Gold Wheaton closes FNX deal, begins trading on TSX-V

2008-07-15 20:18 ET - News Release

Mr. David Cohen reports

GOLD WHEATON COMPLETES FNX TRANSACTION

Gold Wheaton Gold Corp. (formerly known as Kadywood Capital Corp.) has completed its previously announced transaction with FNX Mining Company Inc. Pursuant to the FNX transaction, Gold Wheaton agreed to purchase 50 per cent of the contained gold, platinum and palladium in ore mined and shipped from certain of the existing mining operations wholly owned by FNX located in Northern Ontario for an upfront payment of $400-million, comprising $175-million in cash, 350 million Gold Wheaton common shares, and a deferred payment of $50-million in Gold Wheaton warrants, shares or cash, to be satisfied in six months, plus a payment of the lesser of $400 (U.S.) per gold equivalent ounce purchased, subject to adjustment, and the then-prevailing market price per ounce of gold. The common shares of Gold Wheaton issued to FNX are subject to a statutory hold period which expires on Nov. 16, 2008. They are also subject to escrow pursuant to the policies of the TSX Venture Exchange, 87.5 million shares being released immediately upon closing of the FNX transaction and the balance of 262.5 million shares to be released in equal instalments of 87.5 million in six, 12 and 18 months.

The gross proceeds of $260-million raised in connection with the private placement of Gold Wheaton subscription receipts, completed on July 8, 2008, and arranged through a syndicate of agents that included Paradigm Capital Inc., as lead agent, together with Canaccord Capital Corporation and GMP Securities LP, as co-bookrunners, and including BMO Capital Markets and Brant Securities Limited, were released from escrow upon completion of the FNX transaction. The $175-million cash payment made by Gold Wheaton in connection with the FNX transaction was financed from the proceeds of the private placement of subscription receipts. The remaining proceeds will be used to partially finance the previously announced Redcorp transaction and for working capital purposes. Each of the 520 million outstanding subscription receipts will be automatically exercised on July 21, 2008, without payment of additional consideration, into one common share and one-half of one common share purchase warrant of Gold Wheaton. Each whole warrant is exercisable into one common share of Gold Wheaton at a price of $1 until July 8, 2013. These securities are all subject to a statutory hold period which expires on Nov. 9, 2008.

Upon closing of the FNX transaction, David Cohen, Frank Giustra, Terry MacGibbon and Francesco Aquilini were appointed as the new directors of Gold Wheaton, two of whom are independent and unrelated directors. Mr. Cohen was appointed as chairman and chief executive officer of Gold Wheaton and Kathleen Butt was appointed as chief financial officer of Gold Wheaton.

In conjunction with the closing of the FNX transaction, Kadywood Capital Corp. changed its name to Gold Wheaton Gold and Gold Wheaton commenced trading on Tier 1 of the TSX Venture Exchange under the symbol GLW.

Following the completion of the FNX transaction and the automatic exercise of the previously issued subscription receipts, Gold Wheaton will have outstanding approximately 928 million common shares, approximately 291.5 million common share purchase warrants and 18 million stock options. Pursuant to this transaction, FNX has acquired ownership of approximately 38 per cent of the issued and outstanding common shares of Gold Wheaton (on a non-diluted basis). FNX's principal office is located at 145 King St. West, Suite 1500, Toronto, Ont., M5H 1J8. Gold Wheaton has granted FNX a right to maintain its pro rata equity position in Gold Wheaton for 18 months provided that it holds at least 10 per cent of the then-outstanding Gold Wheaton common shares. The Gold Wheaton common shares were acquired for investment purposes only. Other than as agreed to as consideration for the FNX transaction, FNX has no present intention to acquire further Gold Wheaton common shares and may, from time to time, increase or decrease its ownership of or control over securities of Gold Wheaton in response to market conditions, the business and prospects of Gold Wheaton, or other factors.

Subsequent to the closing of this transaction, Gold Wheaton will have cash on hand of approximately $61-million and will be aggressively pursuing additional growth opportunities.

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