Production & Exploration
The Company holds a dominant property position (+1,104 km2) in three of Canada's richest mining camps: Val-d‟Or and Rouyn-Noranda, in Abitibi District of Québec, historically the 3rd richest gold producing region in the world; and Snow Lake, Manitoba.
Message: Alexis Enters Binding Agreement to Acquire All Shares of Garson Gold Corp
| October 20, 2009 | |
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Alexis Minerals Corporation Enters Binding Agreement to Acquire All Shares of Garson Gold Corp.
Both Boards Unanimously Support Transaction |
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TORONTO, ONTARIO and VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 20, 2009) - NOT FOR ISSUE IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES Alexis Minerals Corporation (TSX:AMC) ("Alexis") and Garson Gold Corp. (TSX VENTURE:GG) ("Garson") jointly announce that they have entered into a definitive support agreement pursuant to which Alexis will offer to acquire (the "Offer") all of the outstanding common shares of Garson (the "Shares"), not currently held by Alexis in exchange for Alexis common shares. Alexis has agreed to offer shareholders of Garson, other than Alexis, (the "Shareholders") 0.29 of an Alexis common share for each Garson common share held. The consideration under the Offer is valued at $0.1325 and represents a 79.5% premium to Shareholders using the 20-day volume weighted average prices of both companies (Alexis: $0.4569, Garson: $0.0738) and a 41.9% premium using closing prices on October 19, 2009 (Alexis: $0.465, Garson: $0.095). The implied fully-diluted total equity value of Garson under the Offer is $33.2 million using 20-day volume weighted average prices. The net acquisition cost for Alexis, adjusted for historic purchases of shares and warrants, is $28.8 million. The Board of Directors of Garson, having received a recommendation from its special committee of independent directors (the "Special Committee"), has unanimously approved this transaction and will recommend that Shareholders tender to the Offer. The successful completion of this transaction will establish Alexis as a diversified junior Canadian gold company, well positioned to deliver near and long-term value to its shareholders through production growth and exploration upside. Alexis, upon completion of this transaction, will have the following profile: - Established production at Alexis' Lac Herbin Mine in Val d'Or, with
annual production of 35,000 - 40,000 ounces of gold
- Near-term production growth to 75,000 - 80,000 ounces of gold per year
through the addition of the Lac Pelletier Mine in Rouyn-Noranda,
expected to produce 10,000 ounces of gold in 2009, growing to 35,000 -
40,000 ounces in 2010
- Medium-term targeted production growth to 150,000 ounces of gold per
year with the addition of production at the New Britannia Gold Mine
("NBM") in Snow Lake, with a focus on the Main Mine and No. 3 Zone
(subject to completion of a positive feasibility study)
- Measured and Indicated Resources of 865,495 ounces of gold and Inferred
Resources of 479,627 ounces of gold, representing an increase of 108%
and 195%, respectively
- Two mills (Aurbel - 1,400 tpd capacity and NBM - 2,150 tpd capacity)
strategically located in highly prospective areas of significant
historic production, providing a platform for regional consolidation and
future production growth, including custom milling
- Excellent exploration potential within highly prospective land packages
in three world-class gold and base metal mining camps
- Clean balance sheet with minimal debt
- Strong management team with significant experience in exploration for
gold and base metals, and demonstrated abilities in the development and
construction of successful producing operations
David Rigg, President and CEO of Alexis, commented, "This acquisition more than doubles our current gold resources at an acquisition cost of approximately C$40 per ounce of gold. This acquisition cost is in line with the average cost of recent market acquisitions by peer group companies and well below our current trading multiple of approximately C$110 per ounce of gold. The acquisition complements our Quebec-based production, development and exploration assets and approach. Alexis will now be active in two best-of-class Canadian mining jurisdictions and will own significant mine and mill infrastructure providing for production opportunities with low estimated cost structures. Alexis is determined to achieve recognition as a mid-tier gold producer and our resources now support this objective. The potential to grow total gold production to above 150,000 ounces of gold per year in the medium-term will allow us to achieve this objective. Alexis remains unhedged, strongly leveraged to current high gold prices and has demonstrable growth potential in a period of positive market sentiment toward long-term gold prices. We believe that the similar gold and base metal characteristics of the Snow Lake, Rouyn-Noranda and Val d'Or areas provide significant exploration potential." David Tafel, CEO of Garson, commented, "Combining with the seasoned Alexis mining team will result in a well funded mining company capable of reactivating the New Britannia Gold Mine. Additionally, as a result of this transaction, Garson shareholders will participate in the upside potential of the Alexis mining and exploration projects. The Alexis offer has the full support of the Board of Directors and the Special Committee created has determined the offer to be fair and in the best interests of Garson shareholders." Historical production at NBM occurred from 1949 to 1958 and 1995 to 2005 and totaled 12.1 million tonnes at 4.23 g/t Au for 1.44 million ounces. For the period of 1997 to 2002, production at NBM averaged over 100,000 ounces of gold per year. The properties currently host Measured and Indicated Resources of 2.61 million tonnes at 5.7 g/t Au for 449,000 ounces and Inferred resources of 1.89 million tonnes at 5.2 g/t Au for 317,000 ounces. Near term production targets include the Main Mine and the No. 3 Zone, both of which are high grade deposits with exploration upside at depth and potentially along strike. In April 2009 Garson released the results of a Preliminary Assessment which evaluated the economics of restarting the New Britannia mill to mine and process ore from the No. 3 Zone on a small scale(1). The assessment was based on a three mine life with average annual production of 40,000 ounces of gold per year with processing occurring at a rate of 270,000 tonnes per year (approximately 35% of capacity). The study concluded that gold can be produced at NBM for less than US$400 per ounce with upside potential through mining and processing additional satellite deposits to increase the utilization of the mill. Alexis plans on conducting exploration during winter 2010 to focus on open pit targets (principally the Boundary Zone), other known zones with historic resources but no recent 43-101 reporting, and on structural targets identified across the property. Alexis also plans to advance a feasibility study on combined Zone 3 and Main Mine production. The feasibility is expected to be completed during Q2-2010. Summary of the Transaction The acquisition of Garson will be completed by way of a take-over bid whereby Alexis will offer to acquire each outstanding Garson common share (not currently held by Alexis) in exchange for 0.29 of an Alexis common share. In a press release dated September 10, 2009, Alexis disclosed that it currently holds 31,260,000 common shares and 13,500,000 warrants of Garson. In the event that Alexis acquires 100% of the currently outstanding shares it does not already hold, the combined company will be held approximately 74% by existing Alexis shareholders and 26% by existing Garson shareholders (on a basic basis). The total number of common shares outstanding will be approximately 199.7 million, on a pro forma basis. The Board of Directors of Garson has unanimously approved the offer and will recommend that Shareholders tender their shares to the bid. Garson has been granted the option to appoint one member to the Board of Alexis upon completion of the transaction. The Board of Directors of Alexis has also unanimously approved the Offer. Each senior officer and each member of the Board of Directors of Garson has agreed to tender their Shares to the Offer, which together represents approximately 2.2% of the Shares. In addition, Kinross Gold Corporation has agreed to tender its Shares in Garson to the Offer, representing approximately 7.7% of the Shares. A take-over bid circular containing the full details of the Offer (together with a Garson Board of Directors circular) and other related documents are expected to be mailed to Shareholders on or about October 30, 2009. Alexis has agreed to provide interim financial support to Garson through a loan of $500,000 to fund the ongoing work program at New Britannia and for general corporate purposes. The loan will bear interest at 10% per annum, payable quarterly in arrears. The principal amount of the loan will be due no later than one year from the date of the loan. Further details of the loan agreement will be included in the take-over bid circular. The Offer provides for, among other things, a non-solicitation covenant from Garson, Alexis' right to match any superior proposal for Garson, the payment to Garson of a termination fee of $800,000 under certain circumstances and the payment by each party to the other of a reimbursement of expenses of $250,000 under certain circumstances. The Offer is conditional on the deposit to the Offer of at least 66 2/3% of the outstanding Garson Shares, as well as receipt of any necessary regulatory approvals and satisfaction or waiver of other customary conditions. The Offer, unless extended, will expire 36 days after it begins. Alexis' financial advisor is Cormark Securities Inc. and its legal advisors are Cassels Brock & Blackwell LLP. Garson's financial advisor is Haywood Securities Inc. and its legal advisors are Fraser Milner Casgrain LLP and Du Moulin Black LLP. Haywood Securities Inc. has provided an oral opinion to the Special Committee that, subject to Haywood Securities' assumptions and limitations and its review and analysis of current market conditions, the consideration to be received by the Shareholders, other than Alexis and its affiliates or associates, pursuant to the Offer is fair, from a financial point of view. (1) NI 43-101 Technical Report Preliminary Assessment of the No. 3 Zone. Completed for Garson Gold Corp. by Micon International Ltd. May 30, 2009 Conference Call A conference call is scheduled for Tuesday, October 20, 2009 at 3:00 pm ET. Toronto Area, call-in number: (416) 340-8018 North American toll-free call-in number: 866-223-7781 A live audio webcast of the teleconference will also be available on Alexis' website at www.alexisminerals.com. Shareholders who have questions about the Offer can also contact Kingsdale Shareholder Services ("Kingsdale") at 1-866-481-2532. Kingsdale has been retained by Alexis to act as Information Agent for the Offer. About Alexis Minerals Corporation Alexis Minerals Corporation is a Canadian mining company listed on the Toronto Stock Exchange (symbol "AMC"). In Quebec, Alexis owns one producing gold mine in Val d'Or and is exploring and bulk sampling a second Mine in the Rouyn-Noranda area. Alexis expects to earn a 100% interest in the Lac Pelletier gold property in Rouyn-Noranda in 2010 upon a positive feasibility study. Alexis undertakes exploration in the mineral rich Val d'Or (100% ownership of 212 sq. km.) and Rouyn-Noranda Mining Camps (50% ownership of 785 sq.km and in joint venture with Xstrata Copper). Further information about Alexis Minerals can be found at its website: www.alexisminerals.com. About Garson Gold Corp. Garson Gold holds a 100% interest in The New Britannia Gold Mine (NBM) Project in Snow Lake Manitoba and the Copper Prince and the McMillan Gold Mine properties located in Ontario. Garson's flagship project is the NBM, which covers approximately 4,840 hectares and hosts the historic New Britannia Gold Mine which operated from 1949 to 1958 and again from 1995 to 2005 and produced approximately 1.44 million ounces of gold. The resource estimate at the NBM property, audited by Micon International Ltd. in accordance with CIM classifications pursuant to National Instrument 43-101, is available for viewing on SEDAR (www.sedar.com) and www.garsongold.ca. Infrastructure at the New Britannia Gold Mine includes a fully-permitted 2,150 tonne per day modern mill and tailings facility, and associated plant, and equipment. |
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