Astur Gold and Gold-Ore Resources Announce $150 Million Merger Creating a European Leader in Gold Production, Development and...
December 16 2011 - 4:18PM
Marketwired Canada
Astur Gold Corp. (TSX VENTURE:AST)(FRANKFURT:CDC) ("Astur Gold") and Gold-Ore
Resources Ltd. (TSX:GOZ) ("Gold-Ore") are pleased to announce the joint
execution of a binding letter agreement to complete a business combination (the
"Transaction"), whereby Gold-Ore would acquire all of the issued shares of Astur
Gold by way of a plan of arrangement. The combined company, to be called "Astur
Gold Corp.", will be a well-funded, growth-oriented gold producer with a
portfolio of production and near-term production assets in Sweden and Spain. The
two companies have agreed to combine whereby each Astur Gold shareholder will
receive 2.35 common shares of Gold-Ore for each common share of Astur Gold, and
the combined company will affect a 3 for 1 roll back of its issued and
outstanding shares. The boards of directors of Astur Gold and Gold-Ore have
unanimously approved the terms of the Transaction, and strongly recommend that
shareholders vote in favour of the proposed Transaction.
Transaction Rationale:
-- A combination of strong cash flow and one of the largest undeveloped
gold projects in Western Europe, creating a new high growth European-
focused gold producer.
-- Combined reserves and Measured and Indicated resources of approximately
2.6 million ounces of gold and combined Inferred resources of
approximately 1 million ounces of gold (Note: NI 43-101 compliant
Resources and Reserves shown at end of news release).
-- Combined $22 million of cash, un-hedged production, and fully-funded to
take Salave through bankable feasibility and into development.
-- Combined management team of complementary financial and technical
experience with a proven track record of success of building and
operating gold mines and creating strong shareholder returns.
-- An attractive European growth platform with mining and development
expertise, and a view towards additional accretive merger and
acquisition activity in Europe.
-- Doubling of market capitalization to enhance capital markets exposure
and trading liquidity.
Glen Dickson, Chairman and CEO of Gold-Ore, stated: "The merger with Astur Gold
provides the Gold-Ore shareholders the opportunity to participate in the near
term development of Western Europe's most promising gold deposit. The Astur Gold
shareholders will benefit from Gold-Ore's cash and cash-flow to fund the Salave
deposit through feasibility and into initial development with no further
dilution. We are certain that shareholders of both companies will truly benefit
from the merger."
Cary Pinkowski, CEO and Director of Astur Gold, stated: "The combination of
Astur Gold and Gold-Ore is truly a complementary transaction bringing together a
strong platform of technical, operational and financial management. Our new
company will have a first mover advantage on consolidating the European gold
space and presents a strong growth profile focused on enhancing shareholder
value with the singular objective of becoming a major European gold producer."
Transaction Details
The proposed business combination between Astur Gold and Gold-Ore is expected to
be completed by way of a court-approved plan of arrangement whereby Gold-Ore
would acquire all of the issued shares of Astur Gold (the "Arrangement"). The
Transaction will be subject to certain standard conditions including: the
approval of holders of not less than 66 2/3% of the total votes cast by holders
of Astur Gold common shares; the approval of holders of not less than 50% plus
one vote of the total votes cast by holders of Gold-Ore common shares; execution
of definitive agreement; the approval of the Toronto Stock Exchange and TSX
Venture Exchange; and other customary closing conditions.
Gold-Ore currently has 85,402,309 shares outstanding and will issue 81,088,369
new shares for all outstanding shares of Astur Gold. A concurrent 3 for 1 roll
back of the new combined company will result in 55,496,893 shares outstanding.
Following the Transaction, Gold-Ore has agreed to change its name to "Astur Gold
Corp." and maintain Toronto Stock Exchange listing. Gold-Ore shareholders will
own 51.3% of the new company.
Full details of the Transaction will be included in the Gold-Ore management
information circular and the Astur Gold proxy statement, both of which are
expected to be mailed to their respective shareholders as soon as practical.
Under the terms of the Transaction, shareholders of Astur Gold will receive 2.35
common shares of Gold-Ore (the "Exchange Ratio") for each share of Astur Gold
held. All of Astur Gold's unexercised options will be exchanged for Gold-Ore
options with the number and exercise prices of such options to be adjusted based
on the Exchange Ratio.
The business combination includes a commitment by each of Astur Gold and
Gold-Ore to not solicit alternative transactions to the Transaction. Each
company has agreed to pay a break fee to the other party of $2.5 million upon
the occurrence of certain events.
Management Team and Board of Directors
The board and management structure of the combined company will draw on the
expertise of both companies. Glen Dickson, Robert Wasylyshyn, David Mullen and
Ron Ewing from the Board of Gold-Ore will become Directors of the new company.
Cary Pinkowski, Josh Crumb, and Sean Roosen will be the Astur Gold nominees to
the new Board of Directors. Glen Dickson will become non-executive Chairman of
the Board. Cary Pinkowski will assume the role of CEO, Robert Wasylyshyn will
assume the title of President, and Michael Kerfoot will become CFO. Emilio
Hormaeche will become President of Operations in Spain. Mike Surratt will become
the Chief Technical Advisor to the Board of the new company.
Advisors and Counsel
Astur Gold's legal counsel is Anfield Sujir Kennedy & Durno LLP. Haywood
Securities Inc. provided an independent opinion to the special committee of
Astur Gold's board of directors that, as of the date thereof and subject to the
assumptions, limitations and qualifications set out therein, the exchange ratio
is fair, from a financial point of view, to the shareholders of Astur Gold.
Gold-Ore's legal counsel is McLeod & Company LLP. Fraser Mackenzie Limited
provided an independent opinion to Gold-Ore's board of directors that, as of the
date thereof and subject to the assumptions, limitations and qualifications set
out therein, the exchange ratio is fair, from a financial point of view, to the
shareholders of Gold-Ore.
Conference Call
A joint conference call will be held by both companies on Monday, December 19,
2011 at 11:00 AM EST (8:00 AM PST). Below are the conference access code and
phone numbers:
Participant Access code: 3448726
Toll-free: 1-877-385-4099 (Canada & USA)
Vancouver direct: +1-604-899-2339
Toronto direct: +1-416-883-0133
Resources & Reserves
Gold-Ore: Bjorkdal Reserves & Resources
----------------------------------------------------------------------------
Category Tonnes (000's) Grade (g/t Au) Gold (oz)
----------------------------------------------------------------------------
Reserves
----------------------------------------------------------------------------
P&P (O/P) 3,568 1.13 129,945
----------------------------------------------------------------------------
P&P (U/G) 457 2.46 36,128
----------------------------------------------------------------------------
Total Reserves(i) 4,025 1.28 166,073
----------------------------------------------------------------------------
Resources
----------------------------------------------------------------------------
M&I (O/P) 10,281 1.19 393,400
----------------------------------------------------------------------------
M&I (U/G) 6,191 2.65 527,500
----------------------------------------------------------------------------
Total M&I 16,472 1.74 920,900
----------------------------------------------------------------------------
Inferred (O/P) 10,435 1.07 359,000
----------------------------------------------------------------------------
Inferred (U/G) 2,736 2.91 256,000
----------------------------------------------------------------------------
Total Inferred 13,171 1.45 615,000
----------------------------------------------------------------------------
(i) Does not account for 2011 Production
- Reserves from "Technical Report on Bjorkdal Gold Mine, Sweden" by Wardell
Armstrong International, March 26, 2010
- Resources from "Bjorkdal Resource Estimate" by Wardell Armstrong
International, January 21, 2011
- Mineral resources listed at cut-off grade of 0.3 g/t Au for open pit and 1
g/t Au for underground
- Mineral reserves listed at cut-off grade of 0.45 g/t Au for open pit and
1/1.3 g/t Au for underground
- Mineral resources that are not mineral reserves do not have demonstrated
economic viability
Astur Gold: Salave Resources
----------------------------------------------------------------------------
Category Tonnes (000's) Grade (g/t) Gold (Oz)
----------------------------------------------------------------------------
Measured 2,155 3.88 268,000
----------------------------------------------------------------------------
Indicated 15,790 2.79 1,415,000
----------------------------------------------------------------------------
M&I 17,945 2.92 1,683,000
----------------------------------------------------------------------------
Inferred 2,600 1.94 160,000
----------------------------------------------------------------------------
Inferred (UG) 1,170 4.7 178,000
----------------------------------------------------------------------------
Total Inferred 3,770 2.8 338,000
----------------------------------------------------------------------------
Source: "Technical Report on Salave Gold Deposit, Spain" by Scott Wilson
RPA, February 25, 2010
- Mineral resources listed at cut-off grade of 0.7 g/t Au for open pit and
2.5 g/t Au for underground
- Mineral resources that are not mineral reserves do not have demonstrated
economic viability
Robert Wasylyshyn, P. Geo., President and COO of Gold-Ore, is the qualified
person for Bjorkdal as defined in NI 43-101 and has reviewed the contents of
this news release.
Brian McEwen, P. Geo., consultant to Astur Gold, is the qualified person for
Salave as defined in NI 43-101 and has reviewed the contents of this news
release.
ABOUT GOLD-ORE
Gold-Ore Resources is a gold producing company focused in the low political risk
jurisdiction of Sweden. The Company's primary asset is the Bjorkdal Gold Mine,
which has produced 1,050,000 ounces in the last 24 years. Drilling is expanding
the resources indicating a long mine life at current gold prices. The Company
has a strong balance sheet, generates significant cash flow from gold sales, and
remains un-hedged.
ABOUT ASTUR GOLD
Astur Gold is developing its 100% owned Salave Gold Project in Asturias,
northern Spain comprising 3198 hectares. Salave is one of the largest
undeveloped gold deposits in Western Europe. The Company submitted an
application for an underground mine permit to the government of Asturias in
September 2011. Astur Gold is currently conducting geotechnical drilling for
underground mine planning and an Environmental Impact Study. The Company is
building a partnership with the people of Asturias to generate significant
economic benefit for the region and bring Salave into production as soon as
possible.
Mineral resources that are not mineral reserves do not have demonstrated
economic viability. This document contains certain forward looking statements
which involve known and unknown risks, delays and uncertainties not under the
Company's control which may cause actual results, performance or achievements of
the Company to be materially different from the results, performance or
expectation implied by these forward looking statements.
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