Kinbauri Gold Corp. Announces Business Combination With ATW Gold
TORONTO, ONTARIO--(Marketwire - July 14, 2009) - Kinbauri Gold Corp.
(TSX VENTURE: KNB)(FRANKFURT: 3KG.DE)
A conference call will be held on Tuesday July 14, 2009 at 1:00 p.m.
Presentation available at
Greater Toronto - 416 644 3424
Toll-Free (North America) - 800 732 0232
Toll-Free (UK, France, Germany, Switzerland, Spain) - 00 800 2288
Toll-Free (Australia) - 0011 800 2288 3501
Toronto: 416-640-1917 Passcode: 21310993#
Toll-Free: 877-289-8525 Passcode: 21310993#
Kinbauri Gold Corp. (TSX VENTURE: KNB)(FRANKFURT: 3KG.DE)
("Kinbauri") announced today that it has signed a binding letter
agreement dated July 12, 2009, with ATW Gold Corp. (TSX VENTURE: ATW)
("ATW") to combine the two companies at the agreed exchange ratio of
1.35 ATW shares per Kinbauri share, which implies a purchase price of
C$0.85 per Kinbauri share using closing share prices on July 10, 2009
(the "ATW Transaction").
The ATW Transaction represents a premium of 55% over the closing
price of Kinbauri shares on July 10, 2009 and a premium of 115% over
the closing price of Kinbauri shares on May 8, 2009, the last trading
day prior to the announcement by Orvana Minerals Corp. (TSX: ORV)
("Orvana") of its intention to make an unsolicited offer of C$0.55
On June 9, 2009, Kinbauri's Board of Directors unanimously
recommended that Kinbauri shareholders REJECT the unsolicited offer
to purchase all of the outstanding Kinbauri shares made by Orvana as
described in a take-over bid circular dated May 25, 2009.
Brian McEwen, Director of Kinbauri and member of its Special
Committee, stated, "The ATW Transaction delivers significant value to
Kinbauri shareholders and to Kinbauri's flagship El Valle Project and
we recommend that all shareholders join us in supporting the
The Kinbauri Board of Directors has unanimously recommended that
Kinbauri shareholders vote in favour of the ATW Transaction and
continue to reject the Orvana offer. The combination of Kinbauri and
ATW would move ATW closer to its goal of becoming a mid-tier gold
producer. It would also feature;
- Diversified operations with significant reserve/resource upside in
three producing or close to producing gold mines. The assets have
significant infrastructure already in place, and are located in
geopolitically and mining friendly jurisdictions;
- Management from both ATW and Kinbauri with their extensive combined
mine operating, development, financing and exploration experience,
including Graham Harris as Executive Chairman, Brent Butler as CEO
and Brian McEwen as President; and
- Strategic position and management experience to leverage continued
consolidation in the gold industry.
"We understand that higher offers for the Kinbauri assets were being
entertained and therefore our efforts were directed towards
expediting a friendly transaction that would benefit both shareholder
groups. Our merger with Kinbauri brings ATW closer to its stated goal
of becoming a leading mid-tier gold producer." said Graham Harris,
Executive Chairman of ATW. "We are pleased to combine ATW's strong
foundation of professionals, with experience bringing our Burnakura
mine into production, with Kinbauri's team."
Upon completion of the ATW Transaction, ATW will have approximately
149,691,086 common shares issued and outstanding, with former
Kinbauri shareholders holding approximately 53.5% of the issued and
outstanding common shares of the combined company."
ATW Transaction Details
The ATW Transaction is expected to be structured as a plan of
arrangement between Kinbauri and a newly formed, wholly-owned
subsidiary of ATW. Under the terms of the ATW Transaction, Kinbauri
shareholders will receive 1.35 common shares of ATW per common share
of Kinbauri held. Each outstanding Kinbauri convertible security will
become exercisable for ATW common shares based on the exchange ratio
and resulting price adjustment. Two Kinbauri directors, Brian McEwen
and Marilyn Bloovol, will join the ATW Board of Directors. Brian
McEwen will also be appointed President of ATW and President of
Kinbauri Espana. The ATW Transaction will be subject to approval of
the shareholders of Kinbauri and ATW.
Gryphon Partners, acting as financial advisor to the Special
Committee of the Board of Directors of Kinbauri, has provided an
opinion that the ATW offer is fair, from a financial point of view,
to Kinbauri shareholders.
The letter agreement setting out the ATW Transaction includes a
commitment by Kinbauri not to solicit alternative transactions to the
proposed ATW Transaction and to enter into a definitive arrangement
agreement. ATW has also been provided with certain other rights
customary for a transaction of this nature, including the right to
match competing offers made to Kinbauri. The letter agreement also
provides for a break fee of approximately $1 million to be payable to
ATW in certain circumstances.
Completion of the ATW Transaction is subject to a number of
conditions, including: the receipt of all necessary regulatory and
court approvals (including the approval of the TSXV) and obtaining
approvals from the shareholders of ATW and Kinbauri at meetings to be
held no later than September 25, 2009. There can be no assurance that
the ATW Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management
information circular to be prepared in connection with the ATW
Transaction, any information released or received with respect to the
ATW Transaction may not be accurate or complete and should not be
relied upon. Trading in the securities of Kinbauri should be
considered highly speculative.
Gryphon Partners is the financial advisor to Kinbauri's Special
Committee and its legal advisor is Wildeboer Dellelce LLP. ATW's
financial advisor is PI Financial Corp. and its legal counsel is CD
Farber Law Group.
All information contained in this new release with respect to ATW was
supplied by ATW for inclusion herein, and with respect to such
information, Kinbauri and its board of directors and officers have
relied on ATW.
ATW is a gold producer and developer, with two gold mines in Western
Australia and is listed on Tier 1 of the TSX Venture Exchange
("TSXV") (TSX VENTURE: ATW). ATW's corporate goal is to build a
mid-tier gold producer.
ATW is incorporated under the Business Corporations Act (British
Columbia) and was listed on the TSXV in November 2006 via an initial
public offering. ATW made its first mining acquisition, the Burnakura
Gold Mine, in December 2007. Within 15 months, Burnakura was
recommissioned, permitted and gold production commenced. During that
time, six months after the Burnakura acquisition, ATW acquired its
second mine, the Gullewa Gold Mine. The Gullewa Mine, a
past-producing mine, is ATW's flagship project. ATW is conducting
further exploration and other work with the goal of commencing
production from the Gullewa Mine in 12 to 15 months. ATW's team is
comprised of Mine Engineers, Geologists and finance experts, with
over 100 years of combined experience in the mining industry having
Shareholders do not have to take any action on the Orvana offer and
the Kinbauri Board urges you to reject it and vote in favour of the
For assistance in withdrawing any shares already tendered, or other
questions, please contact Laurel Hill Advisory Group, the Information
Agent retained by Kinbauri in connection with the Orvana Offer, toll
free at 1-888-812-9184 from anywhere in Canada or the United States
and collect at 416-637-4661 from outside North America.
Note Regarding Forward-Looking Statements
This press release and other written or oral communication from the
Company may include certain statements that may be considered
"forward-looking statements" within the meaning of that phrase under
Canadian securities laws. Statements other than historical facts that
address possible future events, plans or developments are
forward-looking statements. Such statements may be identified by the
use of words such as "will", ""may", "expects", "estimate", "intend"
or the use of the future or conditional tense. Certain material
factors or assumptions were applied in drawing our conclusions and
making those forward-looking statements. Forward-looking statements
reflect management's current views with respect to possible future
events and conditions and, by their nature, are based on management's
beliefs and assumptions and subject to known and unknown risks and
uncertainties, both general and specific to the Company. Although the
Company believes the expectations expressed in such forward-looking
statements are reasonable, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those in our forward-looking statements. Readers are
cautioned that risks may change or new risks may emerge. Additional
information regarding the material factors and assumptions that were
applied in making these forward looking statements as well as the
various risks and uncertainties we face are described in greater
detail in the "Risk Factors" section of our annual and interim
Management's Discussion and Analysis of our financial results and
other continuous disclosure documents and financial statements we
file with the Canadian securities regulatory authorities which are
available at www.sedar.com and available on the Company's website at
www.kinbauri-gold.com. The Company undertakes no obligation to update
this forward-looking information except as required by applicable
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
Kinbauri Gold Corp.
Darrell Munro, BB.A, LL.B, Manager,
Kinbauri Gold Corp.
Brian McEwen, P Geol., Director
Barnes McInerney Inc.
416-367-5000 ext. 244
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.