GM Geo Minerals Ltd

GEO MINERALS LTD. ("GEO" or the "Company") (TSX VENTURE:GM)(FRANKFURT:8G3)
announced today that it has entered into a definitive business combination
agreement with New Gold Inc. ("New Gold") (TSX:NGD)(NYSE Amex:NGD), under which
New Gold will acquire 100% of the outstanding common shares of Geo by way of
plan of arrangement.


Under the plan of arrangement, Geo shareholders will receive $0.16 per share,
and 1/15th of a common share in a new exploration company ("SpinCo") for each
Geo common share held. Excluding the SpinCo consideration, the cash
consideration offered represents a premium of approximately 33% based on the
closing price of the Geo shares on October 14, 2011.


New Gold will also subscribe for 9.9% of the outstanding SpinCo common shares
for consideration of $250,000. On completion of the transaction, current Geo
shareholders will hold approximately 90.1% of the outstanding SpinCo shares, and
SpinCo will own all of Geo's assets and liabilities, except for cash retained by
Geo and Geo's West Blackwater mineral interests, located in central British
Columbia.


The board of directors of Geo unanimously approved the transaction and all
directors and senior officers of Geo, as well as certain other Geo shareholders,
collectively holding approximately 29% of the number of Geo securities
anticipated to be entitled to vote at a meeting of the Geo securityholders
(including holders of Geo shares, stock options, and share purchase warrants),
have agreed to vote their securities in favour of the transaction.


"The proposed transaction is an exciting opportunity for Geo and its
securityholders," said Michael England, Geo's President and Chief Executive
Officer. "This transaction provides Geo shareholders with both an immediate
meaningful premium reflecting the progress we have made with the Company and,
participation in an exploration SpinCo with a portfolio of prospective assets
located in British Columbia, Quebec and Arizona. We believe this unbundling of
the West Blackwater project and Geo's other exploration assets will ultimately
create the greatest value for our securityholders."


Transaction Details

The transaction will be carried out by way of a court-approved plan of
arrangement, and will require the approval of at least 2/3 of the votes cast by
shareholders, optionholders and warrantholders voting as a single class at Geo's
special meeting of shareholders, expected to take place in December 2011. The
transaction is also subject to applicable regulatory approvals, including
approval of the TSX Venture Exchange, and the satisfaction of certain closing
conditions customary in transactions of this nature.


Geo has engaged PI Financial Corp. to deliver a fairness opinion in connection
with the transaction.


If the transaction is completed, Geo shareholders will receive $0.16 for every
Geo share, and one SpinCo share for every 15 Geo shares. Options and warrants
not exercised prior to the completion of the arrangement will be deemed to have
been exercised on a cashless basis for Geo shares, but the holders will receive
that number of Geo shares obtained by dividing: (1) the amount, if any, by which
(A) the product obtained by multiplying the number of underlying shares by $0.16
exceeds (B) the aggregate total exercise price payable under such option or
warrant, by (2) $0.16.


Upon the recommendation of a special committee established to review the
transaction, Geo directors have determined that the transaction is in the best
interest of Geo and its securityholders, and have unanimously approved the
transaction. The directors intend to recommend, in the information circular for
the securityholder meeting, that Geo securityholders vote in favour of the
transaction.


Subject to New Gold's right to match, the board of Geo may terminate the
business combination agreement in favour of an unsolicited superior proposal
upon payment of a $230,000 break fee to New Gold. The special meeting of
securityholders of Geo and the closing of the transaction are targeted to occur
in December 2011. The completion deadline is February 15, 2012.


Geo Minerals is a junior mineral exploration company actively seeking mineral
opportunities for the benefit of all our stakeholders. For further information
we invite you to visit us at www.geominerals.ca.


ON BEHALF OF THE BOARD

Michael England, President and Director

Geo Minerals Ltd.

Cautionary Note Regarding Forward-Looking Statements

Certain information contained in this news release, including certain
information relating to the proposed transaction between Geo and New Gold, may
be deemed "forward-looking". All statements in this news release, other than
statements of historical fact, that address events or developments that Geo
expects to occur, are "forward-looking statements." Forward-looking statements
are statements that are not historical facts and are generally, but not always,
identified by the words "expects", "anticipate", "intends", "estimates" and
similar expressions, or that events or conditions "will", "would", "may",
"could", "should" or "might" occur. All such forward-looking statements are
based on the opinions and estimates of management as of the date such statements
are made and are subject to important risk factors and uncertainties, many of
which are beyond Geo's ability to control or predict. Forward-looking statements
are necessarily based on estimates and assumptions (including that the proposed
transaction will be completed successfully on the terms agreed upon by the
parties) that are inherently subject to known and unknown risks, uncertainties
and other factors that may cause actual results, level of activity, performance
or achievements to be materially different from those expressed or implied by
such forward-looking statements. 


Such risks include, without limitation: the ability to obtain all necessary
approvals and court orders to complete the proposed transaction; changes in
legislation in British Columbia and Canada or in other jurisdictions that Geo
may operate in that may affect the proposed transaction or its operations;
controls, regulations and political or economic developments in British Columbia
and Canada; the speculative nature of mineral exploration and development,
including the risks of obtaining and maintaining the validity and enforceability
of the necessary licenses and permits and complying with the permitting
requirements in British Columbia; competition; loss of key employees; additional
funding requirements; actual results of current exploration or reclamation
activities; changes in project parameters as plans continue to be refined;
accidents; labour disputes; defective title to mineral claims or property or
contests over claims to mineral properties. In addition, there are risks and
hazards associated with the business of mineral exploration, development and
mining, including environmental hazards, industrial accidents, and unusual or
unexpected formations. Forward-looking statements are not guarantees of future
performance, and actual results and future events could materially differ from
those anticipated in such statements. All of the forward-looking statements
contained in this news release are qualified by these cautionary statements. Geo
expressly disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, events or
otherwise, except in accordance with applicable securities laws.

Geo Minerals Ltd (TSXV:GM)
Historical Stock Chart
From May 2024 to Jun 2024

Geo Minerals Ltd (TSXV:GM)
Historical Stock Chart
From Jun 2023 to Jun 2024