Big day for the portfolio here congrats to the longs...hsb
Kinross Gold Corporation Announces Proposed Acquisition of Underworld Resources Inc.
Last Update: 3/11/2010 10:08:55 AM
VANCOUVER, BRITISH COLUMBIA, Mar 11, 2010 (Marketwire via COMTEX) --Underworld Resources Inc. (UW) and Kinross Gold Corporation (K)(KGC)announced today that their respective Boards of Directors have approveda business combination by way of a friendly offer (the "Offer") byKinross to acquire 100% of the outstanding common shares of Underworld(the "Common Shares") not already owned by Kinross. Subject to theexecution of definitive agreements, the board of directors ofUnderworld unanimously recommends the offer to its shareholders and thedirectors and management team have agreed to tender their shares to theoffer. Pursuant to the terms of the letter agreement, Underworld hasagreed to work exclusively with Kinross toward the conclusion of adefinitive support agreement which is anticipated to be executed anddelivered by the parties by March 15, 2010.
Elements of the transaction include
- For each Common Share of Underworld, Kinross will offer 0.141of a Kinross common share, plus
.01 in cash. The Offer represents animplied offer price of approximately $2.62 per Common Share, based onthe March 10, 2010 closing price of $18.54 per Kinross common share onthe Toronto Stock Exchange (the "TSX"). The transaction values thefully-diluted share capital of Underworld at approximately $139.2million.
- The Offer represents an attractive and immediate premium of36.0% over the closing price of the Common Shares on the TSX VentureExchange ("TSX-V") on March 10, 2010, the last day of trading prior toannouncement of the Offer, and a premium of approximately 50.2% basedon the volume-weighted average prices of the Common Shares and Kinross'common shares, for the 20 trading days ended March 10, 2010.
- The Board of Directors of Underworld, after receiving therecommendation of a special committee of independent directors createdby Underworld to oversee the transaction process, has unanimouslydetermined that the Offer is in the best interests of Underworld andUnderworld's shareholders, and unanimously recommends that Underworldshareholders tender their Common Shares to the Offer. The directors andsenior officers of Underworld will enter into customary lock-upagreements with Kinross to tender all of their Common Shares to theOffer.
- Underworld's key asset is the White Gold project, located inthe Tintina gold belt, approximately 95 km south of Dawson City, YukonTerritory, Canada.
Underworld Chairman Michael Williams commented, "The KinrossOffer brings substantial technical and financial resources to the WhiteGold property which will further rapidly advance the project. We feelthe Kinross offer provides immediate value to our shareholders."
Underworld's financial advisor Canaccord Financial Ltd. hasprovided an oral opinion to the Underworld Board of Directors that theconsideration offered is fair, from a financial point of view, toUnderworld's shareholders.
Full details of the offer will be included in the formal offerand take-over bid circular (the "Circular") to be mailed to Underworldshareholders shortly. The Offer will be open for acceptance for atleast 35 days following the commencement of the Offer. The Offer issubject to several conditions, including acceptance of the Offer by theholders of at least two-thirds of the outstanding Common Shares(calculated on a fully-diluted basis) and the receipt of all necessaryregulatory approvals. If Kinross acquires at least two-thirds of theoutstanding Common Shares, Kinross intends to take steps to acquire alloutstanding Common Shares not acquired pursuant to the Offer. If 100%of the Common Shares are tendered, Kinross will issue approximately 6.8million common shares pursuant to the transaction (based on thefully-diluted share capital of Underworld), representing approximately1.0% of Kinross' current outstanding common shares.
Underworld's legal counsel is DuMoulin Black LLP. Kinross'financial advisor is RBC Capital Markets, its strategic advisor is BMOCapital Markets, and its legal counsel is Osler, Hoskin & HarcourtLLP.
Underworld Resources is a well-structured junior explorationcompany that has defined a substantial new gold discovery in the Yukon.
ON BEHALF OF THE BOARD OF DIRECTORS
Adrian Fleming, President
Forward Looking Statement
Some of the statements contained in this press release areforward-looking statements. Forward-looking statements are nothistorical facts and are subject to a number of risks and uncertaintiesbeyond the Company's control, including, but not exclusively,statements regarding potential mineralization, exploration results,completion of work program and studies, and future plans and objectivesof the Company. Resource exploration, development and operations arehighly speculative, characterized by a number of significant risks,which even a combination of careful evaluation, experience andknowledge may not eliminate, including, among other things,unprofitable efforts resulting not only from the failure to discovermineral resources but from finding mineral deposits which, thoughpresent, are insufficient in quantity and quality to return a profitfrom production.
SOURCE: Underworld Resources Inc.
Underworld Resources Inc.
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