Far West following the transaction. Assumptions upon
which such forward-looking statements are based include that
Capstone and Far West will be able to satisfy the conditions in the
Arrangement Agreement, that the required approvals will be obtained
from the shareholders of each of Capstone and Far West, that all
third party, court, regulatory and governmental approvals to the
transaction will be obtained, tax treatment of the transaction and
that all other conditions to completion of the transaction will be
satisfied or waived. Many of these assumptions are based on factors
and events that are not within the control of Capstone and there is
no assurance they will prove to be correct.
In certain cases, forward-looking statements can
be identified by the use of words such as "plans", "expects" or
"does not expect", "is expected", "budget", "potential",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or statements that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "occur" or "be
achieved" or the negative of these terms or comparable terminology.
By their very nature forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of Capstone to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Such factors include, among others, risks related to
actual results of current exploration and development activities;
changes in project parameters as plans continue to be refined;
future prices of metals; possible variations in mineral reserves,
grade or recovery rates; accidents, labour disputes and other risks
of the mining industry; delays in obtaining governmental approvals
or financing or in the completion of development or construction
activities; as well as those factors detailed from time to time in
Capstone's interim and annual financial statements and management's
discussion and analysis of those statements, all of which are filed
and available for review on SEDAR at www.sedar.com. Although
Capstone 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. Capstone provides 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.
SOURCE Capstone Mining Corp.