Kinbauri Gold Corp. Strongly Recommends that Shareholders Reject Orvana's Offer
09 Junho 2009 - 9:24AM
Marketwired
Kinbauri Gold Corp. (TSX VENTURE: KNB)(FRANKFURT: 3KG.DE)
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A conference call with Management and members of the Board will
be held on Tuesday June 9, 2009 at 10:30 a.m. EDT
Presentation available at www.kinbaurimaximized.com,
Call in number: 416-644-3424 or 1-800-732-0232
http://events.snwebcastcenter.com/kinbaurigold/20090609/
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Kinbauri Gold Corp. (TSX VENTURE: KNB)(FRANKFURT: 3KG.DE)
("Kinbauri") today announced that its Board of Directors has
unanimously recommended that Kinbauri shareholders REJECT the
unsolicited offer to purchase all of the outstanding Kinbauri
shares made by Orvana Minerals Corporation (TSX: ORV) ("Orvana") as
described in a take-over bid circular dated May 25, 2009, and that
shareholders NOT TENDER their Kinbauri shares to the Orvana offer.
The Board's recommendation, Kinbauri's Special Committee's
assessment of the Orvana offer and the reasons for the
recommendation to reject the Orvana offer are set out in a
Directors' Circular which has been mailed to Kinbauri shareholders
and may be viewed in its entirety on www.sedar.com and on
Kinbauri's newly launched website www.kinbaurimaximized.com.
"After a full and thorough review by our Board, our Special
Committee and our financial and legal advisors, our Directors were
unanimous in recommending rejection of the Orvana offer," said
Brian McEwen, Director and member of the Special Committee. "Our
Board believes the Orvana offer is inadequate and fails to reflect
the true value of Kinbauri and its flagship El Valle Project."
The Special Committee has initiated a process that it believes
should crystallize superior value for all shareholders. The strong
interest that has been expressed to date demonstrates that Kinbauri
has a superior asset and an excellent future. The Committee intends
to surface all expressions of interest and present shareholders
with a transaction that clearly maximizes shareholder value.
Kinbauri's Board of Directors cited the following reasons to
reject the offer:
- The Orvana offer significantly undervalues Kinbauri's advanced
stage El Valle Project, and its growth potential. A recent scoping
study assigned a net present value to the El Valle Project of $237
million - Orvana is offering only $33 million for the entire
company.
- The EL Valle Project is expected to begin production in 2010
with an anticipated annual output of approximately 145,000 of gold
equivalent ounces. The project is located in a highly prospective
gold region with many opportunities to expand our current resource
base. Orvana is pressuring Kinbauri shareholders to tender their
shares before we reach production and generate greater value for
our shareholders.
- The El Valle Project has infrastructure in place with a
replacement cost of over $100 million and an experienced mining
team on the ground in Spain. This team is familiar with the assets
and is skilled at advancing projects and operating mines. By
tendering to the Orvana offer you may forego significant value
upside.
- The Orvana offer is financially inadequate. Gryphon Partners
Canada Inc. has provided an opinion that, as of June 5, 2009, the
consideration under the Orvana offer is inadequate from a financial
point of view to Kinbauri's shareholders.
- The Orvana offer is conditional and not a firm offer.
- The Orvana offer is not a "Permitted Bid" under Kinbauri's
shareholder rights plan.
- Kinbauri's officers and directors are rejecting Orvana's
offer. None of Kinbauri's directors and officers will tender their
common shares to the Orvana offer. A major independent shareholder,
holding approximately 8 percent of the common shares outstanding,
has communicated to the Board that they will not tender their
shares to the Orvana offer.
If you agree with the Board's recommendation, you do not need to
take any action. For assistance in withdrawing any shares already
tendered, or other questions, please contact Laurel Hill Advisory
Group, the Information Agent retained by Kinbauri in connection
with the Orvana Offer, toll free at 1-888-812-9184 from anywhere in
Canada or the United States and collect at 416-637-4661 from
outside North America.
Kinbauri also announces today the launch of the website
www.kinbaurimaximized.com which provides presentations and
documents that explain why Kinbauri shareholders should reject the
inadequate hostile takeover bid from Orvana Minerals.
Note Regarding Forward-Looking Statements
This press release and other written or oral communication from
the Company may include certain statements that may be considered
"forward-looking statements" within the meaning of that phrase
under Canadian securities laws. Statements other than historical
facts that address possible future events, plans or developments
are forward-looking statements. Such statements may be identified
by the use of words such as "will", ""may", "expects", "estimate",
"intend" or the use of the future or conditional tense. Certain
material factors or assumptions were applied in drawing our
conclusions and making those forward-looking statements.
Forward-looking statements reflect management's current views with
respect to possible future events and conditions and, by their
nature, are based on management's beliefs and assumptions and
subject to known and unknown risks and uncertainties, both general
and specific to the Company. Although the Company believes the
expectations expressed in such forward-looking statements are
reasonable, such statements are not guarantees of future
performance and actual results or developments may differ
materially from those in our forward-looking statements. Readers
are cautioned that risks may change or new risks may emerge.
Additional information regarding the material factors and
assumptions that were applied in making these forward looking
statements as well as the various risks and uncertainties we face
are described in greater detail in the "Risk Factors" section of
our annual and interim Management's Discussion and Analysis of our
financial results and other continuous disclosure documents and
financial statements we file with the Canadian securities
regulatory authorities which are available at www.sedar.com and
available on the Company's website at www.kinbauri-gold.com. The
Company undertakes no obligation to update this forward-looking
information except as required by applicable law.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this news release.
Contacts: Kinbauri Gold Corporation Dr. Vern Rampton, P. Eng.,
President 613-836-2594 613-831-2730 (FAX)
vrampton@kinbauri-gold.com Barnes McInerney Inc. Daniel Weinerman
416-367-5000 ext. 248 dweinerman@barnesmcinerney.com
www.kinbauri-gold.com
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