FOR: PACIFIC RIM MINING CORP.
SEC FILE: 029704
TSE SYMBOL: PFG
AND DAYTON MINING CORPORATION
TSE, AMEX SYMBOL: DAY
JANUARY 9, 2002 - 09:47 EST
Pacific Rim and Dayton Mining Propose Merger
VANCOUVER, BRITISH COLUMBIA--Pacific Rim Mining Corp. ("Pacific
Rim") and Dayton Mining Corporation ("Dayton") are pleased to
announce the approval by their Boards of Directors of an
amalgamation of the companies, subject to shareholder and
regulatory approval. Under the amalgamation Dayton shareholders
will receive 1.760 common shares of Pacific Rim in exchange for
each common share of Dayton, resulting in Dayton and Pacific Rim
shareholders comprising 70% and 30% of the merged company
respectively. After the transaction, the merged company will have
approximately 78,276,794 shares outstanding. Fairness opinions
regarding the amalgamation will be provided by Haywood Securities
on behalf of Pacific Rim and Dundee Securities Corporation on
behalf of Dayton.
Tom Shrake and Catherine McLeod-Seltzer will continue their
executive roles of CEO and President respectively in the
amalgamated company. Bill Myckatyn will serve as non-executive
Chairman of the amalgamated Board of Directors. Other directors
will include Pacific Rim nominees Tony Petrina, Thomas Shrake and
Catherine McLeod-Seltzer and Dayton nominees Robert Buchan and
David Fagin.
Both Pacific Rim and Dayton recognize that the primary driver for
shareholder value in the gold industry today is profit, which is
best served by the discovery and development of sizeable,
economically viable gold deposits with potential for operating
costs in the lower quartile on a worldwide basis. Dayton's El
Dorado gold project in El Salvador has the potential to become a
low-cost underground gold operation capable of generating
significant free cash flow in today's gold price environment. The
amalgamation of Pacific Rim and Dayton will provide the financial
resources to facilitate the immediate advancement of the El Dorado
project.
El Dorado is an epithermal gold project comprising 35 individual
quartz veins that exceed 18 km in aggregate strike length. The El
Dorado Mine (which exploited the Minita vein system) historically
produced 78,000 ounces of gold at an average grade of 9.6 g/t. In
its 2000 Annual Report, Dayton reported an indicated resource
below the historic workings of the Minita vein system of 799,200
tonnes averaging 13.7 g/t gold and 97.9 g/t silver, and an
inferred resource of 110,600 tonnes averaging 10.8 g/t gold and
76.9 g/t silver. The indicated resource contains 352,700 ounces of
gold and 2,516,000 ounces of silver, while the inferred resource
contains an additional 38,400 ounces of gold and 273,000 ounces of
silver (see note below regarding NI 43-101).
Importantly, the most recent drilling by Dayton demonstrates that
the better grades in the Minita vein system occur at depth, with
the most productive interval between approximately 250 m and 100 m
above sea level. Higher grade mineralization has also been
drilled at similar depths on the Coyotera Vein, roughly 4 km to
the north of the old mine. The vast majority of previous drilling
tested selected veins above this 'productive' elevation range.
The focus of the merged company will be the discovery and
delineation of additional high-grade ounces by drill testing vein
targets throughout the El Dorado epithermal system at the
'productive' elevation range. The cash from Pacific Rim's sale of
the Diablillos project (see Pacific Rim news releases #01-04,
#01-05 and #01-06) will provide the funds to conduct this
exploration work in an aggressive manner.
In addition to El Dorado, Dayton has a 49% non-operating interest
in the Rawhide Mine in Nevada and 100% ownership of the Andacollo
Mine in central Chile. Rawhide will cease open pit mining in
July, 2002 but will crush lower grade stockpile material for six
months and then continue to leach for several years. Rawhide is
expected to generate in excess of US $8 million in cash flow to
the merged company over the next three years at today's gold
prices. Dayton de-consolidated its interest in Andacollo at the
end of November, 2000. Andacollo has been actively leaching
residual precious metals from the heap since August, 2000 and has
also successfully liquidated most of its mining equipment.
"We are extremely excited by the win-win opportunity this
amalgamation presents," states Pacific Rim CEO Tom Shrake. "The
El Dorado gold project represents a unique opportunity to explore
a high-grade, potentially low-cost gold deposit with a known
resource and substantial upside potential." "The upside potential
of the El Dorado project is the primary reason behind Pacific
Rim's pursuance of this merger," adds Pacific Rim President
Catherine McLeod-Seltzer, "but the amalgamation is further
strengthened by Dayton's asset base."
Dayton's President and CEO, Bill Myckatyn states, "Rawhide will
generate good cash flow at current gold and silver prices over the
next few years. The proven technical team and immediate cash that
Pacific Rim brings to the merged company will allow meaningful
work to be undertaken at El Dorado right away. The merged company
will be a very well-financed exploration and development company
with a potentially world class asset."
Both Pacific Rim and Dayton anticipate holding shareholders'
meetings in early April, 2002 to consider the merger. Further
information regarding the merger will be included in subsequent
shareholder material. Additional information is available on
Pacific Rim's website (www.pacrim-mining.com) or by contacting
Pacific Rim's or Dayton's offices. Pacific Rim and Dayton will
present an audio webcast discussion regarding this announcement on
January 9, 2002 at 10:30 am Pacific Time. To listen to this
webcast and view the accompanying Adobe Acrobat presentation,
visit Pacific Rim's website.
Note regarding El Dorado resource and NI 43-101: The El Dorado
resource estimate was prepared by Mr. Peter Lacroix, P.Eng., a
Qualified Person, and uses the categories for mineral resources
applicable in NI 43-101. The resource is current, relevant and
reliable.
On behalf of the Boards of Directors,
Pacific Rim Mining Corp.
Catherine McLeod-Seltzer, President
Dayton Mining Corporation
William H. Myckatyn, President & CEO
The statements contained in this release that are not historical
facts are forward-looking statements, which involve risks and
uncertainties that could cause actual results to differ materially
from targeted results. These risks and uncertainties include but
are not limited to anticipated exploration plans, possible
exploration results and future approvals by shareholders.
The TSE has neither reviewed nor accepts responsibility for the
adequacy or accuracy of this release. |
