Mandalay Resources Completes Acquisition of Elgin Mining The Plan of Arrangement
Pursuant to the Arrangement, Mandalay acquired each outstanding Elgin common share (each, an "Elgin Share") in exchange for CDN$0.37 in cash (the "Cash Consideration") or 0.4111 of a Mandalay common share (each, a "Mandalay Share") (the "Share Consideration"), subject to pro-ration if the aggregate Cash Consideration would exceed CDN$27 million or the aggregate Share Consideration would exceed 50 million Mandalay Shares.
Based on valid elections received prior to the election deadline and deemed elections, shareholders of Elgin (the "Elgin Shareholders") elected to receive:
the Share Consideration in respect of 188,980,537 Elgin Shares (which, at 0.4111 of a Mandalay Share per Elgin Share, would result in aggregate Share Consideration of approximately 77.7 million Mandalay Shares); and
the Cash Consideration in respect of 4,461,519 Elgin Shares (which, at CDN$0.37 per Elgin Share, would result in aggregate Cash Consideration of approximately CDN$1.7 million).
Since the aggregate Share Consideration would otherwise exceed 50 million Mandalay Shares, all elections (including deemed elections) have been pro-rated in the manner described in the management information circular dated July 25, 2014 prepared by Elgin in connection with the Arrangement. This has resulted in the number of Mandalay Shares that each Elgin Shareholder exchanged for the Share Consideration being reduced by applying an approximate 64.358% pro-ration factor.
For illustrative purposes only, and using the example of an individual holding 1,000 Elgin Shares:
if such Elgin Shareholder elected to receive Cash Consideration in respect of all of their Elgin Shares held, the Elgin Shareholder would be entitled to receive CDN$370 (being CDN$0.37 for each Elgin Share); or
if such Elgin Shareholder elected (or was deemed to have elected) to receive Share Consideration in respect of all of their Elgin Shares, the Elgin Shareholder would be entitled to receive approximately 264 Mandalay Shares in consideration for a portion of their Elgin Shares and CDN$131.88 cash in consideration for the remaining portion of the Elgin Shares.
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