Kinross Gold Corporation Announces Proposed Acquisition of Underworld Resources Inc.
11 Marzo 2010 - 9:08AM
Marketwired
Underworld Resources Inc. (TSX VENTURE: UW) and Kinross Gold
Corporation (TSX: K)(NYSE: KGC) announced today that their
respective Boards of Directors have approved a business combination
by way of a friendly offer (the "Offer") by Kinross to acquire 100%
of the outstanding common shares of Underworld (the "Common
Shares") not already owned by Kinross. Subject to the execution of
definitive agreements, the board of directors of Underworld
unanimously recommends the offer to its shareholders and the
directors and management team have agreed to tender their shares to
the offer. Pursuant to the terms of the letter agreement,
Underworld has agreed to work exclusively with Kinross toward the
conclusion of a definitive support agreement which is anticipated
to be executed and delivered by the parties by March 15, 2010.
Elements of the transaction include
- For each Common Share of Underworld, Kinross will offer 0.141
of a Kinross common share, plus $0.01 in cash. The Offer represents
an implied offer price of approximately $2.62 per Common Share,
based on the March 10, 2010 closing price of $18.54 per Kinross
common share on the Toronto Stock Exchange (the "TSX"). The
transaction values the fully-diluted share capital of Underworld at
approximately $139.2 million.
- The Offer represents an attractive and immediate premium of
36.0% over the closing price of the Common Shares on the TSX
Venture Exchange ("TSX-V") on March 10, 2010, the last day of
trading prior to announcement of the Offer, and a premium of
approximately 50.2% based on the volume-weighted average prices of
the Common Shares and Kinross' common shares, for the 20 trading
days ended March 10, 2010.
- The Board of Directors of Underworld, after receiving the
recommendation of a special committee of independent directors
created by Underworld to oversee the transaction process, has
unanimously determined that the Offer is in the best interests of
Underworld and Underworld's shareholders, and unanimously
recommends that Underworld shareholders tender their Common Shares
to the Offer. The directors and senior officers of Underworld will
enter into customary lock-up agreements with Kinross to tender all
of their Common Shares to the Offer.
- Underworld's key asset is the White Gold project, located in
the Tintina gold belt, approximately 95 km south of Dawson City,
Yukon Territory, Canada.
Underworld Chairman Michael Williams commented, "The Kinross
Offer brings substantial technical and financial resources to the
White Gold property which will further rapidly advance the project.
We feel the Kinross offer provides immediate value to our
shareholders."
Underworld's financial advisor Canaccord Financial Ltd. has
provided an oral opinion to the Underworld Board of Directors that
the consideration offered is fair, from a financial point of view,
to Underworld's shareholders.
Full details of the offer will be included in the formal offer
and take-over bid circular (the "Circular") to be mailed to
Underworld shareholders shortly. The Offer will be open for
acceptance for at least 35 days following the commencement of the
Offer. The Offer is subject to several conditions, including
acceptance of the Offer by the holders of at least two-thirds of
the outstanding Common Shares (calculated on a fully-diluted basis)
and the receipt of all necessary regulatory approvals. If Kinross
acquires at least two-thirds of the outstanding Common Shares,
Kinross intends to take steps to acquire all outstanding Common
Shares not acquired pursuant to the Offer. If 100% of the Common
Shares are tendered, Kinross will issue approximately 6.8 million
common shares pursuant to the transaction (based on the
fully-diluted share capital of Underworld), representing
approximately 1.0% of Kinross' current outstanding common
shares.
Underworld's legal counsel is DuMoulin Black LLP. Kinross'
financial advisor is RBC Capital Markets, its strategic advisor is
BMO Capital Markets, and its legal counsel is Osler, Hoskin &
Harcourt LLP.
Underworld Resources is a well-structured junior exploration
company that has defined a substantial new gold discovery in the
Yukon.
ON BEHALF OF THE BOARD OF DIRECTORS
Adrian Fleming, President
Forward Looking Statement
Some of the statements contained in this press release are
forward-looking statements. Forward-looking statements are not
historical facts and are subject to a number of risks and
uncertainties beyond the Company's control, including, but not
exclusively, statements regarding potential mineralization,
exploration results, completion of work program and studies, and
future plans and objectives of the Company. Resource exploration,
development and operations are highly speculative, characterized by
a number of significant risks, which even a combination of careful
evaluation, experience and knowledge may not eliminate, including,
among other things, unprofitable efforts resulting not only from
the failure to discover mineral resources but from finding mineral
deposits which, though present, are insufficient in quantity and
quality to return a profit from production.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
Contacts: Underworld Resources Inc. Jeff Sundar Investor
Relations 604-684-4001 604-484-7155 (FAX)
info@underworldresources.com www.underworldresources.com
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