IAMGOLD announces that it does not intend to pursue the Golden Star Resources
proposal and confirms its recommendation that shareholders vote for the combinat
on with Wheaton@ --------------------------------------------- TSX Trading Symbo
: IMG AMEX Trading Symbol: IAG Total Shares Outstanding: 145.5MM Fully Diluted:
51.5MM 52-Week Trading Range: Cdn$5.75 - $10.99 --------------------------------
------------ ( Canada NewsWire )
TORONTO, May 31, 2004 (Canada NewsWire via COMTEX) -- The Board of Directors of
IAMGOLD Corporation ("IAMGOLD") today announced that, after careful
consideration and consultation with its external financial and legal advisors,
IAMGOLD will not be pursuing the proposal delivered to it by Golden Star
Resources ("GSR") on May 27, 2004. The Board also announced that the
shareholders meeting to approve the business combination with Wheaton River
Minerals Ltd. ("Wheaton") will proceed as scheduled on June 8, 2004. The Board
unanimously confirmed its recommendation that IAMGOLD shareholders vote in
favour of the business combination with Wheaton.
IAMGOLD also understands that the Board of Wheaton has determined not to pursue
the offer received from Coeur d'Alene Mines Corporation and that Wheaton's Board
has confirmed its recommendation that Wheaton shareholders vote in favour of the
Wheaton/IAMGOLD combination.
IAMGOLD believes that its shareholders should continue to have the right to
consider and vote upon the Wheaton business combination at IAMGOLD's shareholder
meeting on June 8, 2004.
Joseph Conway, President and CEO of IAMGOLD commented "The objective of the
business combination between IAMGOLD and Wheaton River is to give shareholders
of the two companies exposure to additional low cost gold production, geographic
diversity and a strong balance sheet with exceptional cash flow. These strong
fundamentals overwhelmingly exist within the IAMGOLD- Wheaton River
transaction."
William Pugliese, Chairman of IAMGOLD stated "The suggestion of substantial
shareholders concern regarding the IAMGOLD-Wheaton transaction appear to be
exaggerated as evidenced by current results from voting on the IAMGOLD-Wheaton
transaction. Given the level of shareholder support already indicated we remain
confident the best interests of shareholders are more properly served by
completing the process by voting on the IAMGOLD-Wheaton transaction on June
8th."
Summary of the Board's Rationale for not Proceeding with the GSR Proposal
- The combination with Wheaton continues to offer the best prospects
for long term value.
The Board of IAMGOLD believes that the Wheaton business combination continues to
offer the best prospects for long-term value. IAMGOLD entered into the Wheaton
transaction after considering the merits of pursuing consolidation opportunities
with other industry participants, including GSR.
The IAMGOLD Board believes that the Wheaton business combination affords its
shareholders with a superior opportunity to participate in a leading
intermediate low cost gold producer. The new company to be created from the
combination of IAMGOLD with Wheaton, AXIOM Gold Corporation ("AXIOM") will be
well positioned for internal growth and has the financial strength and
flexibility to take advantage of consolidation and acquisition opportunities.
The IAMGOLD Board does not believe that the GSR proposal creates the same
strategic benefits for IAMGOLD or its shareholders.
- The GSR Proposal reduces IAMGOLD's financial strength.
The combination with Wheaton creates a financially strong company with a cash
balance at the time of the June 8th closing of approximately US$300 million.
With the development of the Los Filos and Amapari projects the cash position of
AXIOM is expected to rise to US$650 million in two years. In contrast, the GSR
proposal could result in a cash balance of approximately US$375 million by the
end of 2006.
- The GSR proposal is dilutive to earnings, cash flow and net asset
value per share.
AXIOM represents an opportunity for IAMGOLD to increase its earnings and cash
flow per share over the short and long term. On a net asset value per share, the
combination with Wheaton does not impact the company's value in current market
conditions and becomes accretive at lower gold prices as a result of AXIOM's low
operating costs.
- GSR represents greater project development risk.
Neither IAMGOLD or Wheaton are overly reliant on development projects, currently
producing 450,000 ounces and 550,000 ounces of gold per year respectively.
Golden Star is a 190,000 ounce per year producer with an additional 275,000
ounces per year expected from its development projects. Golden Star's Wassa
project is already six months behind schedule. In that regard, Golden Star's
Wassa project start up is currently deferred to the third quarter of this year.
- The GSR proposal is not a formal offer.
The GSR Proposal is a proposal only, not a formal offer, is subject to due
diligence and other unspecified conditions. IAMGOLD understands a regulatory
approval process of at least three months is likely required under any
transaction with GSR, thereby exposing IAMGOLD shareholders to uncertainty of
closing. We note that the Wheaton transaction was announced on March 30, 2004
and the proposal from GSR was only received on May 27, 2004.
- The GSR Offer does not constitute a "Superior Proposal" under the
Arrangement Agreement with Wheaton.
Under the Arrangement Agreement, neither Wheaton nor IAMGOLD is permitted to
negotiate in respect of a competing proposal unless the proposal constitutes a
"Superior Proposal". In the case of IAMGOLD, the GSR Proposal would have to
deliver value to the IAMGOLD shareholders of $9.82 or greater in order for it to
constitute a Superior Proposal. The GSR Offer does not do so.
Summary of AXIOM Gold Corporation
IAMGOLD and Wheaton River announced a business combination to be completed by
way of a Plan of Arrangement whereby each Wheaton River common share will be
exchanged for 0.55 of an IAMGOLD common share. All outstanding warrants of
Wheaton River will be exercisable on similar share exchange terms as offered by
IAMGOLD for Wheaton River's common shares (for example 100 Wheaton River
warrants with a C$1.65 strike price expiring on May 30, 2007 would be
exercisable for 55 IAMGOLD common shares with a C$3.00 strike price expiring on
May 30, 2007). The common shares of the new company will continue to trade on
the Toronto Stock Exchange and the American Stock Exchange. The proposed
business combination between IAMGOLD and Wheaton River is to be decided at the
company's respective shareholder meetings to be held on June 8, 2004 commencing
at 11:00 a.m. EST at the Design Exchange, Toronto Ontario, Canada.
The new company was created based on the 'axiom' (a statement universally
accepted as true) that for a business to deliver long-term sustainable benefits
to its stakeholders, including its shareholders and the communities in which it
works, it must generate strong and sustainable cash flow. AXIOM will be unique
among its gold mining industry peers in its ability to deliver on this
objective, a result of:
- its compelling balance of consistent, strong cash flow derived from
its attractive, geographically and politically diverse operating
interests in seven gold mines located in the Americas, West Africa
and Australia;
- the potential of its two near-term development projects;
- its portfolio of exploration properties and joint ventures; and
- its strong balance sheet, cash position and cash flow generating
potential that enables it to continue to grow by investing in a
balance of acquisitions of gold mining and/or development companies
or assets, project development and exploration.
AXIOM's forecast, annualized 2004 production will be 1.0 million gold equivalent
ounces, plus exposure to copper production. Three mines, including the Sadiola
mine in Mali, Tarkwa mine in Ghana and the Bajo de la Alumbrera mine in
Argentina are world-class with respect to annual production rates, cash
operating costs and reserves and resources and are operated by some of the most
respected companies and management teams in the industry and are coupled by
AXIOM's strong and consistent, solely owned and operated Luismin mines in Mexico
and the Peak mine in Australia. The combined company's forecast 2004 gold
equivalent cash operating costs are estimated to total less than US$100 per
ounce. AXIOM will have proven and probable reserves of 9.0 million ounces plus
additional measured and indicated resources of 4.4 million ounces and inferred
resources of 10.5 million ounces. The new company will have strong operating
cash flow and excellent financial flexibility with US$300 million in cash and
gold bullion.
AXIOM will have an attractive balance of immediate and near-term production
growth through the development of the Amapari project in Brazil, the Los Filos
project in Mexico and expansion of the Tarkwa mine in Ghana. These projects are
expected to add over 300,000 ounces of annual gold production in 2006 at low
cash operating costs. In addition, AXIOM will have a large portfolio of
exploration projects in the Americas and West Africa.
Proxy-Voting Procedures
Registered shareholders of IAMGOLD who wish to submit proxies or who have
submitted proxies and who wish to revoke their proxies should follow the
procedures set forth in the joint management information circular dated April
30, 2004 of IAMGOLD and Wheaton. Non-registered shareholders of IAMGOLD who wish
to submit proxies or who wish to change voting instructions previously delivered
to brokers or other intermediaries through which their IAMGOLD shares are held
should contact their brokers or other intermediaries in order to change their
voting instructions.
Cautionary Statements
Safe Harbor Statement under the United States Private Securities Litigation
Reform Act of 1995: Except for the statements of historical fact contained
herein, the information presented constitutes "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements, including but not limited to those with respect to
the price of gold, silver and copper, the timing and amount of estimated future
production, costs of production, reserve determination and reserve conversion
rates involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievement of IAMGOLD or Wheaton to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, risks related to the integration of acquisitions, risks related to
international operations, risks related to joint venture operations, the actual
results of current exploration activities, actual results of current reclamation
activities, conclusions of economic evaluations, changes in project parameters
as plans continue to be refined, future prices of gold, silver and copper, as
well as those factors discussed in the section entitled "Risk Factors" in the
Form 40-F for each company as on file with the Securities and Exchange
Commission in Washington, D.C. Although IAMGOLD has attempted to identify
important factors that could cause actual results to differ materially, there
may be other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove to be
accurate as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue
reliance on forward- looking statements.
Investors are advised that National Policy 43-101 of the Canadian Securities
Administrators requires that each category of mineral reserves and mineral
resources be reported separately. Investors and securities holders should refer
to the respective annual information forms of IAMGold and Wheaton, each for the
year ended December 31, 2003 available at www.sedar.com, for this detailed
information, which is subject to the qualifications and notes set forth therein.
United States investors are advised that while the terms "measured", "indicated"
and "inferred" resources are recognized and required by Canadian regulations,
the SEC does not recognize them. Inferred mineral resources have a great amount
of uncertainty as to their existence and great uncertainty as to their economic
and legal feasibility. It cannot be assumed that all or any part of an inferred
mineral resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of inferred mineral resources may not form the basis of
feasibility or other economic studies. Investors are cautioned not to assume
that all or any part of mineral deposits in these categories will ever be
converted into reserves. Investors are also cautioned not to assume that all or
any part of an inferred mineral resource exists or is economically or legally
mineable.
Please note:
------------
This entire press release may be accessed via fax, e-mail, IAMGOLD's website at
www.iamgold.com and through Canada Newswire's website at www.newswire.ca. All
material information on IAMGOLD can be found at www.sedar.com or at www.sec.gov.
VIEW ADDITIONAL COMPANY-SPECIFIC INFORMATION:
newswire.ca
CONTACT: For further information: Joe Conway, President and CEO, or To
Atkins,
Vice-President, Investor Relations; Tel: (416) 360-4710, Fax:
(416) 360-4750,
Toll-free: 1-888-IMG-9999
News release via Canada NewsWire, Toronto 416-863-9350
Copyright (C) 2004 CNW, All rights reserved
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KEYWORD: TORONTO
INDUSTRY KEYWORD: PCS
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