Dundee Precious Metals Enters Into Letter of Intent with PJV Resources and Rodeo Capital to Sell Its Timok Gold Project
January 25 2010 - 8:15AM
Marketwired
Dundee Precious Metals Inc. (TSX: DPM)(TSX: DPM.WT)(TSX: DPM.WT.A)
("DPM" or "the Company") is pleased to announce it has entered into
a letter of intent with PJV Resources Inc. ("PJV"), a private
company, and Rodeo Capital Corp. ("Rodeo"), a capital pool
corporation listed on the TSX Venture Exchange ("TSXV"), for the
sale of its Timok gold project located in Serbia through the sale
of DPM's Serbian subsidiary, Dundee Plemeniti Metali d.o.o.
("Metali"). Prior to the closing of the Transaction (as defined
below), DPM will cause, subject to government approvals, a
reorganization (the "Reorganization") of its Serbian subsidiaries,
as a result of which certain assets and liabilities not forming
part of the Timok project, will be transferred by Metali to another
Serbian subsidiary of DPM.
As consideration for the sale, DPM shall receive approximately
US$1.4 million in the return of cash held to secure certain
concession obligations, a number of units ("Vendor Units") in the
capital of PJV, such that, upon the completion of the Business
Combination (as defined below) component of the Transaction, DPM
will hold 60% of the issued and outstanding capital of the issuer
resulting from the Business Combination (the "Resulting Issuer"),
on a non-diluted basis, with the remaining 40% representing
holdings of shares outstanding as of the closing of the
Transaction, including the shares that will be sold as part of an
initial financing of PJV. The initial financing of PJV will
generate gross proceeds of a minimum of $25,000,000 (the "Minimum
Financing") with respect to which PJV has entered into an
engagement letter with Dundee Securities Corporation. Each Vendor
Unit will be comprised of one PJV common share and one half of a
warrant. Each whole warrant will be exercisable for one common
share for a period of not less than two years and at an exercise
price not greater than $0.40 per warrant. In addition, upon
completion of a feasibility study (as defined in NI 43-101) on all
or part of the Timok Project, DPM shall be issued 25,000,000 common
shares in the capital of the Resulting Issuer, and an additional
25,000,000 common shares of the Resulting Issuer upon a positive
decision being made by the Resulting Issuer to bring all or any
part of the Timok project into production (a total of 50,000,000
common shares if the Resulting Issuer proceeds directly to a mining
decision without a feasibility study).
"We view this transaction as a very positive step forward in the
continued development of the Timok prospect", said Jonathan
Goodman, President and CEO of DPM. "It is a step that facilitates
DPM's continued participation in Serbia while it pursues its
mine/mill expansion and new mine development opportunities in
Bulgaria."
The PJV acquisition of Metali will be a component of a wider
transaction (the "Transaction") whereby, as a subsequent step to
the acquisition, a three-cornered amalgamation ("Business
Combination") will be effected pursuant to which PJV (as financing
and acquisition corporation) will amalgamate with a wholly-owned
subsidiary of Rodeo, and all of the securities of PJV (including
those issued to DPM as part of the sale of its Timok project), will
be exchanged for securities of Rodeo. The Transaction shall
constitute a Qualifying Transaction (as defined in the policies of
the TSXV) for Rodeo.
The Transaction is subject to various conditions, including
among other things, approval of the Reorganization and the
Transaction by the Serbian government, completion of satisfactory
due diligence, entering into definitive agreements, all applicable
regulatory approvals and completion of the Minimum Financing. The
letter of intents will terminate at the earliest of (i) January 30,
2010 if either DPM or PJV has not completed satisfactory due
diligence in respect of Rodeo, (ii) on April 30, 2010 or (iii) the
date of execution of a definitive agreement in respect of the
Transaction.
Dundee Precious Metals Inc. is a Canadian based, international
mining company engaged in the acquisition, exploration, development
and mining of precious metals. DPM owns the Chelopech Mine, a
producing gold/copper mine, and the Krumovgrad Gold Project, a
mining development project, both located in Bulgaria, as well as a
95% interest in the Kapan Mine in Armenia. In addition, it is
engaged in mineral exploration activities in Serbia.
FORWARD-LOOKING STATEMENTS
This news release may contain certain information that
constitutes forward-looking statements. Forward-looking statements
are frequently characterized by words such as "plan," "expect,"
"project," "intend," "believe," "anticipate" and other similar
words, or statements that certain events or conditions "may" or
"will" occur. Forward-looking statements are based on the opinions
and estimates of management at the date the statements are made,
and are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those projected in the forward-looking statements.
These factors include the inherent risks involved in the
exploration and development of mineral properties, the
uncertainties involved in interpreting drilling results and other
geological data, fluctuating metal prices and other factors
described above and in the Company's most recent annual information
form under the heading "Risk Factors" which has been filed
electronically by means of the Canadian Securities Administrators'
website located at www.sedar.com. The Company disclaims any
obligation to update or revise any forward-looking statements if
circumstances or management's estimates or opinions should change.
The reader is cautioned not to place undue reliance on
forward-looking statements.
Contacts: Dundee Precious Metals Inc. Jonathan Goodman President
& Chief Executive Officer (416) 365-2408
jgoodman@dundeeprecious.com Dundee Precious Metals Inc. Stephanie
E. Anderson Executive Vice President & CFO (416) 365-2852
sanderson@dundeeprecious.com Dundee Precious Metals Inc. Lori Beak
Vice President, Investor Relations & Corporate Secretary (416)
365-5165 lbeak@dundeeprecious.com
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