Combination of RX Gold and US Silver reaffirmed by US Silver Board
29 July 2012 - 5:23PM
PR Newswire (Canada)
TORONTO, July 30, 2012 /CNW/ - RX Gold & Silver Inc. ("RX Gold"
or the "Company") responded to the press release issued earlier
today by US Silver Corporation ("US Silver") rejecting the
unsolicited cash offer by Hecla Mining Company ("Hecla") for US
Silver. RX Gold is pleased that the board of directors of US
Silver has recommended that US Silver shareholders reject the Hecla
offer and instead vote in favour of the combination of RX Gold and
US Silver. Sprott Asset Management continues to support the
combination of RX Gold and US Silver. Darren Blasutti, President
& Chief Executive Officer of RX Gold stated, "We believe the
Hecla cash offer ignores the stated near-term value creation
opportunities available to US Silver shareholders through our
combination including (i) a stronger combined management team, (ii)
current capital re-investment to improve access and infrastructure
at the Galena mine, (iii) increased production later this year from
the Coeur area, (iv) exciting exploration results from the Calladay
bulk mining zone, and (v) participation in $10 million per year of
expected combination synergies. We expect these opportunities
will contribute to a significant reduction in the operating costs
at the Galena mine in the coming quarters and years. " "Continued
execution of this business plan, accretive M&A opportunities,
and a recovery in commodity prices and share trading multiples,
will generate significantly greater returns than the C$1.80 per
share cash offered by Hecla. The Hecla offer values US Silver's
operating assets at less than $2.00 per silver resource ounce
compared to the current silver price of $27.50 per ounce." The
board of directors of RX Gold unanimously recommends that the RX
Gold shareholders vote FOR the combination transaction at the
upcoming special meeting of the RX Gold shareholders on August 7,
2012. The deadline for the deposit of proxies for the meeting
by registered shareholders of RX Gold is 5:00 p.m. (Toronto time)
on August 2, 2012. Non-registered shareholders should carefully
follow the instructions provided by their intermediary, including
applicable deadlines, to ensure their vote is counted. Shareholders
with questions or requiring more information with respect to voting
shares at the special meeting may contact RX Gold's proxy
solicitation agent, Laurel Hill Advisory Group, by email at
assistance@laurelhill.com or by telephone at 1-877-304-0211 (toll
free within Canada or the U.S.) or 1-416-304-0211 (for calls
outside Canada and the U.S.). RX Gold Recent Production Highlights
Full year-end results for RX Gold are expected to be issued on or
before October 31st, 2012. Mining ramp-up at the 100% owned
Drumlummon Mine began January 15th, 2012. Production
highlights for the period from January 1(st) through June 30, 2012
include: -- Approximately 16,200 ounces of gold equivalent
production, consisting of approximately 12,100 ounces of gold and
approximately 216,200 ounces of silver, respectively. On a silver
equivalent basis, reported production was approximately 862,000
ounces. -- Approximately 54,300 tons were milled at an estimated
head grade of 0.246 oz./ton of gold and 4.71 oz./ton of silver with
mill recoveries for gold and silver of 91% and 84%, respectively.
Based on the preliminary unaudited financial results, the Company
is expected to report its first quarterly profit for the quarter
ended June 30, 2012. About RX Gold & Silver Inc. RX Gold is a
gold and silver mining company focused on growth in North America.
Currently RX Gold is concentrating on continuing mining under its
current permits and expanding development at its 100%-owned
Drumlummon Mine. The Drumlummon Mine is a bonanza style low
sulphidation epithermal gold and silver deposit with historic
production of approximately one million ounces of gold equivalent.
The mine has never been fully exploited or explored and material
that was once considered waste is now potentially economic. In
addition, RX Gold has discovered a series of entirely new
high-grade gold and silver veins that remain open for expansion in
three directions. Cautionary Statement Regarding Forward-Looking
Information This news release contains "forward-looking
information" within the meaning of applicable securities laws.
Forward-looking information includes, but is not limited to,
the Company's expectations intentions, plans, and beliefs with
respect to, among other things, the combination of RX Gold and US
Silver and the Drumlummon Mine. Often, but not always,
forward-looking information can be identified by forward-looking
words such as "anticipate", "believe", "expect", "goal", "plan",
"intend", "estimate", "may", and "will" or similar words suggesting
future outcomes, or other expectations, beliefs, plans, objectives,
assumptions, intentions, or statements about future events or
performance. Forward-looking information is based on the opinions
and estimates of the Company as of the date such information is
provided and is subject to known and unknown risks, uncertainties,
and other factors that may cause the actual results, level of
activity, performance, or achievements of the Company or its
successors to be materially different from those expressed or
implied by such forward looking information. This includes the
ability to develop and operate the Drumlummon property, risks
associated with the combination of RX Gold and US Silver, including
the ability to achieve anticipated synergies, risks associated with
the mining industry such as economic factors (including future
commodity prices, currency fluctuations and energy prices), failure
of plant, equipment, processes and transportation services to
operate as anticipated, environmental risks, government regulation,
actual results of current exploration activities, possible
variations in ore grade or recovery rates, permitting timelines,
capital expenditures, reclamation activities, social and political
developments and other risks of the mining industry. Although
RX Gold has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated, or intended. Readers
are cautioned not to place undue reliance on such information. By
its nature, forward-looking information involves numerous
assumptions, inherent risks and uncertainties, both general and
specific, that contribute to the possibility that the predictions,
forecasts, and projections of various future events will not occur.
The Company undertakes no obligation to update publicly or
otherwise revise any forward-looking information whether as a
result of new information, future events or other such factors
which affect this information, except as required by law. Neither
the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this
release. RX Gold & Silver Inc. CONTACT: Darren
BlasuttiPresident and Chief Executive OfficerNicole RichardInvestor
Relations(416) 848-9503inbox@rxgold.com (www.rxgold.com)
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