North American Palladium Ltd. ("NAP") (TSX: PDL)(NYSE Alternext US:
PAL)(NYSE Amex: PAL.A) and Cadiscor Resources Inc. ("Cadiscor")
(TSX VENTURE: CAO) today announced that they have entered into a
definitive agreement pursuant to which NAP will acquire by way of a
plan of arrangement all of the outstanding common shares of
Cadiscor in an all-share transaction, whereby Cadiscor shareholders
will receive 0.33 common shares of NAP for each common share of
Cadiscor (the "Exchange Ratio").
Based on the closing price of NAP's common shares on the TSX of
$1.78 on March 31, 2009, the Exchange Ratio implies a value for
each Cadiscor share of $0.59 and represents a premium of 47% to the
closing price of Cadiscor's shares on March 31, 2009, and a premium
of 75% to the 20-day volume weighted average trading price of
Cadiscor's shares for the period ended March 31, 2009.
"The acquisition of Cadiscor is an important step in growing our
precious metals business by adding additional gold to our
significant palladium resources. Our acquisition focus will
continue to be gold with the objective of growing NAP to be a
mid-tier precious metal producer operating in mining friendly
jurisdictions," said William Biggar, President and Chief Executive
Officer of NAP. "As experienced miners, NAP's expertise will assist
Cadiscor to fast-track the resumption of gold production at its
Sleeping Giant mine in the Abitibi region, and evaluate and advance
its Discovery Project and other prospective gold exploration
properties in Quebec. The combination with Cadiscor increases the
attractiveness of NAP for investors seeking exposure to multiple
precious metals while minimizing currency and political risks."
Michel Bouchard, President and Chief Executive Officer of
Cadiscor, stated: "This transaction gives Cadiscor shareholders an
attractive premium for their shares, and significant upside to
future increases in the price of palladium and gold. NAP brings not
only a strong balance sheet with the capital to quickly restart the
Sleeping Giant mine in 2009, but also mining personnel with
significant experience in developing and operating underground
mines, a large resource of over 3.7 million ounces of palladium at
its mine in Thunder Bay, and a highly liquid stock which will be a
benefit to Cadiscor shareholders."
Transaction Details
Under the terms of the transaction, shareholders of Cadiscor
will receive 0.33 common shares of NAP for each common share of
Cadiscor held. This will result in NAP issuing approximately 14.3
million shares to Cadiscor shareholders, who will own approximately
14% of NAP on completion of the transaction.
The transaction has been structured as a plan of arrangement
under the Canada Business Corporations Act, and is subject to
approval by the shareholders of Cadiscor and by applicable stock
exchanges. The required shareholder approval will be two-thirds of
the votes cast by Cadiscor shareholders at a special meeting to
consider the transaction. The transaction has been structured to
allow Cadiscor shareholders to receive shares of NAP on a
tax-deferred basis for Canadian income tax purposes. Cadiscor
expects to complete and mail to its shareholders an information
circular in late April and to hold the special meeting in May
2009.
Holders of options, warrants and convertible debentures of
Cadiscor will continue to be entitled to exercise their securities
for NAP shares in lieu of Cadiscor shares, based on the Exchange
Ratio.
The definitive agreement includes a commitment by Cadiscor not
to solicit alternative transactions. In certain circumstances, if
Cadiscor terminates the definitive agreement to enter into another
transaction, then Cadiscor is obligated to pay to NAP a termination
payment of $1 million. NAP also has the right to match competing
offers that may be made to Cadiscor.
Cadiscor's board will have the right to nominate a director to
join the board of NAP following the closing of the transaction.
Coincident with the signing of the definitive agreement, NAP has
advanced to Cadiscor a total of $7.5 million, pursuant to the
purchase of a $5.4 million, 12% convertible debenture, and a $2.1
million, 12% debenture, the proceeds of which will be used by
Cadiscor to bring the Sleeping Giant mine back into production.
Both debentures have a term of 18 months, and are secured by a
first charge on Cadiscor's assets. The convertible debenture is
convertible into Cadiscor common shares at $0.50 per share, which,
on full conversion, would constitute a 19.9% shareholding in
Cadiscor.
The Board of Directors of Cadiscor is unanimously recommending
approval of the transaction by their shareholders. Cadiscor
directors intend to vote their shares in favour of the
transaction.
NAP's financial advisor is Haywood Securities Inc. and its legal
counsel is Stikeman Elliott LLP. Cadiscor's financial advisor is
Macquarie Capital Markets Canada Ltd. and its legal counsel is
Miller Thomson LLP.
About Cadiscor Resources
Cadiscor Resources is a gold exploration company with properties
in the Province of Quebec. Cadiscor's main asset is the Sleeping
Giant underground mine and milling facilities, situated about 80
kilometres north of Amos, Quebec. A feasibility study released in
October 2008 identified sufficient mineral reserves to operate for
16 months at a rate of 52,000 ounces of gold per year, and mineral
resources that could potentially double the mine life. The
company's other significant asset is the Discovery Gold Project,
located 70 kilometres from Sleeping Giant. A scoping study released
in August 2008 demonstrated that the project could produce an
average of 44,000 ounces of gold over a 4-year mine life.
About North American Palladium
North American Palladium is a precious metals company that owns
one of North America's largest palladium mines, historically
producing approximately 4% of global palladium supply. The
Company's palladium production at its Lac des Iles mine is
strengthened by a significant contribution from platinum, gold,
nickel and copper by-product metals.
The Lac des Iles mine was placed on temporary care and
maintenance in October 2008 due to low metal prices. Prior to the
temporary shutdown, the mine had annual production of 270,000
ounces of palladium, 20,000 ounces of platinum and 20,000 ounces of
gold. The mine, which can be quickly restarted upon a strengthening
of metal prices, hosts in situ measured and indicated mineral
resources of 3.7 million ounces of palladium, 300,000 ounces of
platinum and 250,000 ounces of gold, giving investors significant
leverage to an increase in commodity prices. The Company benefits
from operating in a politically stable jurisdiction with developed
infrastructure and a history of innovation and excellence in
mining. Please visit www.napalladium.com for more information.
Cautionary Statement on Forward-Looking Information
Certain information included in this press release, including
any information as to our future financial or operating performance
and other statements that express management's expectations or
estimates of future performance, constitute 'forward-looking
statements' within the meaning of the 'safe harbor' provisions of
the United States Private Securities Litigation Reform Act of 1995
and Canadian securities laws. The words 'expect', 'believe',
'will', 'intend', 'estimate' and similar expressions identify
forward-looking statements. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by management, are inherently subject
to significant business, economic and competitive uncertainties,
risks and contingencies. The Company cautions the reader that such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual financial
results, performance or achievements of North American Palladium to
be materially different from the Company's estimated future
results, performance or achievements expressed or implied by those
forward-looking statements and that the forward-looking statements
are not guarantees of future performance. These statements are also
based on certain factors and assumptions. For more details on these
estimates, risks, assumptions and factors, see the Company's most
recent Form 40-F/Annual Information Form on file with the U.S.
Securities and Exchange Commission and Canadian provincial
securities regulatory authorities. In addition, there can be no
assurance that the Company's acquisition of Cadiscor will be
completed or, if completed, that it will be successful, and there
can be no assurance that the Sleeping Giant mine will be
successfully restarted or that Cadiscor's other properties can be
successfully developed. The Company disclaims any obligation to
update or revise any forward-looking statements, whether as a
result of new information, events or otherwise, except as expressly
required by law. Readers are cautioned not to put undue reliance on
these forward-looking statements.
Contacts: North American Palladium Ltd. Bill Biggar President
& Chief Executive Officer (416) 360-5666
bbiggar@napalladium.com North American Palladium Ltd. Trent Mell
Vice President, Corporate Development (416) 360-7971 Ext. 225
tmell@napalladium.com www.napalladium.com Cadiscor Resources Inc.
Michel Bouchard President (450) 449-0066 mbouchard@cadiscor.com
Cadiscor Resources Inc. Linda Plante Investor Relations (450)
449-0066 lplante@cadiscor.com
Cadiscor Resources Com Npv (TSXV:CAO)
Historical Stock Chart
From Jun 2024 to Jul 2024
Cadiscor Resources Com Npv (TSXV:CAO)
Historical Stock Chart
From Jul 2023 to Jul 2024