Capstone Mining Mails Information Circular with Respect to Acquisition of Far West and Strategic Partnership and Joint Venture w
May 20 2011 - 4:53PM
PR Newswire (Canada)
VANCOUVER, May 20, 2011 /CNW/ -- VANCOUVER, May 20, 2011 /CNW/ -
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. To view this
news release in HTML formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/May2011/20/c6649.html p
Capstone Mining Corp.br/ Cindy Burnett, VP Investor Relationsbr/
Telephone: 604-637-8157br/ Email: a
href="mailto:cburnett@capstonemining.com"cburnett@capstonemining.com/abr/
Website: a
href="http://www.capstonemining.com/"www.capstonemining.com/a /p
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