VANCOUVER, June 30, 2015 /PRNewswire/ - Red Eagle
Mining Corporation (TSX-V: RD, OTCQX: RDEMF, SSE-V: RDCL) today
announced that it has formally commenced its share exchange
takeover bid (the "Offer") to acquire all of the issued and
outstanding shares of CB Gold Inc. ("CB Gold") in exchange
for shares of Red Eagle Mining. Under the terms of the Offer,
each CB Gold common share ("Share") will be exchanged for
0.162 of a Red Eagle Mining common share with an implied value of
$0.05 per CB Gold Share and an
implied total offer value for all outstanding CB Gold Shares of
approximately $8,400,000 based on Red
Eagle Mining's 20-day volume weighted average share price
("VWAP") of $0.31. The
Offer will remain open until 4:00PM
(Toronto time) on August 5, 2015 ("Expiry Time"), unless
withdrawn or extended.
The Offer represents a premium of 46% to CB Gold's 20-day VWAP
of $0.035 and to CB Gold's closing
Share price of $0.035 on June 12, 2015, the last trading day prior to CB
Gold's announcement of Red Eagle Mining's proposal.
"Following the announcement by CB Gold of the OM.L Transaction,
Red Eagle Mining was contacted by several of CB Gold's largest
shareholders. They were unhappy with the proposed sale of CB
Gold's principal asset and this transaction was subsequently
rejected by CB Gold's shareholders. All of Red Eagle Mining's
overtures have been rebuffed with the only response being via CB
Gold's press releases. As a result, we are presenting our
proposal directly to CB Gold shareholders." comments Ian Slater, Chief Executive Officer. "We
believe that the Offer represents a clearly superior alternative
for CB Gold shareholders."
Reasons to Accept the Red Eagle Mining Offer
- Significant Premium - The Offer represents a premium of
46% to CB Gold's 20-day VWAP of $0.035 and CB's closing share price of
$0.035 on June
12, 2015, the last trading day prior to CB Gold's
announcement of Red Eagle Mining's proposal;
- Gold Development Company Exposure - Participation in Red
Eagle Mining's flagship project, the 100% owned, fully permitted
Santa Rosa Gold Project in Colombia which is expected to be in production
during 2016;
- Vetas Exposure - Continued participation in CB Gold's
Vetas Project;
- Colombian Experience - Red Eagle Mining's proven
experience in permitting, financing and developing underground gold
projects in Colombia; and
- Superior Financial Capacity - Red Eagle Mining's
stronger financial capacity and institutional shareholder base,
including 19.9% shareholders Liberty Metals & Mining Holdings
LLC and Orion Mine Finance.
About the Red Eagle Mining Offer
The Offer is for all of the issued and outstanding Shares of CB
Gold, including any CB Gold Shares that may become issued and
outstanding upon the exercise of existing CB Gold convertible
securities, and will be open for acceptance for 35 days, unless
extended or withdrawn. The Offer is subject to certain customary
conditions including the deposit under the Offer of CB Gold Shares
representing not less than 51% of CB Gold Shares, receipt of all
necessary regulatory approvals, no material adverse change in CB
Gold, CB Gold's shareholder rights plan being waived, invalidated,
or cease-traded and the proposed non-brokered private placement of
CB Gold Shares for gross proceeds of up to $3,500,000 (the "Private Placement")
having been invalidated, terminated or cease traded. The Offer will
not be subject to the approval of Red Eagle Mining's shareholders
and is not subject to any financing or due diligence
conditions.
The full details of the Offer are set out in a takeover bid
circular ("Circular") and accompanying offer documents
(collectively the "Offer Documents"), which Red Eagle Mining
has filed with Canadian securities regulatory authorities on SEDAR
and will mail to CB Gold's shareholders. CB Gold shareholders
are encouraged to carefully review the Offer and Circular, which
contains the full terms and conditions of the Offer as well as
detailed instructions on how to tender their common shares to the
Offer.
This press release does not constitute an offer to buy or an
invitation to sell, or the solicitation of an offer to buy or
invitation to sell, any securities of Red Eagle Mining or CB
Gold. Such an offer may only be made pursuant to an offer and
takeover bid circular filed with the securities regulatory
authorities in Canada and pursuant
to registration or qualification under the securities laws of any
other such jurisdiction.
Proposed CB Gold Dilutive Financing
On May 19, 2015, CB Gold announced
that it had entered into a definitive share purchase agreement with
OM.L Trading Inc. to acquire 100% of the shares in Leyhat
Corporation, CB Gold's wholly-owned subsidiary which holds CB
Gold's interests in its Colombian properties (the "OM.L
Transaction"). The OM.L Transaction was subject to
shareholder approval, which was sought at CB Gold's Annual and
Special Meeting (the "Shareholders' Meeting") scheduled for
June 23, 2015. The deadline for
submission of proxies in respect of the Shareholders' Meeting was
set at 10:00 a.m. on June 19, 2015. Following receipt of all
proxies for the Shareholders' Meeting, on June 22, 2015 CB Gold announced its intent to
complete a $3,500,000 Private
Placement. No pricing or definitive terms were announced at
that time. On the following day, June
23, 2015, at the Shareholders' Meeting, 66% of disinterested
shareholders voted against the OM.L Transaction, contrary to CB
Gold's management recommendation. On June 24, 2015, CB Gold announced that the Private
Placement would be priced at $0.05
per CB Gold Share and that the same related party that was
frustrated in acquiring CB Gold's primary asset a day earlier,
would be leading the Private Placement.
Red Eagle Mining has applied to the British Columbia Securities
Commission (the "Commission") seeking an order cease trading
any securities issued under the Private Placement (the "Cease
Trade Application"). The Cease Trade Application was made
on the basis that the Private Placement is a dilutive transaction
designed to frustrate the ability of shareholders to consider Red
Eagle Mining's Offer, and as such is an improper defensive tactic
contrary to the public interest. Despite CB Gold's
objections, the Commission decided that it would hear the Cease
Trade Application and scheduled the hearing for July 3, 2015.
How to Tender Shares to the Offer
All questions regarding the Offer and how to tender CB Gold
Shares should be directed to the Information Agent, Laurel Hill
Advisory Group at +1 877 452 7184 (North American Toll-Free) or +1
416 304 0211 (Collect Calls) or by email at
assistance@laurelhill.com. Shareholders who wish to accept
the Offer may do so before the Expiry Time by delivering to
Computershare (the "Depositary") (a) certificates
representing the CB Gold shares to be tendered, (b) a property
completed and executed letter of transmittal (the "Letter of
Transmittal") or a manually executed facsimile, and (c) any
other documents required by the instructions set out in the Letter
of Transmittal or Circular. The Letter of Transmittal will
accompany the Offer and Circular, and will specify the offices of
the Depositary at which valid deposits under the Offer may be
made. Alternatively, shareholders may follow the procedure
for guaranteed delivery using a notice of guaranteed delivery, as
described in the Offer and Circular. Shareholders whose CB
Gold Shares are registered in the name of an investment dealer,
stockbroker, bank, trust company or other nominee should contact
that nominee for assistance if they wish to accept the Offer.
Advisors
Red Eagle Mining has engaged National Bank Financial Inc. as its
financial advisor and Farris Vaughan
Wills & Murphy LLP as its legal counsel in respect of
the Offer.
About Red Eagle Mining
Red Eagle Mining is a well-financed gold exploration and
development company with an experienced mine-development
team. Management is focused on building shareholder value
through discovering and developing gold projects with low costs and
low technical risks in Colombia, a
jurisdiction with prolific historic production but until recently
limited modern exploration. Red Eagle Mining is developing
the 100 km² historic Santa Rosa Gold Project located in the
Antioquia Batholith. Development will initially commence with
the fully permitted San Ramon Gold Mine where a positive
Feasibility Study supports project development. Construction
is scheduled to commence in 2015 with production in 2016.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release. This news release includes
forward-looking statements that are subject to risks and
uncertainties. All statements within, other than statements
of historical fact, are to be considered forward looking.
Although the Company believes the expectations expressed in
such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future
performance and actual results or developments may differ
materially from those in forward-looking statements. Factors
that could cause actual results to differ materially from those in
forward-looking statements include market prices, exploitation and
exploration successes, continued availability of capital and
financing, and general economic, market or business conditions.
There can be no assurances that such statements will prove
accurate and, therefore, readers are advised to rely on their own
evaluation of such uncertainties. We do not assume any
obligation to update any forward-looking statements. This news
release does not constitute an offer to sell or a solicitation of
an offer to sell any securities in the United States. The
securities have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act") or any state securities laws and may not be
offered or sold within the United
States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
SOURCE Red Eagle Mining Corporation
