News
Vaaldiam Provides Update Regarding Previously Announced Unsolicited Take-Over Bid
TORONTO, ONTARIO--(Marketwire - Feb.16, 2010) - Vaaldiam Resources Ltd. (TSX:VAA) ("Vaaldiam") reports thatlate last week management of Vaaldiam had a conversation with Mr.Michael Bailey, the individual who on February 1, 2010 announced anunsolicited take-over bid for the common shares of Vaaldiam at a priceof US
.07 per share. During the conversation, Mr. Bailey indicatedthat, despite his February 1, 2010 announcement of the unsolicited bidfor Vaaldiam, he no longer had an intention of proceeding with a bidfor all of the shares of Vaaldiam, but that he would consider proposingsome type of investment and/or interim financing of Vaaldiam.
On February 12, 2010 Vaaldiam received a non-binding term sheet foran "equity line" investment and interim financing from 4543262 CanadaInc. ("Numberco"), a company of which Mr. Michael Bailey is President.The term sheet provides, among other things, that Numberco would committo subscribe for and purchase from treasury up to Cdn$10 million ofVaaldiam common shares on an as-needed by the Company basis over a 24month period at a price equal to a 5% discount to the market price ofVaaldiam's common shares at the time of a proposed draw down. However,a number of conditions would be required to be met in order forNumberco to advance the funds, including a requirement for ten arm'slength and non-arm's length shareholders of Vaaldiam to first agree tosell an aggregate of approximately 100 million freely tradeable commonshares of Vaaldiam to Numberco at 94% of market value and thereafteragree to loan the funds from such sales to Vaaldiam.
Vaaldiam's board of directors has reviewed the term sheet and haveunanimously rejected it based on, among other things, the fact that (i)such transaction does not contain commercially reasonable terms, (ii)such transaction could not be completed within the timing set forth inthe term sheet, if at all, (iii) on an informal canvassing of certainof the arm's length and non-arm's length shareholders referenced asvendors' of Vaaldiam shares, none of such shareholders were willing toentertain the proposed transaction, (iv) previous public disclosureregarding Mr. Bailey and Dunn Capital Partners, a group referenced inMr. Bailey's February 1, 2010 press release, gives Vaaldiam and itsboard serious concerns regarding the legitimacy of this proposal andMr. Bailey's ability to consummate any proposed transaction and (v)Vaaldiam's board of directors believes that the previously announcedtransaction (see Press Release dated January 18, 2010) whereby TiominResources Inc. ("Tiomin") would acquire, via a plan of arrangement, allof the outstanding common shares of Vaaldiam in an all-sharetransaction (the "Transaction") on the basis of 0.80 Tiomin commonshare for each Vaaldiam common share is a superior transaction to thatwhich is being proposed.
On or before February 22, 2010, Vaaldiam will be mailing itsmeeting materials in respect of the shareholder meeting to be held onMarch 15, 2010 to consider the Transaction. The Transaction wasapproved by the board of directors of Vaaldiam, following the unanimousrecommendation of its independent committee comprised solely ofindependent directors and the receipt of a fairness opinion from FraserMackenzie Limited, financial advisors to the independent committee,which provided that, subject to certain assumptions and limitations setout therein, the proposed Transaction is fair, from a financial pointof view, to the Vaaldiam shareholders. The board of directors ofVaaldiam recommends that holders of Vaaldiam shares vote in favour ofthe Transaction.
ABOUT VAALDIAM RESOURCES LTD.
Vaaldiam Resources Ltd. is a Canadian-based diamond mining andexploration company with two mines in Brazil and advanced-stageddiamond exploration projects in Brazil and Canada. For additionalinformation regarding Vaaldiam please visit www.vaaldiam.com, or contact Ken Johnson, President and CEO or Cintia Zanellato, Corporate Secretary, at (416) 363-6927.
This press release contains certain forward-looking statements. Incertain cases, forward-looking statements can be identified by the useof words such as "plans", "expects" or "does not anticipate", or"believes", or variations of such words and phrases or statements thatcertain actions, events or results "may", "could", "would", "might" or"will be taken", "occur" or "be achieved". Forward-looking statementsinvolve known and unknown risks, uncertainties and other factors whichmay cause the actual results, performance or achievements of theCompany to be materially different from any future results, performanceor achievements expressed or implied by the forward-looking statements.Such factors include, among others, risks related to internationaloperations; risks related to joint venture operations; actual resultsof current exploration activities; changes in project parameters asplans continue to be refined, future prices of resources; possiblevariations in reserves, grade or recovery rates, accidents, labourdisputes and other risks of the mining industry; and delays inobtaining governmental approvals or financing or in the completion ofdevelopment or construction activities. Although the Company hasattempted to identify important factors that could cause actualactions, events or results to differ materially from those described inforward-looking statements, there may be other factors that causeactions, events or results to differ from those anticipated, estimatedor intended. There can be no assurance that forward-looking statementswill prove to be accurate, as actual results and future events coulddiffer materially from those anticipated in such statements.Accordingly, readers should not place undue reliance on forward-lookingstatements.