VANCOUVER, BRITISH COLUMBIA (AMEX: MDW) and Golden Predator
Mines Inc. (TSX: GP) and Fury Explorations Ltd. (TSX VENTURE: FUR)
-
Golden Predator Mines Inc. ("Golden Predator") and Midway Gold
Corp. ("Midway") are pleased to announce that the two companies
have entered into a term sheet describing the principal terms of a
business combination between the two companies. The business
combination, if completed, would enhance Golden Predator's
portfolio of high quality Nevada gold properties, which following
the transaction would include the addition of Midway's Spring
Valley property, in Pershing County, Nevada, the Pan deposit near
Eureka, Nevada, and the epithermal bonanza Midway deposit near
Tonopah, Nevada.
Pursuant to the proposed transaction, Golden Predator
shareholders would receive one common share of Midway for each
common share of Golden Predator held by them. Outstanding options,
warrants and convertible securities of Golden Predator would,
subject to the final transaction terms, be converted into or
exchanged for corresponding securities of Midway. Upon closing,
Midway will change its name to Golden Predator Mines Inc.
The term sheet contemplates, subject to regulatory approval and
requirements, a dividend being declared and paid to the Midway
shareholders immediately prior to closing of the business
combination. The dividend would consist of one transferable warrant
(the "Dividend Warrant") for each outstanding share of Midway on
the record date of the dividend. Each Dividend Warrant would
entitle the holder thereof on exercise to acquire an additional
share of Midway at a price of $2.05 for a period of 18 months from
issuance. Midway will apply to list the Dividend Warrants on a
recognized Canadian stock exchange and will consider listing the
Dividend Warrants on a U.S. stock exchange.
The business combination with Midway is consistent with Golden
Predator's strategy of forming a well financed, mid-tier mining
company with a prominent position in the Nevada precious and
strategic metals exploration and development arena. The resulting
combined company is anticipated to be in a stronger position to
aggressively leverage its strategic assets which include the
existing production facilities, high-quality mineral properties, a
strong balance sheet, experienced and talented production and
management personnel, and royalty trust revenues. The resulting
company following the proposed business combination of Golden
Predator, Midway and Fury Explorations Ltd., will have the
following key assets:
- The Springer Tungsten mine and mill complex, North-western
Nevada
- Fury's Taylor project mine and mill complex, Eastern
Nevada
- Midway's Pan, Spring Valley and Midway projects, which have
National Instrument 43-101 compliant resources
- Advanced tungsten projects in Nevada and Montana
- Focused epithermal bonanza gold exploration projects in
Nevada, Oregon and California
- Income producing gold royalty portfolio covering over 70,000
acres of mining claims in Nevada
- Molybdenum and Vanadium properties to be monetized
- Exclusive license to Union Carbide worldwide Tungsten data
library
- Ownership of Atlas Precious Metals database
- Technical and operational staff with expertise in exploration,
development, mine permitting, finance, production, and
reclamation
- Strong balance sheet with over $23 million dollars on a
consolidated basis as at the current date.
In addition, on a pro-forma basis based on the current
capitalization of each of Golden Predator, Midway and Fury, the
resulting company will have 111,741,979 shares issued and
outstanding. The combined entities on a pro-forma fully diluted
basis would have a total of 209,935,382 shares issued and
outstanding assuming the exercise of all warrants outstanding on
completion of the business combinations and the exercise of current
stock options. If all of these options and warrants are exercised,
the proceeds to the resulting company would be approximately
$224,997,916. There is however no guarantee that all of the
warrants or options will be exercised, or that the resulting
company will receive the foregoing proceeds. In addition, these
numbers are subject to change due to any further transactions that
the above parties may complete prior to closing of the business
combination, and due to changes to the number of outstanding
options.
Note that the previously announced acquisition of Fury
Explorations Ltd. by Golden Predator is subject to various
conditions to closing, including shareholder approval of the Fury
shareholders, court approval and regulatory approval, and
accordingly there is no guarantee that the acquisition will
complete. Please see Golden Predator's press releases dated May 30,
2008 and July 11 2008 regarding the transaction with Fury.
Commenting on the proposed acquisition, William Sheriff, Golden
Predator's President and CEO stated: "The business combination with
Midway will result in a talent pool and property portfolio that
places Golden Predator in an elite category of precious and
strategic metals exploration and development companies. With
ongoing and focused strategic activities including the pending
acquisition of Fury Explorations Ltd., and refurbishment of our
Springer mill scheduled for completion later this year, Golden
Predator is taking the steps needed to move into the development
phase. On a combined basis with Midway and Fury, we will add
significant National Instrument 43-101, compliant gold and silver
ounces to the company's credit. The Springer and Taylor mill
refurbishments and enhancement of the Midway epithermal bonanza
project, will position us to proceed quickly to the pre-feasibility
and feasibility stages, followed by development decisions. At
current gold prices, the timing could not be better for Golden
Predator and Midway Gold to combine their businesses."
Alan Branham, President and CEO of Midway comments: "This
business combination allows a unique opportunity to combine our
exploration team and our proven track record of discoveries, with
Golden Predator's development and management team to create
aggressive growth for all our shareholders. The two mills
complement the development work at Midway and allows flexibility in
this and other future development work. The funding from the
combination of the companies as well as potential cash flow from
Springer could allow us to grow organically into a significant
producer in Nevada. We see that this business combination will
accelerate and expand our golden pipeline of potential mines. It
will allow us more opportunities for new discoveries as well as
develop and expand our existing properties in Nevada."
Summary of the Transaction
The term sheet entered into between Golden Predator and Midway
contemplates that the business combination would be completed by
way of a statutory plan of arrangement under the Business
Corporations Act (British Columbia). The final structure of the
business combination, however, will be based upon a review of the
tax and securities implications of the transaction. Upon completion
of the transaction shareholders of Golden Predator will hold
approximately 53% of the issued and outstanding shares of the
resulting company, prior to the exercise of outstanding warrants
and options.
Golden Predator will have the right to appoint four members to
the board of directors of the resulting company, and Midway will
have the right to retain three directors of which one will be
William M. Sheriff, a current director of both Midway and Golden
Predator. In addition, the employees of both Midway and Golden
Predator will be offered continuing positions with the resulting
company, subject to review. William M. Sheriff will be the CEO and
Chairman of the Board, Steve Vanry is expected to become the
company's President following a successful completion of the
previously announced business combination with Fury Explorations
Ltd. Alan Branham will serve as the President of the company's
Midway Gold US subsidiary as well as a Vice President of Golden
Predator Mines (US).Christine Thomson will continue as the
company's Corporate Secretary and Larry Yau will be the company's
CFO.
In connection with the transaction, Midway anticipates that it
will apply to list its common shares and the Dividend Warrants on
the Toronto Stock Exchange.
Pursuant the term sheet, Golden Predator has agreed to provide a
loan facility of $5 million to Midway, which Midway may draw upon
in installments of $1 million. The loan proceeds will be applied by
Midway towards the development of its Pan and Midway projects and
other permitted uses. The loan will be for a term of 12 months and
will bear interest at prime plus 2%.
The term sheet contemplates that the parties will agree to a
break-fee of $2.5 million, payable by either party in specified
circumstances. In addition, the directors and officers of each of
Golden Predator and Midway will be asked to enter into agreements
to vote their shares in favour of the transaction at any meeting of
shareholders of either party held for that purpose.
Completion of the transaction will be subject to the parties
entering into a definitive agreement, completion of due diligence
investigations, securities law compliance and obtaining all
necessary court, regulatory, stock exchange, board and shareholder
approvals.
Spin-off of Golden Eagle Property
On May 28, 2008 Midway entered into a letter of intent to
acquire a 75% interest in the Golden Eagle property from Kinross
Gold USA Inc. subject to a pre-emptive right in favour of Hecla
Limited, which holds the remaining 25% interest. Since then Hecla
has declined on their pre-emptive right and the transactions,
including the related private placement to fund the acquisition,
are expected to close on August 7, 2008 as previously disclosed in
a press release dated May 30, 2008.
Midway subsequently entered into a letter of intent to acquire
Hecla's 25% interest in the property for a cash payment of
US$483,333. Kinross has now waived their pre-emptive right to the
25% interest and the transaction is expected to close concurrent
with the Kinross purchase.
Midway anticipates that it will complete the acquisition of the
Golden Eagle property through a wholly-owned subsidiary created to
hold the property.
Golden Predator and Midway have contemplated in the term sheet
that, prior to completion of the business combination, 80.1% of the
shares of the wholly owned subsidiary company will be spun-off to
current Midway shareholders. The resulting combined company will
hold the balance of 19.9% of the shares of the new company.
The spin-off is subject to approval of the final terms by the
board of directors of each of Golden Predator and Midway, as well
as regulatory, stock exchange, shareholder and court approvals and
compliance with applicable securities laws. In addition, the
consent of Kinross and Hecla may be required.
Information on Midway Gold Corp.
Midway Gold Corp. is a precious metals exploration company,
listed on the American Stock Exchange and on the TSX Venture
Exchange under the symbol "MDW". Midway's focus is creating value
for shareholders through the discovery and development of quality
new precious metal resources in politically stable mining areas.
Midway currently controls seven gold-silver properties with over 60
square miles of mineral holdings along three major gold trends in
Nevada. Four of the properties contain NI 43-101 compliant gold
resources.
The largest gold resource is the Spring Valley project in
Pershing County Nevada, a new discovery with a inferred resource of
992,152 ounces of gold in a 50.6 Mton deposit averaging 0.019 ounce
per ton(opt), calculated within a $650 cone at a 0.006 opt gold
cut-off. The resource was reported in a NI 43-101 technical report
by Wakefield and Kuhl of AMEC, Sparks, Nevada dated March 7, 2008.
Approximately 80 holes have been completed since the resource
update and received assays have been reported in recent press
releases. Midway is currently drilling at Spring Valley to attempt
to expand the known deposit.
In central Nevada, Midway controls 100% of the Pan project. In
January 15, 2005 a NI 43-101 technical report by Gustin of Mine
Development Associates, of Sparks, Nevada report a Measured and
Indicated Resource at the Pan project of 18.9 M tons averaging
0.019 opt gold for 360,259 ounces and an Inferred Resource of 8.3
Mtons of 0.017 opt gold for 141,143 ounces. Drilling during the
last year at Pan, a Carlin style system on the Battle
Mountain-Eureka gold trend, has noted four new zones of gold
outside the resource areas. Midway is conducting exploration
drilling on the property. The deposits start at the surface and are
oxide.
The Midway project, has a reported resource from a March 1, 2005
NI 43-101 technical report by Ristorcelli and Gustin hosts an
Inferred Resource of 5.26 Mtons averaging 0.039 opt gold for
215,514 ounces. Midway has discovered and delineated new deposits
since the 2005 report with over 200 holes drilled. A plan to drive
an underground decline and collect a 50,000 ton bulk sample of five
high-grade veins is currently being permitted and developed. An
additional 58 veins could be developed once the underground
workings are completed. The Midway project is in south central
Nevada along the prolific Round Mountain-Goldfield gold trend.
The Afgan and Gold Rock properties, located along the same trend
as Pan, contain small historic gold deposits and strong exploration
potential on over 5 and 13 square mile areas respectively. Just six
miles southeast of Midway lies the Thunder Mountain project, an
early stage gold and silver property under earn-in by Kinross Gold
Corporation. The Burnt Canyon project is an early stage gold
property hosted in rhyolitic volcanic rocks located north of the
Spring Valley project in Pershing County.
Information on Golden Predators Mines Inc.
Golden Predator Mines Inc. is a TSX listed company whose
principal assets include the Springer Tungsten Mine and Mill
Complex located in northwest Nevada, the Lyle Campbell Royalty
Trust consisting of 23 properties and over 70,000 acres of mineral
rights in Nevada, and several important epithermal bonanza gold and
silver projects located in Nevada and adjacent states.
Springer hosts a historical resource estimate of 3.35 million
tons grading 0.458% WO3 and a modern 1,200 ton per day mill. The
historical resource was completed by General Electric in 1980, but
is non-compliant within the definitions and standards outlined in
NI 43-101, has not been verified by any of Golden Predator's
Qualified Persons, and is provided for information purposes only
and as such should not be relied upon. Golden Predator is not
treating the historical estimate as current mineral resources or
mineral reserves as defined in NI 43-101. Golden Predator has
submitted its operational permits to restart the facility and
anticipates commissioning of the mill by year end. The Springer
facility was acquired through Energy Metals Corporation, a wholly
owned subsidiary of Uranium One, by way of purchase from General
Electric Corporation. General Electric invested US$71 million in
the construction and commissioning of the facility.
Golden Predator also controls the Fostung project in Ontario.
Fostung contains an NI 43-101 compliant Inferred Resource, using a
0.125% WO3 cutoff grade, of 12.4 M tonnes at a grade of 0.213% WO3
for 58 million pounds of contained WO3 (resource based on a
November 30, 2007 NI 43-101 technical report prepared by Stryhas
and More of by SRK Consulting engineers and Geoscientists). A
preliminary mining study by Union Carbide in 1981 considered an
open pit scenario (300' depth @ 6,500 tpd) with an average waste to
ore strip ratio of 2.16:1. Golden Predator will initiate diamond
drilling on the property this year to expand the resource to depth
and test for the potential for higher grade areas of mineralization
along favorable structures as well as to define and quantify the
significant molybdenum mineralization that accompanies the
tungsten.
In addition to Golden Predator's significant tungsten holdings,
it also has interests in a number of gold properties in Nevada and
adjacent states including the Adelaide project, Lewis project (40%
interest through JV with Madison Minerals MMR-TSXV), Lantern
project, Quartz Mountain project in Oregon, and the High Grade
project in northeastern most California. Golden Predator has
submitted permits for the construction of a centralized CIL-gravity
gold mill to be located at the Springer complex to process high
grade gold ores from the region lying within 300 miles of Springer.
It is Golden Predator's business model to feed the mill with ore
developed from its own properties in the area.
Golden Predator intends to focus on its gold and tungsten assets
that might be advanced to early production decisions and will
pursue monetization of its non-core precious metal exploration
projects along with its vanadium and molybdenum assets through
divestiture with a retained royalty and equity interest.
The Lyle Campbell Royalty Trust includes claims and royalty
positions covering the Pan Property, leased by Midway Gold Corp.
(Measured and Indicated 18.96mm tons grading 0.019 opt containing
361,400 ounces of gold plus an additional Inferred Resource of
8.3mm tons grading 0.017 opt containing 140,600 ounces of gold as
announced by Midway Gold Corp. in a news release dated April 19,
2007) (resource figures are based on a September 1, 2007 NI 43-101
compliant technical report prepared for Gold Standard Royalty Corp.
and posted at www.sedar.com), both royalty and leases covering
significant portions of the Bald Mountain property of Barrick Gold
and the Tonkin Springs property leased to US Gold. In total, there
are 23 property interests, in the portfolio comprising over 70,000
acres.
Golden Predator previously announced the acquisition of Fury
Explorations Inc., which is pending shareholder approval at a
shareholder meeting of Fury scheduled to be held on August 8, 2008,
and court approval. Fury Explorations is a metals exploration and
development company focused on achieving near-term silver
production at its Taylor project located in eastern Nevada. Taylor
hosts a modern mill and associated infrastructure in addition to a
NI 43-101 compliant open-pit resource of silver (please see Fury's
press release dated September 4, 2007 for more information
regarding the Taylor silver resource). Pursuant to the terms of the
Term Sheet, Midway will also apply to list the tradeable Golden
Predator warrants to be issued to the shareholders of Fury on
closing of the acquisition on a recognized Canadian Stock
Exchange.
Additional Information
Information concerning Golden Predator and Midway may be viewed
on the internet at their respective websites noted below, or at the
Canadian securities regulators' website at www.sedar.com. In
addition, information concerning Midway may also be viewed at the
U.S. Securities and Exchange Commission's website at
www.sec.gov.
Cautionary Statements Regarding the Business Combination:
Completion of the transaction is subject to a number of conditions,
including regulatory approval, director approvals, shareholder
approvals, completion of satisfactory due diligence, a definitive
agreement and approval of the British Columbia Supreme Court. There
can be no assurance that the transaction will be completed as
proposed or at all. Investors are cautioned that, except as
disclosed in the Management Information Circular to be prepared by
either or both parties in connection with the transaction, any
information released or received with respect to the business
combination may not be accurate or complete and should not be
relied upon. Trading in the securities of exploration and
development stage resource companies should be considered highly
speculative.
Forward-Looking Statements: Statements in this release that are
forward-looking statements are subject to various risks and
uncertainties concerning the specific factors disclosed under the
heading "Risk Factors" and elsewhere in the corporations' periodic
filings with Canadian Securities Regulators. Such information
contained herein represents management's best judgment as of the
date hereof based on information currently available. Statements in
this press release other than purely historical information,
including statements relating to the companies' future plans and
objectives or expected results, constitute forward-looking
statements. Forward looking statements are based on numerous
assumptions and are subject to all of the risks and uncertainties
inherent in the companies' business, including risks inherent in
mineral exploration and development. The companies do not assume
the obligation to update any forward-looking statement. In
particular, no representation is made in this release as to the
timing of the business combination or spin-off, whether the
business combination or spin-off will complete on the terms
described herein or at all, the success or value of the combined
companies after the business combination. In addition, there are
numerous risks and other factors that will influence a development
decision, including concluding resource evaluations on our
properties, mine design limitations, permitting risks and economic
factors, all of which may be beyond our control.
Qualified Persons: Dr. Art Ettlinger, PhD, P.Geo, a qualified
person as defined by National Instrument 43-101, has reviewed this
news release for Golden Predator and is responsible for its content
as it relates to Golden Predator. This release has been reviewed
and approved for Midway Gold Corp and is responsible for its
content relating to Midway Gold Corp by Alan Branham, (M.Sc. and
CPG), a "qualified person" as that term is defined in National
Instrument 43-101.
U.S. Cautionary Statements: We advise US investors that while
the terms "measured resources", "indicated resources" and "inferred
resources" are recognized and required by Canadian regulations, the
US Securities and Exchange Commission does not recognize these
terms. US investors are cautioned not to assume that any part or
all of the material in these categories will ever be converted into
reserves.
This communication is being made in respect of the proposed
acquisition transaction involving and Golden Predator and Midway
Gold. In connection with the proposed transaction, it is
anticipated that Midway may file with the U.S. Securities and
Exchange Commission ("SEC") a registration statement on Form S-4
and each of Midway Gold and Golden Predator will mail a proxy
statement/prospectus to its stockholders, and each will be filing
other documents regarding the proposed transaction with the SEC as
well. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS
ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS REGARDING THE
PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. The final proxy
statement/prospectus will be mailed to Midway Gold's and Golden
Predator's stockholders. Stockholders will be able to obtain a free
copy of the proxy statement/prospectus, as well as other filings
containing information about Midway Gold and Golden Predator,
without charge, at the SEC's Internet site (http://www.sec.gov) and
in Canada at www.sedar.com. Copies of the proxy
statement/prospectus and the filings with the SEC or Canadian
regulators that may be incorporated by reference in the proxy
statement/prospectus can also be obtained, without charge, by
directing a request to Midway Gold at Unit 1 - 15782 Marine Drive,
White Rock, British Columbia, Canada, V4B 1E6, Attention: Chief
Financial Officer, or to Golden Predator at Suite 1470, 701 West
Georgia Street, Vancouver, British Columbia, V7Y 1C6, Attention:
Chief Executive Officer.
Golden Predator and Midway Gold and their respective directors
and executive officers and other persons may be deemed to be
participants in the solicitation of proxies in respect of the
proposed transaction. Information regarding Midway Gold's directors
and executive officers is available in Midway's proxy statement
filed on Schedule 14A for its 2008 annual meeting of stockholders
and its 2007 Annual Report on Form 10-K, each of which have been
filed with the SEC. Information regarding Golden Predator's
directors and executive officers is available in Golden Predator's
Management Information Circular for its 2008 annual meeting and its
2007 Annual Information Form, each of which have been filed on in
Canada SEDAR and is available at www.sedar.com. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials to be filed with
the SEC when they become available.
The American Stock Exchange, Toronto Stock Exchange and the TSX
Venture Exchange have in no way passed upon the merits of the
proposed transaction and have neither approved nor disapproved the
contents of this press release.
Contacts: Golden Predator Mines, Inc. William M. Sheriff
President & CEO (604) 648-4653 Email: info@goldenpredator.com
Website: www.goldenpredator.com Midway Gold Corp. Alan Branham
President & CEO (406) 475-9595 Email: infodata@midwaygold.com
Website: www.midwaygold.com
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