NEWS... .22 OfferHigh River Gold Enters Into Support Agreement With Severstal
TORONTO, ONTARIO, Jun 16, 2009 (MARKETWIRE via COMTEX News Network) --
The Board of High River Gold Mines Ltd. (TSX: HRG) ("High River" or the "Company") announced today that High River has entered into a support agreement (the "Support Agreement") with Lybica Holding B.V. ("Lybica"), an affiliate of ZAO Severstal Resources, the mining division of OAO Severstal ("Severstal"), in connection with the proposed acquisition by Severstal of all of the common shares (the "Common Shares") of High River. Under the terms of the Support Agreement, Lybica will offer to acquire, by way of a take-over bid, all of the issued and outstanding Common Shares (excluding the Common Shares currently controlled by Severstal) for cash at a price of C$0.22 per Common Share (the "Offer").
The Special Committee of the independent members of the Board of Directors of the Company have unanimously determined that the Offer is fair to minority shareholders and is in the best interests of the Company and Paradigm Capital Inc., acting as an independent appraiser, has provided a valuation and fairness opinion to the Special Committee that the consideration under the Offer is fair, from a financial point of view, to the Company's minority shareholders. Based on this conclusion, the Board of Directors (with Severstal nominees abstaining) unanimously recommends that shareholders accept the Offer.
The take-over bid circular, containing the full terms of the Offer, will be sent to the Company's shareholders, together with the directors' circular and other related documents in connection with the Offer, on or about June 22, 2009.
Severstal currently controls 312,771,130 Common Shares, representing approximately 53% of the outstanding Common Shares, and following completion of the previously announced private placement of 59,019,367 additional newly issued Common Shares, will control approximately 57.3% of the outstanding Shares.
The Offer is subject to certain conditions that are required to be satisfied prior to take-up and payment by Lybica; however, there is no minimum tender requirement.
High River may terminate the Support Agreement under certain circumstances, including if the Board of Directors determines in good faith that it has received a Superior Proposal (as such term is defined in the Support Agreement). If High River terminates the Support Agreement in order to accept a Superior Proposal, it must pay a break fee of C$1.7 million. Lybica will have the right to match any Superior Proposal within five business days of it being made.
About High River
High River is a gold company with interests in producing mines and advanced exploration projects in Burkina Faso and Russia.