North American Palladium Ltd (New) PALDF

North American Palladium to buy Cadiscor Resources

[odiram]

North American Palladium and Cadiscor Resources Announce Business Combination
31 Mar 2009 17:44 HE

Marketwire
North American Palladium Ltd.
March 31, 2009 - 05:43:57 PM
North American Palladium and Cadiscor Resources Announce Business Combination
TORONTO, ONTARIO--(Marketwire - March 31, 2009) - North American Palladium
Ltd. ("NAP") (TSX:PDL)(NYSE Alternext US:PAL)(NYSE Amex:PAL.A) and Cadiscor
Resources Inc. ("Cadiscor") (TSX VENTURE:CAO) today announced that they have
entered into a definitive agreement pursuant to which NAP will acquire by way
of a plan of arrangement all of the outstanding common shares of Cadiscor in
an all-share transaction, whereby Cadiscor shareholders will receive 0.33
common shares of NAP for each common share of Cadiscor (the "Exchange Ratio").
Based on the closing price of NAP's common shares on the TSX of $1.78 on March
31, 2009, the Exchange Ratio implies a value for each Cadiscor share of $0.59
and represents a premium of 47% to the closing price of Cadiscor's shares on
March 31, 2009, and a premium of 75% to the 20-day volume weighted average
trading price of Cadiscor's shares for the period ended March 31, 2009.
"The acquisition of Cadiscor is an important step in growing our precious
metals business by adding additional gold to our significant palladium
resources. Our acquisition focus will continue to be gold with the objective
of growing NAP to be a mid-tier precious metal producer operating in mining
friendly jurisdictions," said William Biggar, President and Chief Executive
Officer of NAP. "As experienced miners, NAP's expertise will assist Cadiscor
to fast-track the resumption of gold production at its Sleeping Giant mine in
the Abitibi region, and evaluate and advance its Discovery Project and other
prospective gold exploration properties in Quebec. The combination with
Cadiscor increases the attractiveness of NAP for investors seeking exposure to
multiple precious metals while minimizing currency and political risks."
Michel Bouchard, President and Chief Executive Officer of Cadiscor, stated:
"This transaction gives Cadiscor shareholders an attractive premium for their
shares, and significant upside to future increases in the price of palladium
and gold. NAP brings not only a strong balance sheet with the capital to
quickly restart the Sleeping Giant mine in 2009, but also mining personnel
with significant experience in developing and operating underground mines, a
large resource of over 3.7 million ounces of palladium at its mine in Thunder
Bay, and a highly liquid stock which will be a benefit to Cadiscor
shareholders."
Transaction Details
Under the terms of the transaction, shareholders of Cadiscor will receive 0.33
common shares of NAP for each common share of Cadiscor held. This will result
in NAP issuing approximately 14.3 million shares to Cadiscor shareholders, who
will own approximately 14% of NAP on completion of the transaction.
The transaction has been structured as a plan of arrangement under the Canada
Business Corporations Act, and is subject to approval by the shareholders of
Cadiscor and by applicable stock exchanges. The required shareholder approval
will be two-thirds of the votes cast by Cadiscor shareholders at a special
meeting to consider the transaction. The transaction has been structured to
allow Cadiscor shareholders to receive shares of NAP on a tax-deferred basis
for Canadian income tax purposes. Cadiscor expects to complete and mail to its
shareholders an information circular in late April and to hold the special
meeting in May 2009.
Holders of options, warrants and convertible debentures of Cadiscor will
continue to be entitled to exercise their securities for NAP shares in lieu of
Cadiscor shares, based on the Exchange Ratio.
The definitive agreement includes a commitment by Cadiscor not to solicit
alternative transactions. In certain circumstances, if Cadiscor terminates the
definitive agreement to enter into another transaction, then Cadiscor is
obligated to pay to NAP a termination payment of $1 million. NAP also has the
right to match competing offers that may be made to Cadiscor.

Cadiscor's board will have the right to nominate a director to join the board
of NAP following the closing of the transaction.
Coincident with the signing of the definitive agreement, NAP has advanced to
Cadiscor a total of $7.5 million, pursuant to the purchase of a $5.4 million,
12% convertible debenture, and a $2.1 million, 12% debenture, the proceeds of
which will be used by Cadiscor to bring the Sleeping Giant mine back into
production. Both debentures have a term of 18 months, and are secured by a
first charge on Cadiscor's assets. The convertible debenture is convertible
into Cadiscor common shares at $0.50 per share, which, on full conversion,
would constitute a 19.9% shareholding in Cadiscor.
The Board of Directors of Cadiscor is unanimously recommending approval of the
transaction by their shareholders. Cadiscor directors intend to vote their
shares in favour of the transaction.
NAP's financial advisor is Haywood Securities Inc. and its legal counsel is
Stikeman Elliott LLP. Cadiscor's financial advisor is Macquarie Capital
Markets Canada Ltd. and its legal counsel is Miller Thomson LLP.
About Cadiscor Resources
Cadiscor Resources is a gold exploration company with properties in the
Province of Quebec. Cadiscor's main asset is the Sleeping Giant underground
mine and milling facilities, situated about 80 kilometres north of Amos,
Quebec. A feasibility study released in October 2008 identified sufficient
mineral reserves to operate for 16 months at a rate of 52,000 ounces of gold
per year, and mineral resources that could potentially double the mine life.
The company's other significant asset is the Discovery Gold Project, located
70 kilometres from Sleeping Giant. A scoping study released in August 2008
demonstrated that the project could produce an average of 44,000 ounces of
gold over a 4-year mine life.
About North American Palladium
North American Palladium is a precious metals company that owns one of North
America's largest palladium mines, historically producing approximately 4% of
global palladium supply. The Company's palladium production at its Lac des
Iles mine is strengthened by a significant contribution from platinum, gold,
nickel and copper by-product metals.
The Lac des Iles mine was placed on temporary care and maintenance in October
2008 due to low metal prices. Prior to the temporary shutdown, the mine had
annual production of 270,000 ounces of palladium, 20,000 ounces of platinum
and 20,000 ounces of gold. The mine, which can be quickly restarted upon a
strengthening of metal prices, hosts in situ measured and indicated mineral
resources of 3.7 million ounces of palladium, 300,000 ounces of platinum and
250,000 ounces of gold, giving investors significant leverage to an increase
in commodity prices. The Company benefits from operating in a politically
stable jurisdiction with developed infrastructure and a history of innovation
and excellence in mining. Please visit www.napalladium.com for more
information.
Cautionary Statement on Forward-Looking Information
Certain information included in this press release, including any information
as to our future financial or operating performance and other statements that
express management's expectations or estimates of future performance,
constitute 'forward-looking statements' within the meaning of the 'safe
harbor' provisions of the United States Private Securities Litigation Reform
Act of 1995 and Canadian securities laws. The words 'expect', 'believe',
'will', 'intend', 'estimate' and similar expressions identify forward-looking
statements. Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by management, are
inherently subject to significant business, economic and competitive
uncertainties, risks and contingencies. The Company cautions the reader that
such forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause the actual financial results, performance or
achievements of North American Palladium to be materially different from the
Company's estimated future results, performance or achievements expressed or
implied by those forward-looking statements and that the forward-looking
statements are not guarantees of future performance. These statements are also
based on certain factors and assumptions. For more details on these estimates,
risks, assumptions and factors, see the Company's most recent Form 40-F/Annual
Information Form on file with the U.S. Securities and Exchange Commission and
Canadian provincial securities regulatory authorities. In addition, there can
be no assurance that the Company's acquisition of Cadiscor will be completed
or, if completed, that it will be successful, and there can be no assurance
that the Sleeping Giant mine will be successfully restarted or that Cadiscor's
other properties can be successfully developed. The Company disclaims any
obligation to update or revise any forward-looking statements, whether as a
result of new information, events or otherwise, except as expressly required
by law. Readers are cautioned not to put undue reliance on these
forward-looking statements.
FOR FURTHER INFORMATION PLEASE CONTACT:
North American Palladium Ltd. Bill Biggar President & Chief Executive Officer
[phone] [e-mail]
North American Palladium Ltd. Trent Mell Vice President, Corporate
Development [phone] Ext. 225 [e-mail] www.napalladium.com
Cadiscor Resources Inc. Michel Bouchard President [phone]
[e-mail]
Cadiscor Resources Inc. Linda Plante Investor Relations [phone]
[e-mail]