It won't copy and paste properly, go to SEDAR to see full tables, etc,
Nova
EARLY WARNING REPORT FILED PURSUANT TO
NATIONAL INSTRUMENT 62-103
1. Name and Address of the Offeror:
Nord Gold N.V. (“Nordgold” or the “Offeror”)
Luna ArenA, Herikerbergweg 238
101 CM Amsterdam Zuidoost
The Netherlands
2. Designation and number or principal amount of securities and the Offeror’s
securityholding percentage in the class of securities of which the Offeror acquired
ownership or control in the transaction or occurrence giving rise to the obligation to
file this report, and whether it was ownership or control that was acquired in those
circumstances:
N/A
3. Designation and number or principal amount of securities and the Offeror’s
securityholding percentage in the class of securities immediately after the
transaction or occurrence giving rise to the reporting obligation:
As set out in item 7, below.
4. Designation and number or principal amount of securities and the percentage of
outstanding securities of the class of securities referred to in paragraph 3 over
which:
(i) the Offeror, either alone or together with any joint actors, has ownership
and control;
As set out in item 7, below.
(ii) the Offeror, either alone or together with any joint actors, has ownership but
control is held by other persons or companies other than the Offeror or any
joint actor; and
N/A
(iii) the Offeror, either alone or together with any joint actors, has exclusive or
shared control but does not have ownership.
N/A
5. The name of the market in which the transaction or occurrence that gave rise to the
reporting obligation took place:
N/A 6. The value, in Canadian dollars, of any consideration offered per security if the
Offeror acquired ownership of a security in the transaction or occurrence giving
rise to the reporting obligation:
N/A
7. Purpose of the Offeror and any joint actors in effecting the transaction or
occurrence that gave rise to the reporting obligation, including any future intention
to acquire ownership of, or control over, additional securities of the reporting
issuer:
On July 18, 2012, Nordgold announced that it intends to make an offer (the “Offer”) to
acquire the outstanding shares of High River Gold Mines Ltd. (“High River”, TSX:
HRG) (the “Common Shares”) not already owned by Nordgold and its affiliates.
Nordgold currently owns 630,627,472 Common Shares, constituting approximately 75.06
percent of High River Common Shares. Nordgold may also acquire Common Shares
outside the Offer pursuant to s. 93.1(2) of the Securities Act (Ontario) and parallel
provisions of other provincial securities laws.
In connection with the Offer, a news release was issued on July 18, 2012, which is
annexed hereto as Schedule “A”.
8. General nature and the material terms of any agreement, other than lending
arrangements, with respect to securities of the reporting issuer, entered into by the
Offeror, or any joint actor, and the issuer of the securities or any other entity in
connection with the transaction or occurrence giving rise to the reporting obligation,
including agreements with respect to the acquisition, holding, disposition or voting
of any of the securities:
N/A
9. Names of any joint actors in connection with the disclosure required herein:
N/A
10. In the case of a transaction or occurrence that did not take place on a stock
exchange or other market that represents a published market for the securities,
including an issuance from treasury, the nature and value, in Canadian dollars, of
the consideration paid by the Offeror:
N/A
11. If applicable, a description of any change in any material fact set out in a previous
report by the entity under the early warning requirements or Part 4 of National
Instrument 62-103 in respect of the reporting issuer's securities:
As set out in item 7, above. 12. If applicable, a description of the exemption from securities legislation being relied
on by the Offeror and the facts supporting that reliance:
N/A
DATED this 19
th
day of July, 2012
Nord Gold N.V.
By: “Nikolay Zelenskiy”
Name: Nikolay Zelenskiy
Title: Chief Executive Officer Schedule ANOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR
FROM THE UNITED STATES OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS IN THAT JURISDICTION. THIS PRESS
RELEASE IS NOT AN EXTENSION INTO THE UNITED STATES OF THE OFFER MENTIONED
BELOW AND IS NOT AN OFFER TO SELL SECURITIES OR THE SOLICITATION OF AN OFFER
TO BUY SECURITIES IN THE UNITED STATES. PLEASE SEE THE IMPORTANT NOTICE UNDER
"CAUTIONARY STATEMENTS" AT THE END OF THIS PRESS RELEASE.
FOR IMMEDIATE RELEASE
Nord Gold N.V.
Nord Gold N.V. Announces Intention to Make an Offer to Minority Shareholders of High River
Gold Mines Ltd.
Holders of Approximately 28% of Minority Shares Have Agreed to Tender their Shares in
Support of the Offer and Entered into Lock-Up Agreements
Amsterdam – July 18, 2012 – Nord Gold N.V. (“Nordgold” or the “Company”, LSE: NORD) is pleased
to announce that it intends to make an offer to acquire the outstanding shares of High River Gold Mines
Ltd. ("High River", TSX: HRG) not already owned by Nordgold and its affiliates. Nordgold currently
owns 630,627,472 High River shares, constituting approximately 75 percent of High River.
Under the terms of the proposed offer, eligible High River shareholders will have the right to elect to
receive either:
(i) 0.285 (the “Exchange Ratio”) Nordgold global depositary receipts (“GDRs”) for each High River
share held by them (the “GDR Offer”); or
(ii) C$1.40 in cash for each High River share held by them (the “Cash Alternative”, together with
the GDR Offer the “Offer”).
The GDR Offer represents a 17.2 percent premium based on Nordgold’s and High River’s respective
closing share prices on July 17, 2012, the last trading day before this announcement, a 20.2 percent
premium based on Nordgold’s and High River’s respective one month average share prices for the
period ended July 17, 2012, and a 30.6 percent premium based on Nordgold’s and High River’s
respective three month average share prices for the period ended July 17, 2012.
At Nordgold’s closing share price on July 17, 2012, the GDR Offer values High River at approximately
US$1.2 billion, or approximately 58 percent of the value of the fully consolidated Nordgold.
Nordgold has executed lock-up agreements with a number of substantial High River minority
shareholders, including three of the largest shareholders, as well as with former members of High River
executive management, under which they have all agreed to tender their High River shares and accept
the GDR Offer. The aggregate number of High River shares subject to the lock-ups is 58,050,206,
which represents approximately 28 percent of the High River shares not already owned by Nordgold
and its affiliates.
Nikolai Zelenski, Chief Executive Officer of Nordgold, commented:
“I am pleased to announce details of Nordgold’s proposed offer to High River. Completion of this
transaction will mark an important streamlining of our corporate structure and better position Nordgold
as one of the leading emerging market gold producers.NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES
Exchanging High River shares for Nordgold GDRs will enable High River shareholders to retain
exposure to High River’s asset base, whilst also benefiting from the stronger growth profile associated
with heritage Nordgold assets, in particular the Lefa mine, and the substantial reserve base at the
Gross development. High River shareholders will also have the opportunity to enjoy the benefit of an
anticipated improvement in liquidity and free-float in Nordgold GDRs, and the possibility of a substantial
rerating.”
Jefferies International Limited is acting as Financial Adviser and Corporate Broker to Nordgold, and
Troika Dialog is acting as Joint Financial Adviser to Nordgold.
DETAILS OF THE PROPOSED OFFER
The Offer will be subject to a number of customary conditions. The Offer will not be conditional on any
minimum number of High River shares being tendered.
Nordgold will fund the purchase of High River shares for which the Cash Alternative is elected using
existing cash resources.
Nordgold has requested that High River establish an independent committee of its board of directors to
evaluate the Offer and appoint an independent valuator to prepare a formal valuation of High River’s
shares, as required by Multilateral Instrument 61-101 – Protection of Minority Security Holders in
Special Transactions of the Ontario Securities Commission and the Québec Autorité des marchés
financiers.
Full details regarding the Offer will be included in the formal offer and take-over bid circular to be mailed
to eligible High River shareholders in accordance with applicable Canadian securities laws. Nordgold
expects to mail the offer and take-over bid circular to High River shareholders as soon as practical
following completion of the valuation.
The Offer is expected to remain open for acceptance for 35 days following the mailing of the offer and
take-over bid circular.
If within 120 days after the date of the Offer (or such longer time as a Canadian court may permit), the
Offer is accepted by High River shareholders who in aggregate hold not less than 90 percent of the
issued and outstanding High River shares (calculated on a fully-diluted basis at the expiry of the Offer),
excluding shares held at the date of the Offer by or on behalf of Nordgold, or an affiliate or associate of
Nordgold, Nordgold will, to the extent possible, seek to acquire those shares which remain outstanding
pursuant to a compulsory acquisition transaction.
If a compulsory acquisition is not available or Nordgold chooses not to proceed with a compulsory
acquisition, Nordgold intends to pursue other means of acquiring the remaining shares not tendered to
the Offer, including through a subsequent acquisition transaction. If Nordgold proposes a subsequent
acquisition transaction, Nordgold intends to cause the shares acquired under the Offer to be voted in
favour of such a subsequent acquisition transaction and, to the extent permitted by applicable laws, to
be counted as part of any minority approval that may be required in connection with such transaction.
The timing and details of such a subsequent acquisition transaction, if any, will necessarily depend on a
variety of factors, including the number of shares acquired pursuant to the Offer.
BENEFITS TO HIGH RIVER SHAREHOLDERS
Compelling Investment
? Nordgold management believes that Nordgold GDRs present considerable upside beyond that
offered by exposure solely to High River:NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES
o Diverse portfolio of high quality assets: Nordgold currently operates eight producing mines,
two development projects and five advanced exploration projects across four countries
o Rapid growth since inception: Nordgold has evolved into a leading internationally diversified
gold producer, enjoying historic compound annual growth rates since 2008 of 41% for
production and 69% for EBITDA, including acquisitions
o Larger resource base with longer mine lives: Recent update announced a 54% increase in
gold reserves and 30% increase in gold resources since June 2011
1
o Commitment to a progressive dividend plan: announced intention to distribute ca. 25% of
annual earnings
o World class board and management team: reflecting international best practices
Merits of the Proposed Transaction
Nordgold management believes that:
? The Exchange Ratio is set at a level to offer minority High River shareholders a substantial
premium to both the current share price and High River’s contribution to Nordgold’s reserves,
resources and production
? The transaction provides minority High River shareholders a significant position in fully consolidated
entity
High River contribution to total reserves
2
28.2%
High River contribution to total resources
2
31.3%
High River contribution to 2011 actual production 48.8%
High River value as % of fully consolidated entity at Exchange Ratio
3
58.4%
? The transaction will allow High River shareholders to benefit from longer mine lives and a more
substantial resource base
? The transaction will offer High River shareholders future production and earnings growth and the
benefit of Nordgold’s progressive dividend policy
? The transaction will enable High River shareholders to participate in combined and expanded
Nordgold free float
? There is rerating potential for the enlarged group with a longer term intention of becoming a FTSE
indexed, premium listed gold company
1
Nord Gold N.V. Reserves & Resources and Exploration Update, 24 April 2012
2
Based on mineral reserves and resources disclosed in Nord Gold N.V.’s Reserves & Resources and Exploration
Update, 24 April 2012, and in High River’s Updated Reserve and Resource Estimate, 16 April 2012. Please see
“CAUTIONARY STATEMENTS” for cautionary language regarding the calculation of the reserves and resources
and their aggregation.
3
Assuming the GDR Offer is accepted in fullNOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES
NORDGOLD SECOND QUARTER TRADING UPDATE
Summary
Gold production for the second quarter increased on Q1 by 6 percent, to 165.3 thousand gold
equivalent ounces (“koz”) (Q1 2012: 155.7 koz). The average realised gold price during the quarter
was US$1,602 per ounce (Q1 2012: US$1,689).
Gold production has increased at Lefa, Berezitovy, Neryungri and Aprelkovo over the previous quarter,
with small production falls at Taparko, Suzdal and Buryatzoloto. Nordgold has taken a number of
operational measures during the quarter to improve production at all mines, particularly at Taparko
mine, at which performance has been somewhat disappointing. Nordgold continues to make significant
progress across our asset portfolio and expects substantial growth in the second half.
On a mine-by-mine basis, key operational highlights are as follows:
? Taparko – Nordgold has ordered a new regrinding mill and two additional leach tanks for installation
in July 2012. Nordgold expects to achieve higher recoveries in H2 2012 as a result;
? Buryatzoloto – Nordgold is working on a new geological model which is expected to provide better
visibility on the ore body shapes and their grade distribution, and the model’s conclusion should be
available in H1 2013;
? Suzdal – Nordgold continues to optimise metallurgical processes, including flotation, CIL
reconfiguration and tailings leaching, to push recoveries towards the 70 percent level in H2;
? Lefa – after a maintenance shut-down of Nordgold’s SAG mill for part of May, the mill has been
working at elevated productivity of about 20,000 tonnes per day. A further increase in productivity
is expected when a new pebble crusher is installed in July. Nordgold also expects a considerable
improvement in head grade at Lefa during the second half due to new exploration results and
additional analysis on previously received data;
? Berezitovy – a secondary crusher and a new pinion were successfully installed in late May,
improving throughput levels. June production volumes reached record levels and Nordgold expects
to sustain these productivity levels in H2.
Refined gold production by mines
(1)
Operating results Q2 2012 (koz) Q1 2012 (koz) Change
Lefa 43.6 39.8 10%
Taparko 29.3 32.4 (9%)
Suzdal
(2)
18.7 19.1 (2%)
Buryatzoloto 30.2 31.6 (4%)
Berezitovy 25.5 20.3 26%
Neryungri 11.3 8.7 30%
Aprelkovo 6.6 3.8 75%
Nordgold 165.3 155.7 6%
(1) Including gold equivalent ounces of silver production
(2) Including refined gold from ZherekNOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES
Exploration and Development
Nordgold made good progress at Bissa and Gross during Q2. At Bissa, Nordgold has now received
half of the mining fleet on site, with the remainder expected in August. Plant construction is also
underway, with the mill arriving on schedule and mill foundations being completed during the quarter.
At Gross, the commissioned study is being finalized and is expected to be completed by the end of
summer 2012.
As noted in Nordgold’s Reserves & Resources and Exploration Update, dated 24 April 2012 this year, a
substantial upgrade to Nordgold’s resources was announced, with a considerable proportion being
attributable to Gross.
Production Guidance
As stated in the production report of 24 April 2012, several of the mines, including Taparko, Berezitovy
and Lefa, have experienced production bottlenecks in the first half of the year. While the Company has
been able to resolve most of the mine specific issues, such that the production profile of Nordgold in the
second half will significantly improve, the first half production bottlenecks will impact the full 2012
production volumes. As a result, Nordgold anticipates 2012 production to be in the range of 720 to 770
koz.
Nordgold will publish its full Q2 2012 operational results together with its financial results.
ABOUT NORDGOLD
Nordgold was established in 2007 as the gold producing division of OAO Severstal (“Severstal”) and
has since developed into a leading, internationally diversified gold producer, with a strategic focus on
emerging markets.
On January 19, 2012, Nordgold was spun-off from Severstal and commenced trading as an
independent public company via a listing of GDRs on the London Stock Exchange.
Nordgold has achieved rapid growth both organically and through acquisitions, increasing production
from approximately 21 koz in 2007 to 754 koz in 2011, a CAGR of 145 percent, including the effect of
acquisitions. In 2011, the Company produced half of its output outside Russia, highlighting the
Company's increasingly global footprint.
Nordgold now boasts a diverse portfolio of high quality producing assets. The Company's portfolio
consists of eight producing mines, two development projects, five advanced exploration projects and a
broad portfolio of early exploration projects and licences. The Company's operations are located in the
Russian Federation, Kazakhstan, Guinea and Burkina Faso.
The Company expects to maintain its strong growth profile, with a production target of over 1 moz from
its operating mines and development projects by 2013.
ABOUT HIGH RIVER
High River is an unhedged gold company with interests in producing mines, development and advanced
exploration projects in Russia and Burkina Faso. Two underground mines, Zun-Holba and Irokinda, are
situated in the Lake Baikal region of Russia. Two open pit gold mines, Berezitovy in Russia and
Taparko-Bouroum in Burkina Faso, are also in production. Finally, High River has a 90 percent interest
in a development project, the Bissa gold project in Burkina Faso, and a 50 percent interest in the NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES
advanced exploration Prognoz silver project in Russia. Nordgold currently holds an approximately 75
percent interest in High River and High River has been consolidated into Nordgold’s results of
operations since November 2008.
* * * * * *
For further information, please contact:
Nikolai Zelenski, Chief Executive Officer, Nordgold: +31 20 406 4480
Sergei Loktionov, Media Relations, Nordgold: +7 916 8001409
Peter Bacchus, Managing Director, Jefferies International Limited: +44 20 7029 8000
Peter Ogden, Partner, Maitland: +44 20 7379 5151
Alexander Chaychits, Senior Account Manager, Mikhailov and Partners: +7 915 1466418
CAUTIONARY STATEMENTS
This announcement may contain, in addition to historical information, certain forward-looking
statements including certain statements made under “BENEFITS TO HIGH RIVER SHAREHOLDERS”
and “NORDGOLD SECOND QUARTER TRADING UPDATE”. Often, but not always, forward looking
statements can be identified by the use of words such as “plans”, “expects”, “expected”, “scheduled”,
“estimates”, “intends”, “anticipates”, or “believes”, or variations of such words and phrases or state that
certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be
achieved. Such forward looking statements are subject to known and unknown risks, uncertainties and
other factors that could cause actual results, performance or achievements of High River or Nordgold to
differ materially from any future results, performance or achievements expressed or implied by such
forward looking statements, including the risk that all conditions of the offer will not be satisfied. Many
of these risks and uncertainties relate to factors that are beyond Nordgold’s ability to control or estimate
precisely, such as future market conditions, changes in regulatory environment and the behaviour of
other market participants. Nordgold cannot give any assurance that such forward-looking statements
will prove to have been correct. The reader is cautioned not to place undue reliance on these forwardlooking statements, which speak only as of the date of this announcement. Nordgold disclaims any
intention or obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by applicable law.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities
or a solicitation of any vote or approval. Such an offer may only be made pursuant to an offer and takeover bid circular filed with the securities regulatory authorities in Canada and pursuant to registration or
qualification under the securities laws of any other applicable jurisdiction. The distribution of this press
release in or into the United States or certain other jurisdictions may be restricted by law and therefore
persons into whose possession this press release comes should inform themselves about, and
observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the
securities law of any such jurisdiction.
This material is not a substitute for the offer and take-over bid circular Nordgold would file with the
securities regulatory authorities in Canada regarding the proposed transaction or for any other
document which Nordgold may file with securities regulators and send to Nordgold or High River
shareholders in connection with the proposed transaction. SECURITY HOLDERS OF NORDGOLD
AND HIGH RIVER ARE URGED TO READ ANY SUCH DOCUMENTS CAREFULLY IN THEIR
ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. If and when they become NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES
available to eligible viewers, the offer and take-over bid circular, along with any related documents, will
be available free of charge under the profile of High River on the website maintained by the Canadian
This press release may not be published, distributed, transmitted or otherwise sent into the United
States of America (including its territories and possessions, every State in the United States and the
District of Columbia). This press release does not constitute an extension into the United States of the
offer mentioned in this press release, nor does this press release constitute nor form part of an offer to
sell securities or the solicitation of an offer to buy securities in the United States. High River
shareholders in the United States or who are, or who are acting for the account or benefit of, a US
person (within the meaning of Regulation S under the U. S. Securities Act of 1933, as amended) will not
be eligible to participate in the offer described in this press release. Offer documents, including the offer
and take-over bid circular describing the terms of the offer and tender forms, when issued, will not be
distributed or sent into the United States.
Information contained in this announcement is not an offer, or an invitation to make offers, sell,
purchase, exchange or transfer any securities in the Russian Federation or to or for the benefit of any
Russian person, and does not constitute an advertisement or offering to non-qualified investors of any
securities in the Russian Federation. The GDRs have not been and will not be registered in the
Russian Federation or admitted to public placement and/or public circulation in the Russian Federation.
The GDRs are not intended for “placement” or “circulation” in the Russian Federation unless and to the
extent permitted under Russian law.
Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial
performance of Nordgold or High River unless otherwise stated.
Certain of the reserve and resource data above has been calculated in accordance with the
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared
by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian
Institute of Geoscientists and Minerals Council of Australia (JORC Code), and certain other data
relating to some assets owned by High River has been calculated in accordance with the standards
developed by the Canadian Institute of Mining, Metallurgy and Petroleum as the CIM Definition
Standards on Mineral Resources and Mineral Reserves adopted by CIM Council (CIM Standards).
Reserves and resources calculated in accordance with JORC are not equivalent to, and may not be
comparable with, reserves and resources calculated in accordance with CIM Standards. There can be
no assurance that reserves and resource calculated in accordance with JORC or CIM Standards would
not be materially different were they calculated in accordance with different standards. In addition, the
Group's stated mineral reserves and resources are only estimates based on a range of assumptions
that may be affected by may be affected by mining, environmental, processing, permitting, taxation,
socio-economic and other factors, and there can be no assurance that the anticipated tonnages or
grades will be achieved. Notwithstanding the foregoing, for illustrative purposes this data has been
aggregated.
A copy of this announcement will be made available to eligible viewers on the Company's website
www.nordgold.com. For the avoidance of doubt, the content of the website referred to above is not
incorporated into and does not form part of this announcement.
Jefferies International Limited is authorised and regulated by the Financial Services Authority. Jefferies
International is acting exclusively for Nordgold and no one else in connection with the matters described
in this announcement and will not be responsible to anyone other than Nordgold for providing the
protections afforded to clients of Jefferies International, or for providing advice in connection with the
matters referred to in this announcement.
None of Jefferies International Limited or any of its respective directors, officers, employees, advisers or
agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES
express or implied, as to the truth, accuracy or completeness of, the information in this press release (or
whether any information has been omitted from the announcement) or any other information relating to
the Offer, its subsidiaries or associated companies, whether written, oral or in a visual or electronic
form, and howsoever transmitted or made available or for any loss howsoever arising from any use of
the announcement or its contents or otherwise arising in connection therewith.
Troika Dialog is acting exclusively for Nordgold and no-one else in connection with the Offer. Troika
Dialog will not regard any other person as its client in relation to the Offer and will not be responsible to
anyone other than the company for providing the protections afforded to their respective clients, nor for
providing advice in relation to the Offer, the contents of this announcement or any transaction,
arrangement or other matter referred to herein.
None of Troika Dialog or any of its respective directors, officers, employees, advisers or agents accepts
any responsibility or liability whatsoever for, or makes any representation or warranty, express or
implied, as to the truth, accuracy or completeness of, the information in this press release (or whether
any information has been omitted from the announcement) or any other information relating to the Offer,
its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and
howsoever transmitted or made available or for any loss howsoever arising from any use of the
announcement or its contents or otherwise arising in connection therewith.