U.S. Gold Corporation Consolidating Cortez Trend in Nevada
Sunday March 5, 6:25 pm ET
INTENDS TO ACQUIRE 4 COMPANIES
DENVER--(BUSINESS WIRE)--March 5, 2006--White Knight Resources, Nevada Pacific Gold, Coral Gold & Tone Resources
LARGER PROPERTY POSITION, STRONGER TREASURY, AGGRESSIVE EXPLORATION, MULTIPLE TARGETS
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U.S. Gold Corporation (OTCBB:USGL - News) today announced that it intends to acquire, in stock transactions, all of the outstanding common shares of four companies that are exploring in the Cortez Trend in Nevada. These companies, White Knight Resources Ltd. (TSX VENTURE:WKR - News), Nevada Pacific Gold Ltd. (TSX VENTURE:NPG - News), Coral Gold Resources Ltd. (TSX VENTURE:CGR - News), and Tone Resources Ltd. (TSX VENTURE:TNS - News), have mineral properties that are adjacent to or near U.S. Gold's Tonkin Springs property. Together these mineral properties would represent a significant land position and consolidation in the Cortez Trend.
This proposal was made in letters sent today by Rob McEwen, Chairman and Chief Executive Officer of U.S. Gold, to the chief executive officers of each of the subject companies. U.S. Gold's proposal represents a premium of 25% to the closing stock prices of each company's shares on March 3, 2006.
Under this proposal, U.S. Gold would issue:
- 0.35 share of U.S. Gold common stock for each outstanding common share of White Knight;
- 0.23 share of U.S. Gold common stock for each outstanding common share of Nevada Pacific Gold;
- 0.63 share of U.S. Gold common stock for each outstanding common share of Coral Gold; and
- 0.26 share of U.S. Gold common stock for each outstanding common share of Tone Resources, representing in the aggregate approximately US$256.9 million (C$291.7 million) total value based on the closing price of U.S. Gold's common stock on March 3, 2006.
The transactions are subject to a number of conditions, including determination of the precise forms of the transactions, due diligence and shareholder and regulatory approvals.
Rob McEwen, Chairman and Chief Executive Officer of U.S. Gold, said: "As I have frequently stated, our goal is to build the premier exploration company in Nevada. This initiative represents a significant step in that direction. The combination of these companies should appeal to a larger group of investors and should offer the potential for more share appreciation than any one company on its own. The new combined company could provide the land package of a major, the balance sheet strength and market liquidity of an intermediate and the upside price leverage to discovery of a junior. Each company brings an outstanding technical team. The combined company would allow us to bring these teams together."
The Board of Directors of U.S. Gold formed a special committee to evaluate the terms of each of the transactions in recognition of, among other things, the equity interests of Mr. McEwen in the each of the four companies. |
