news release.
Independent Fairness Opinion Supports Etruscan Acquisition
January 16, 1997, Dartmouth, Nova Scotia
Etruscan Enterprises Ltd. announced today that it had signed an agreement to acquire the remaining 44% of the shares of African GeoMin Mining Development Corporation ("AGMDC"). In April of 1996, Etruscan acquired 56% of AGMDC for $6,810,500. On August 23, 1996, Etruscan announced that it had entered into a non-binding letter of intent with the remaining shareholders of AGMDC to acquire the remaining 44% of the shares of AGMDC.
AGMDC holds the exploration permit for the Tiawa property in Niger, West Africa. Etruscan recently announced a geological mineral inventory of 1.81 million ounces of gold (27.8 million tonnes averaging 2.02 grams of gold per tonne) on the Samira area of the Tiawa property. This area, representing less than 10% of the property, was recently optioned to Placer Dome.
Each of Gerald J. McConnell, Angus G. MacIsaac and Pierre Besuchet, officers and directors of the Corporation, beneficially owns directly or indirectly 8.8% of the shares of AGMDC. The remaining 17.6% is held by parties at arm's length to the Corporation.
The acquisition agreement provides for the acquisition by Etruscan of the remaining 44% of the shares of AGMDC in consideration of the issuance of 2,600,000 common shares and approximately 3,815,000 third special warrants of the Corporation. The third special warrants will entitle the holder to receive, upon exercise and without payment of any additional consideration, one common share of Etruscan for each third special warrant and will be exercisable for a period of 12 months from the closing of the acquisition. The acquisition of the interests of Messrs. McConnell, MacIsaac and Besuchet in AGMDC has been structured to provide for the discharge of Besuchet's indebtedness to Etruscan (approximately $377,000) and the indirect assumption by Etruscan of MacIsaac's and McConnell's indebtedness to Etruscan (approximately $902,000 in aggregate) through the transfer or reduction in the number of Etruscan shares owned or to be issued directly or indirectly to the interested directors on the basis of one share for each $4.42 of indebtedness. The acquisition agreement is subject to obtaining all necessary shareholder and regulatory approvals and consents including that of the Vancouver Stock Exchange.
As a result of the interests of the interested directors, an independent committee of the Board of Directors of Etruscan was established to negotiate the terms of the binding agreement with the owners of the remaining 44% of the shares of AGMDC. The Independent Committee retained the firm of RBC Dominion Securities Inc. to provide an objective assessment as to whether the transaction was fair from a financial point of view to the disinterested shareholders of Etruscan.
In its valuation and fairness opinion issued January 14, 1997, RBC Dominion Securities Inc. valued the shares of AGMDC and the common shares of the Corporation before and after giving effect to the acquisition. RBC Dominion Securities Inc. determined that the fair market value of the AGMDC shares was in the range of $42.3 million to $71.4 million, or $18.6 to $31.4 million for 44% of the shares of AGMDC. It also determined the fair market value of Etruscan prior to the acquisition to be $94.7 million to $112.3 million, being $3.71 to $4.41 per common share. The value of Etruscan after the acquisition was estimated to be in the range of $4.18 to $6.62 per common share. RBC Dominion Securities was of the opinion that the acquisition was fair, from a financial point of view, to the disinterested shareholders of Etruscan.
The Independent Committee of the Board of Directors unanimously accepted the opinion of RBC Dominion Securities Inc. and concluded that the acquisition was in the best interests of the Corporation. The Independent Committee recommended that the Board of Directors approve the acquisition. At a meeting held on Januaryÿ14,ÿ1997, the Board of Directors of Etruscan determined that the acquisition was fair to the disinterested shareholders from a financial point of view and in the best interests of Etruscan. A meeting of the shareholders of Etruscan will take place on Wednesday, February 19, 1997 in order to give the shareholders an opportunity to consider and approve the acquisition. Proxy materials will be mailed shortly.
Etruscan Enterprises Ltd. is involved in the acquisition, exploration and development of mineral properties in North America and West Africa.
ON BEHALF OF THE BOARD OF DIRECTORS
Gerald J. McConnell, President |
