AM Gold, Capella agree to merge AM Gold Inc (C:AMG)
Shares Issued 54,360,193
Last Close 1/17/2011
.42
Tuesday January 18 2011 - News Release
Also Capella Resources Ltd (3) (C:KPS) News Release
Mr. Mark Lawson of AMG Gold reports
AM GOLD AND CAPELLA ENTER INTO LETTER OF INTENT TO COMBINE
AM Gold Inc. and Capella Resources Ltd. have entered into a binding letter of intent to combine the two companies by way of statutory plan of arrangement or other statutory procedure. The final terms of the transaction have not been reached and negotiations are continuing.
The transaction is subject to a number of conditions and approvals, including, but not limited to, satisfactory due diligence, settlement of a definitive agreement (the "Definitive Agreement"), shareholder approval required by applicable law or as otherwise determined by the respective Board of Directors, an order of the Supreme Court of British Columbia with respect to arrangement matters and approval of the TSX Venture Exchange.
Capella has agreed not to solicit or initiate any discussion concerning the pursuit of any other business combination for the term of the Letter of Intent which terminates on February 3, 2011 unless replaced by the Definitive Agreement. A termination fee of $250,000 is payable to AM Gold in certain circumstances. In addition, AM Gold has the right to match any competing proposal in the event a competing proposal is made.
There can be no assurance that the transaction will be completed as proposed or at all. The companies will use their best efforts to settle and execute the Definitive Agreement by February 3, 2011 (the "Definitive Agreement Execution Date") and to close the transaction within 90 days of the Definitive Agreement Execution Date.
Richard Bachman, President and CEO of Capella stated: "Combining with AM Gold will help unlock shareholder value in Capella's assets and I look forward to working with AM Gold's seasoned team."
"We are pleased with this development in the evolution of AM Gold and we look forward to working with Capella to build a combined company which will have a strong balance sheet, with a diverse portfolio of advanced exploration projects," remarked Mark Lawson, CFO of AM Gold. "Capella's assets in the Maricunga Gold District of northern Chile meet our corporate strategy of adding quality precious metals (gold) projects to our portfolio of exploration properties."