IMG bought out TRR Iamgold to acquire Trelawney for $3.30 per share
2012-04-27 04:36 MT - News Release
See News Release (C-IMG) Iamgold Corp
Mr. Stephen Letwin of Iamgold reports
IAMGOLD EXPANDS GOLD PRODUCTION PIPELINE IN CANADA WITH ACQUISITION OF TRELAWNEY
Iamgold Corp. and Trelawney Mining and Exploration Inc. have entered into a definitive agreement whereby Iamgold will acquire, through a plan of arrangement, all of the issued and outstanding common shares of Trelawney. Trelawney is a Canadian junior mining and exploration company, focused on the development of the CAtAcopyright Lake Deposit located adjacent to the Swayze Greenstone Belt in northern Ontario.
Under the terms of the Agreement, each Trelawney shareholder will receive $3.30 in cash for each Trelawney share held. The transaction price represents a 36.6% premium based on Trelawney's 20-day volume weighted average price ("VWAP") for the period ending April 26, 2012.
"The acquisition of Trelawney creates a larger and more geographically balanced portfolio of long-life gold assets for Iamgold. This transaction provides an accretive return on invested capital as we are effectively redeploying the cash proceeds from the sale of non-core assets last year into a Canadian gold project that significantly strengthens our future gold production profile. This is consistent with our strategy to invest in development projects that we own and operate so we can derive maximum benefit from leveraging our operational and development expertise. Trelawney is an excellent strategic fit with our existing Canadian portfolio and we look forward to advancing this promising property," stated Stephen Letwin, President and Chief Executive Officer of Iamgold.
Trelawney's President and Chief Executive Officer Greg Gibson said, "Over the past three years, the Trelawney team has done a tremendous job in advancing the CAtAcopyright Lake Project to its current status. I want to take this opportunity to thank all Trelawney employees for their contributions to the discovery and advancement of CAtAcopyright Lake into a world class gold deposit. I am very proud of our success and the exceptional value that it has created for our shareholders. This acquisition will reward our shareholders with a significant premium that reflects this success."
Transaction Highlights
Offers Trelawney shareholders an immediate and attractive premium
Large NI 43-101 resource open along strike and at depth
Indicated resource of 0.93 million ounces of contained gold1
Inferred resource of 5.94 million ounces of contained gold1
Increases Iamgold's inferred resources by 95% and measured and indicated
resources by 5%
Attractive location in northern Ontario's highly prospective gold
producing region
Expands geographic footprint in one of the world's friendliest mining
jurisdictions
Provides a more geographically balanced portfolio, where Canada will
account for 35% of the resource base compared to 18% pre-acquisition2
Significant exploration/expansion potential near current resource
Large 516km2 land package
Step-out drilling continues to expand mineralization
Financial strength
Iamgold and Trelawney have strong balance sheets with minimal debt
Timing of the potential development allows project to be funded from
internal cash flow and available credit facilities
Aligned with strategy to continue growing dividend payout
All cash transaction provides significant gold resource leverage with no
dilution to Iamgold shareholders
Trelawney's main asset is the advanced exploration CAtAcopyright Lake Project, located in Ontario, Canada. On February 24, 2012, Trelawney announced an updated mineral resource estimate for CAtAcopyright Lake, comprising 35 million tonnes at 0.82 g/t gold for 0.93 million ounces of indicated resources and 204 million tonnes at 0.91 g/t gold for 5.94 million ounces of inferred resources. Mineralization at CAtAcopyright Lake has been intersected over a strike length of 1,200 metres, a horizontal width of 100 - 300 metres and a depth extent of more than 500 metres1.
Gordon Stothart, Executive Vice President and Chief Operating Officer of Iamgold stated, "This project has the potential to become a large bulk tonnage operation, with significant economies of scale at competitive cash costs. I'm excited to have this asset as part of our portfolio. We believe the project has the potential and scale to significantly contribute to our future production and growth profile."
Terms of the Transaction
For each common share of Trelawney, Iamgold will pay $3.30 in cash.
The fully diluted in the money value of the transaction is approximately
$608 million with an enterprise value of $505 million net of cash.
Represents a 36.6% premium based on Trelawney's 20-day VWAP for the
period ending April 26, 2012.
Completion of the transaction is subject to customary conditions,
including court approvals, a favourable vote of at least 66?% of the
holders of Trelawney common shares voted at a special meeting of
shareholders, and the receipt of all necessary regulatory approvals.
The definitive agreement includes a non-solicitation clause, right to
match covenants and provides for the payment of a $21 million break fee
to Iamgold under certain circumstances.
The transaction will be carried out via a plan of arrangement. Assuming
Trelawney shareholders approve the transaction at the special meeting
and final court approvals are obtained, the transaction is expected to
close by the end of June.
Shares held by Iamgold and shareholders who have agreed to voting
arrangements, including management and the Board of Directors,
represent approximately 13.3% of the current shares outstanding.
Board Recommendations
The transaction has been approved by the Board of Directors of Iamgold and the Board of Directors of Trelawney following the unanimous recommendation of a special committee comprising independent Trelawney directors. The Board of Directors of Trelawney recommends that holders of Trelawney shares vote in favour of the transaction. RBC Capital Markets has provided an opinion to the Trelawney Board of Directors that the consideration to be received by Trelawney shareholders under the transaction is fair, from a financial point of view, to the Trelawney shareholders.
Advisors
Iamgold's financial advisor is GMP Securities L.P. and its legal advisor is Fasken Martineau DuMoulin LLP.
Trelawney's financial advisor is RBC Capital Markets and its legal advisor is Stikeman Elliott LLP.
Conference Call and Webcast
Iamgold will hold a conference call and webcast to discuss the proposed acquisition on Friday, April 27, 2012 at 8:30 a.m. (Eastern Daylight Time). A webcast of the conference call will be available through the Company's website - www.Iamgold.com.
Conference Call Information: North America Toll-Free: 1-866-206-0240 or
International number: 1-646-216-7111, passcode: 34099898#.
A live and archived webcast will be available at Iamgold's website at www.Iamgold.com.
Iamgold and Trelawney shareholders and other interested parties are advised to read the materials relating to the proposed transaction that will be filed with securities regulatory authorities in Canada when they become available. Anyone may obtain copies of these documents when available free of charge at the Canadian Securities Administrators' website at www.sedar.com.
A replay of this conference call will be available from April 27 to May 27 2012. Access this replay by dialing: North America toll-free: 1-866-206-0173 or International number: 1-646-216-7204, passcode: 272107#.
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