Augen Gold's Board Unanimously Recommends Shareholders Reject Trelawney's Unsolicited Offer
28 July 2011 - 1:34AM
Marketwired Canada
Augen Gold Corp. ("Augen Gold" or the "Company") (TSX VENTURE:GLD) today
announced that its Board of Directors unanimously recommends that shareholders
reject the unsolicited offer by Trelawney Mining and Exploration Inc.
("Trelawney") to acquire the common shares of Augen Gold. The Board determined
that the Trelawney offer fails to provide full value for Augen Gold shares and
is an attempt by Trelawney to acquire Augen Gold without offering adequate
consideration to Augen Gold shareholders. Accordingly, the Board recommends that
Augen Gold shareholders reject the Trelawney offer and not tender any of their
shares.
Tim Peterson, Chairman of Augen Gold's Board of Directors, stated, "After
careful review, the Board has concluded that the Trelawney offer does not
adequately reflect the value of Augen Gold's assets, our successful exploration
record and our very attractive land position in the South Swayze Greenstone
Belt. In addition, Trelawney's bid is subject to numerous conditions and does
not comply with Augen Gold's Shareholder Rights Plan."
J. David Mason, Augen Gold's Chief Executive Officer, said, "Augen Gold has a
strong exploration track record as evidenced by the recently announced National
Instrument 43-101 compliant Inferred resource at the Company's Jerome Mine
Project. Trelawney's offer fails to adequately compensate Augen Gold
shareholders for the value of the Company's land position, exploration work and
National Instrument 43-101 compliant Inferred resource on the Jerome Mine
Project."
A copy of the Directors' Circular, which sets forth in greater detail the
Board's recommendation and the reasons therefore, is being mailed to all Augen
Gold shareholders. These reasons include, but are not limited to, the following:
-- The Trelawney offer substantially undervalues Augen Gold.
-- The timing of the Trelawney offer is opportunistic.
-- The Trelawney offer fails to recognize the strategic value of the Jerome
Mine Project and Augen Gold's other properties in the Southern Swayze
Greenstone Belt to Trelawney.
-- The Trelawney offer is financially inadequate.
-- The Trelawney offer is not a cash offer and the consideration offered by
Trelawney is volatile and of uncertain value.
-- The Trelawney offer does not reflect an adequate premium for control of
Augen Gold.
-- The Board of Directors is aggressively pursuing value-maximizing
alternatives.
-- Trelawney has historically valued Augen Gold's Common Shares at a price
well above the Trelawney offer.
-- Trelawney can pay substantially more.
-- Rejection of the Trelawney offer by Augen Gold's directors and officers.
-- The Trelawney offer is highly conditional.
-- The Trelawney offer is not a Permitted Bid under the Shareholder Rights
Plan.
Paradigm Capital Inc. ("Paradigm"), the financial advisors to the Special
Committee of independent directors appointed by the Board of Directors (the
"Special Committee"), has provided a written opinion to the Special Committee
that, as of the date of such opinion, the consideration offered pursuant to the
Trelawney offer is inadequate, from a financial point of view, to Augen Gold
shareholders, other than Trelawney and its associates, affiliates and joint
actors. The full text of Paradigm's opinion, which Augen Gold shareholders are
urged to read in its entirety, is included in the Directors' Circular.
Legal counsel to the Special Committee is Fraser Milner Casgrain LLP.
If you have any questions or concerns, please contact Phoenix Advisory
Partners, Augen Gold's information agent, at:
North American Toll Free Phone: 1-866-521-4425
Email: inquiries@phoenixadvisorypartners.com
Toll Free Facsimile: 1-877-907-3176
Banks, Brokers and Collect Calls: 1-201-806-2222
About Augen Gold
Augen Gold is a gold exploration company with 23,685 hectares of staked and
patented mining claims in the Southern Swayze Greenstone Belt, including the
formerly producing Jerome Gold Mine. The claims cover a 45-kilometre long
section of the Ridout Deformation Zone, believed to be the western extension of
the Kirkland Lake/Larder Lake Break. The geological setting is comparable to the
major gold camps of Timmins and Kirkland Lake, and the claims contain numerous
gold showings that have received very little historical exploration. Augen Gold
is the first company to have assembled such a coherent ground position. Augen
Gold has performed a detailed airborne geophysical survey over the whole area.
The correlation of many gold showings with geophysical features indicates
excellent potential for the discovery of additional deposits. On July 18, 2011
Augen Gold announced an initial National Instrument 43-101 - Standards of
Disclosure for Mineral Projects ("NI 43-101") compliant Mineral Resource
estimate at Augen Gold's Jerome Mine Project outlining a 1.03 million ounce
Inferred gold resource (18.7 million tonnes grading 1.7 g/t) at a cutoff grade
of 0.3 g/t. The Company's objectives are to aggressively explore the gold
showings that correlate with geophysical anomalies, continue resource definition
at the Jerome Mine, and to expand its property portfolio with highly prospective
mineral assets.
For more information on the Southern Swayze Project, please refer to the
Company's NI 43-101 compliant technical report "Amended and Restated Technical
Report on the Augen Gold Corp. Claims, Porcupine Mining Division, District of
Sudbury, Ontario, Canada" (effective April 8, 2008, available on the Company's
profile at www.sedar.com, along with the Company's other continuous disclosure
documents).
The information contained in this news release has been approved by Augen Gold's
Project Geologist, Gordon McRoberts, P.Geo., who is a Qualified Person as
defined in NI 43-101.
For more information on Augen Gold, visit our website at www.augengold.ca.
Follow our blog at www.augengold.wordpress.com, and follow us on www.twitter.com
(#augengoldcorp).
This news release contains forward-looking statements. These statements are
based on information currently available to the Company and the Company provides
no assurance that actual results will meet management's expectations.
Forward-looking statements include estimates and statements that describe the
Company's future plans, objectives or goals, including words to the effect that
the Company or management expects a stated condition or result to occur.
Forward-looking statements may be identified by such terms as "believes",
"anticipates", "expects", "estimates", "may", "could", "would", "will", or
"plan". Since forward-looking statements are based on assumptions and address
future events and conditions, by their very nature they involve inherent risks
and uncertainties. Actual results relating to, among other things, results of
exploration, project development, reclamation and capital costs of the Company's
mineral properties, and the Company's financial condition and prospects, could
differ materially from those currently anticipated in such statements for many
reasons such as: changes in general economic conditions and conditions in the
financial markets; changes in demand and prices for minerals; litigation,
legislative, environmental and other judicial, regulatory, political and
competitive developments; technological and operational difficulties encountered
in connection with the activities of the Company; and other matters discussed in
this news release. This list is not exhaustive of the factors that may affect
any of the Company's forward-looking statements. These and other factors should
be considered carefully and readers should not place undue reliance on the
Company's forward-looking statements. The Company does not undertake to update
any forward-looking statement that may be made from time to time by the Company
or on its behalf, except in accordance with applicable securities laws.
Shares outstanding: 127,711,347
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