HALIFAX,
July 29, 2013 /CNW/ - Acadian Mining
Corporation (the "Company" or "Acadian") (TSXV: ADA) and LionGold
Corp. Ltd. ("LionGold") (Singapore: LIGO) today jointly announced
that they have entered into a definitive agreement (the
"Arrangement Agreement") pursuant to which LionGold has agreed to
acquire all of the issued and outstanding common shares of Acadian
("Acadian Shares") (other than the Acadian Shares it currently
owns) by way of a statutory Plan of Arrangement (the "Arrangement")
under the Canada
Business Corporations Act.
Under the Arrangement, shareholders of Acadian
will receive C$0.12 in cash for each
common share of Acadian, representing a premium of approximately
21% to the 20-day volume weighted average price of the Acadian
Shares on the TSX Venture Exchange as of July 26, 2013. The total consideration payable to
Acadian shareholders is approximately C$6.98 million. All options of the Company
outstanding as at July 22, 2013 were
out-of-the-money and were surrendered by the optionholders. The
Arrangement also provides for the payment by LionGold of the
C$420,000 aggregate principal amount
convertible unsecured debenture with accrued interest issued by the
Company in favour of Golden River
Resources Corporation on June 6,
2012, unless such convertible debenture is converted prior
to the effective time of the Arrangement, in which case
consideration will be received by the holder thereof as a
shareholder of the Company, and total consideration payable to
Acadian shareholders would accordingly be approximately
C$7.40 million.
The Company's Board of Directors, after
consultation with the Company's financial and legal advisors, and
based on the recommendation of a special committee of the Company's
Board of Directors, has unanimously determined that the Arrangement
is fair to Acadian's shareholders, other than LionGold, and will
recommend that Acadian's shareholders vote in favour of the
Arrangement. Paradigm Capital Inc., acting as financial advisor to
the Company and its Board of Directors, has provided an opinion
that, based upon and subject to the assumptions, limitations, and
qualifications in such opinion, the consideration to be received by
Acadian's shareholders is fair, from a financial point of view, to
Acadian shareholders, other than LionGold.
The Arrangement Agreement is subject to
customary representations, warranties and covenants of each of
Acadian and LionGold. In addition, Acadian has agreed that it will
not solicit or initiate discussions concerning the pursuit of any
other acquisition proposals except in respect of unsolicited
proposals that the Acadian Board of Directors in good faith
determines could reasonably be expected to result in a superior
proposal. In the event of a superior proposal, LionGold has the
right to either match such superior proposal or receive a
termination fee in the amount of C$300,000. In the event LionGold fails to pay the
acquisition consideration to Acadian shareholders, LionGold shall
be required to pay a fee in the amount of C$300,000 to the Company.
The terms and conditions of the Arrangement will
be summarized in the Company's management information circular
which will be filed and mailed to Acadian's shareholders in
September 2013. Shareholders will be
asked to approve the Arrangement at a meeting expected to be held
in October 2013.
The Arrangement will be subject, among other
things, to the approval of at least 66 2/3% of the votes cast by
Acadian shareholders on the basis of one vote per Acadian Share.
The Arrangement will also be subject to the approval of the TSX
Venture Exchange ("TSXV") and the Supreme Court of Nova Scotia. In addition, the Arrangement will
be subject to certain customary conditions and relevant regulatory
approvals. The transaction is expected to close by mid-October 2013.
In conjunction and concurrently with the
Arrangement Agreement, LionGold and Acadian have entered into an
unsecured convertible loan agreement pursuant to which LionGold has
agreed to provide Acadian with non-revolving term loans in the
aggregate principal amount of up to C$600,000, the proceeds of which are to be used
for purposes of working capital and for paying various transaction
fees and expenses to be incurred by Acadian in connection with the
Arrangement. The indebtedness under the convertible loan agreement
is in addition to the C$200,000
principal amount of previous advances made by LionGold to Acadian
for general working capital purposes and is convertible at the
option of Acadian into common shares of Acadian, but subject to the
approval of the TSXV, (i) any time after the termination of the
Arrangement Agreement, at a price per share equal to the greater of
the last closing price of the common shares of Acadian on the TSXV
immediately preceding the conversion date and the minimum price
permitted by the TSXV or (ii) in the event LionGold fails to pay
the acquisition consideration to Acadian shareholders or the
approval of at least 66 2/3% of the votes cast by Acadian
shareholders is not obtained and no termination fee is payable to
LionGold, five (5) business days following the termination of the
Arrangement Agreement, at a price per share equal to C$0.12.
LionGold currently owns 6,000,000 Acadian
Shares, which represents, assuming conversion of the convertible
debenture issued to Golden River
Resources Corporation, approximately 8.81% of the issued and
outstanding Acadian Shares on a fully diluted basis. Following
completion of the Arrangement, LionGold will own all of the issued
and outstanding Acadian Shares.
Advisors and Legal Counsel
Paradigm Capital Inc. is acting as financial
advisor to the Board of Directors of the Company and McInnes Cooper is acting as legal counsel to the
Company and its Board of Directors. The Montreal and the Hong Kong offices of Norton Rose Fulbright are acting as legal
counsel to LionGold.
About Acadian
Acadian is a Halifax,
Nova Scotia, based company with several gold projects
located in Atlantic Canada. The
Company also owns barite properties on Cape Breton Island, Nova Scotia. Acadian's
primary focus is centered on exploration and development of its two
core gold deposits, namely the Fifteen Mile Stream and Beaver Dam
Projects.
For additional information on Acadian's
properties and activities, please visit its web site at:
www.acadianmining.com.
About LionGold Corp Ltd
LionGold Corp Ltd is Singapore's first Main Board listed gold
company. LionGold has rapidly established itself in the global gold
mining industry. Since March 2012,
interests in seven gold exploration and mining companies have been
acquired, two of which are in production. Primary concessions are
currently in Australia,
Ghana and Bolivia. Future expansion will be achieved
through further acquisitions and organic growth. For more
information visit: www.liongoldcorp.com.
Forward-Looking Statements
Certain information contained in this news
release, including any information relating to the proposed
transaction (the "Transaction") and Acadian's future financial or
operating performance may be deemed "forward-looking". These
statements relate to future events or future performance and
reflect Acadian's expectations regarding the Transaction, and the
future growth, results of operations, business prospects and
opportunities of Acadian and the combined company. These
forward-looking statements also reflect Acadian's current internal
projections, expectations or beliefs and are based on information
currently available to Acadian, respectively. In some cases
forward-looking information can be identified by terminology such
as "may", "will", "should", "expect", "intend", "plan",
"anticipate", "believe", "estimate", "projects", "potential",
"scheduled", "forecast", "budget" or the negative of those terms or
other comparable terminology. Assumptions upon which such forward
looking information regarding completion of the Transaction is
based include that Acadian will be able to satisfy the conditions
to the Transaction, that the required approvals will be obtained
from the shareholders of Acadian, that all third party regulatory
and governmental approvals to the Transaction will be obtained and
all other conditions to completion of the Transaction will be
satisfied or waived. Although Acadian believes that the
expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will
prove to have been correct. Acadian cautions that actual
performance will be affected by a number of factors, many of which
are beyond Acadian's control, and that future events and results
may vary substantially from what Acadian currently foresees.
Accordingly, readers are cautioned against placing undue reliance
on forward-looking information. Acadian expressly disclaims any
intention or obligation to update or revise any forward-looking
information, whether as a result of new information, events or
otherwise, except in accordance with applicable securities
laws. Discussion of the various factors that may affect
future results is contained in Acadian's Annual Information Form
dated March 29, 2012, which
is available at www.SEDAR.com. Acadian's forward looking statements
are expressly qualified in their entirety by this cautionary
statement.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Acadian Mining Corporation