Wolfden Announces Premier Gold Mines Limited Launches Acquisition of Sedimentary Holdings Limited
Friday August 18, 8:24 am ET
ca.us.biz.yahoo.com
Shares Issued: 74,647,878
THUNDER BAY, ON, Aug. 18 /CNW/ - Premier Gold Mines Limited ("Premier") and Sedimentary Holdings Limited ("Sedimentary"), (AU: SED) an Australian based mining company, have entered into a merger implementation agreement dated August 17, 2006 to provide a framework for proposing and implementing a scheme of arrangement between Sedimentary and its shareholders (the "Scheme") under which Premier will acquire for cash all of the outstanding shares (the "Shares") of Sedimentary for A$0.31 per share. This offer values Sedimentary at approximately A$87.5 million. This offer is conditional upon approval by shareholders of both companies as well as both court and regulatory approvals.
Sedimentary holds several high-grade gold projects in Australia including a 30 percent interest in the Cracow Gold Mine. Cracow is a 100,000+ ounce per annum gold mine operated by Newcrest Mining Limited (70%) that in the last quarter produced at a cash cost of US$253 per ounce of gold, with 9,135 ounces to Sedimentary's account. Cracow was put in production in July 2005 and Newcrest and Sedimentary have since discovered a new zone on the property, the Kilkenny Zone, which has returned numerous high grade intersections, including 23g/t Au across 6.4 meters, and 21 g/t Au across 9.3 meters.
Commenting on the merger proposal, Premier's CEO, Ewan Downie, said "we believe that this offer represents a full and fair value for Sedimentary shares and provides all Sedimentary shareholders with the ability to sell with the certainty of cash at a level that Sedimentary has not traded at since November 2004."
Sedimentary's Managing Director, Rob Devereux was quoted as saying "The Sedimentary Directors welcome the Premier cash offer which they believe is superior to the existing offer from AuSelect."
The Directors of Sedimentary unanimously endorsed the merger proposal and recommend that Sedimentary shareholders vote in favour of the Premier offer. In addition, Lion Selection Group Limited (which as a 23.7% shareholder in Sedimentary) has informed Sedimentary that it intends to vote in favour of the merger in the absence of a higher offer.
The implementation of the Scheme is subject to certain conditions precedent which must be satisfied or waived (as applicable) on or before the date on which the Federal Court of Australia Court (the "Court") is convened for the purposes of considering an order pursuant to the Corporations Act 2001 (Cth) (Australia) (the "Corporations Act") in relation to the Scheme (unless otherwise stated). The conditions precedent include, but are not limited to the following:
- the Scheme is approved by the Court pursuant to section 411(4)(b) of
the Corporations Act and becomes effective on such conditions as are
imposed by the Court and are reasonably acceptable to Premier;
- there being no prohibitive orders or determinations that prevent the
implementation of the Scheme;
- there being no Sedimentary prescribed occurrences that occur (these
occurrences primarily relate to Sedimentary reorganizing its share
capital, Sedimentary varying its constitution or material contracts,
and Sedimentary encumbering its business or property and the ongoing
solvency of Sedimentary);
- there being no Sedimentary regulated event that occurs (these events
primarily relate to Sedimentary taking any action to distribute cash
outside the company);
- receipt by Premier of a notice from the Treasurer of the Commonwealth
of Australia (or its agent) that there is no objection to the
proposed acquisition by Premier of the Shares under the Commonwealth
Government's foreign investment policy;
- receipt of the approval of the Australian Securities and Investments
Commission ("ASIC") and the Australian Stock Exchange ("ASX") and
other regulatory approvals required in Australia;
- there being no termination of the merger implementation agreement;
- there being no material adverse change that occurs in respect of
Sedimentary;
- all change of control consents and approvals required under any
material contracts of Sedimentary are obtained;
- within 10 business days of the date of the merger implementation
agreement, Premier enters into financing agreements on terms
satisfactory to it;
- within five business days of the date of the merger implementation
agreement, Lion Selection Group Limited confirms their intention to
vote in favour of the Scheme;
- the price of gold does not fall below US$575;
- no information filed by Sedimentary with ASX or ASIC contains
statements that are incorrect or misleading or contain a material
omission;
- within five business day of the merger implementation agreement,
Premier is provided with information concerning the mineral
properties and financial information required to enable it to comply
with applicable Canadian securities regulations;
- all regulatory and third party approvals (including the approval of
the shareholders of Premier) required in Canada are obtained.
In addition, pursuant to the merger implementation agreement, Sedimentary
must not, subject to the exceptions set out below or without the consent of
Premier:
- solicit, encourage or initiate any competing transaction;
- participate in any discussions or negotiations, provide any
information or take any other action to induce or facilitate any
other person pursuing a competing transaction;
- enter into any agreement in relating to a competing transaction;
- approve or recommend a competing transaction; or
- disclose any information about its businesses or affairs to a third
party.
Sedimentary may undertake any action that would otherwise be prohibited by
the above exclusivity arrangements in relation to a bona fide competing
transaction which was not solicited by Sedimentary where the directors of
Sedimentary are acting in good faith and in order for the directors of
Sedimentary to satisfy their fiduciary and statutory duties. This includes the
continuation of any existing discussions.
Sedimentary has agreed to pay Premier an amount equal to A$900,000 (the
"Break Fee") if
- a condition precedent in the merger implementation agreement is not
fulfilled as a consequence of a material act or omission of
Sedimentary;
- the directors of Sedimentary fail to recommend or adversely modify
their recommendation or otherwise do something that prevents the
Scheme from proceeding;
- a competing transaction is completed or becomes unconditional; and
- the Scheme is not approved by the shareholders of Sedimentary.
The merger implementation agreement may be terminated by either party at
any time before completion by giving the other party written notice if:
- the other party is in material breach of any clause of the merger
implementation agreement or there has been a material breach of a
representation or warranty; and
- the non-defaulting party has given the defaulting party a written
notice:
- setting out the relevant circumstances; and
- stating its intention to terminate; and
- the relevant circumstances continue to exist seven business days (or
any shorter period ending immediately before completion) from the
time the notice is given.
Premier may terminate the merger implementation agreement immediately if a Sedimentary Director fails to recommend the Scheme or adversely changes or withdraws his recommendation.
Meeting materials in connection with the Scheme are expected to be sent to the shareholders of Sedimentary before the end of September 2006. A meeting of the shareholders of Sedimentary to vote on the Scheme is expected to be held during October 2006.
Mr. John Cook, is the qualified person for the information contained in this press release and is a Qualified Person within the meaning of National Instrument 43-101.
The statements made in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections.
For further information
John Seaman, CFO, Phone: (807) 346-1668, Fax: (807) 345-0284, e-mail: Info@wolfdenresources.com, Web Site: www.wolfdenresources.com
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Source: Wolfden Resources Inc. |
