New Island Resources (TSXV:NIS)
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TORONTO AND ST. JOHN'S', Dec. 10 /CNW/ --
TORONTO AND ST. JOHN'S, Dec. 10 /CNW/ - Anaconda Mining Inc. ("Anaconda") (TSX: ANX) and New Island Resources Inc. ("New Island") (TSXV: NIS) are pleased to announce they have entered into an
arrangement agreement (the "Arrangement Agreement") in connection with their previously announced transaction, whereby
Anaconda will acquire New Island's interest in the Pine Cove Mine and
Mill.
The Transaction will be structured as a Plan of Arrangement under the Business Corporations Act (Alberta) between Anaconda and New Island.
Highlights of the Transaction
The Arrangement will result, through a series of transactions, in New
Island selling to Anaconda all of its interest in the Pine Cove Mine
and Mill in exchange for common shares in Anaconda (each, an "Anaconda Share") on the basis of a share exchange ratio of 0.45 of an Anaconda Share
for each one common share of New Island (each, a "New Island Shares"). New Island will then immediately distribute the Anaconda Shares to
its shareholders (other than Anaconda) by way of a return of capital.
Former shareholders of New Island (the "Tendered New Island Shareholders") who tendered their shares in New Island (the "Tendered New Island Shares") to Anaconda pursuant to Anaconda's takeover bid offer in the summer
of 2010 (the "Offer") and received 0.42 of an Anaconda Share for each one New Island Share
they tendered, will have issued to them by Anaconda an additional 0.03
of an Anaconda Share for each one New Island Share they tendered. In
addition, pursuant to the Arrangement, Anaconda will return to the
Tendered New Island Shareholders the New Island Shares it acquired from
them pursuant to the Offer.
Board Recommendation
The Arrangement has been unanimously approved by the boards of directors
of both Anaconda and New Island and will be subject to customary
conditions, including a favourable vote of 66 2/3% of the New Island
common shares voted at a special meeting of shareholders called to
approve the transaction and the receipt of court and necessary
regulatory approvals. In addition, the Arrangement resolution must be
approved by a simple majority of the votes cast by the minority
shareholders of New Island. The board of directors of New Island
unanimously recommends that holders of New Island Shares vote in favour
of the transaction.
The Arrangement Agreement includes a commitment by New Island not to
solicit or initiate discussions concerning alternative transactions,
including the acquisition or sale of material assets or subsidiaries of
New Island. Anaconda and New Island have each agreed to pay to the
other a break fee of C$300,000 in certain circumstances. New Island has
also granted Anaconda the right to match competing offers.
In addition to the approximate 49.97% ownership of New Island acquired
by Anaconda pursuant to the Offer, holders of approximately 12.82% of
the outstanding New Island shares, which includes all directors and
officers of New Island, have agreed to vote in favour of the
Arrangement.
Advisors and Fairness Opinions
Salman Partners Inc. were engaged by New Island as a financial advisor
to provide financial advice to the New Island board of directors and
its opinion as to the fairness, from a financial point of view, of the
consideration to be received by the New Island Shareholders pursuant to
the Arrangement. The fairness opinion delivered by Salman Partners
states that, as of the date of their opinion and subject to and based
on the various considerations referred to in their opinion, the
consideration to be received by New Island Shareholders pursuant to the
Arrangement is fair, from a financial point of view, to New Island
Shareholders.
Cassels Brock & Blackwell LLP is acting as external legal counsel to
Anaconda and Cox & Palmer is acting as external legal counsel to New
Island.
Closing
The Arrangement is subject to New Island obtaining the required
shareholder approval at a special meeting of its shareholders and to
the receipt of court and all necessary regulatory approvals.
An management information circular for the special shareholders meeting
of New Island is expected to be mailed by December 21, 2010 and New
Island will hold the special meeting to approve the Arrangement on
January 11, 2011. The Arrangement is scheduled to close shortly
thereafter. The record date for the special meeting has been fixed as
December 17, 2010.
About Anaconda Mining Inc.
Anaconda is a Toronto, Canada-based mining and exploration company
focused on operating the Pine Cove gold mine located near Baie Verte in
Newfoundland, Canada and, with its joint venture partner, Inversiones
SBX Limitada, advancing the development and exploration of its iron ore
portfolio in Chile.
Additional information concerning Anaconda may be obtained on Anaconda's
website at: www.anacondamining.com or from the System for Electronic Document Analysis and Retrieval
("SEDAR") website at: www.sedar.com under Anaconda's profile.
About New Island Resources Inc.
New Island is a diversified junior exploration company holding gold and
base metal properties in the Province of Newfoundland and Labrador. New
Island has entered into an agreement for the sale of its interest in
the gold mine and mill project at Pine Cove in central Newfoundland.
Additional information concerning this sale and New Island may be
obtained on New Island's website at: www.newislandresources.com or from the SEDAR website at: www.sedar.com under New Island's profile.
Cautionary Notice: This news release contains "forward-looking information" within the
meaning of applicable Canadian securities legislation. Forward-looking
information includes, but is not limited to, information concerning the
proposed arrangement between Anaconda and New Island and matters
relating thereto. Generally, forward-looking information can be
identified by the use of forward-looking terminology such as "plans",
"expects", or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates", or "does not
anticipate", or "believes" or variations of such words and phrases or
statements that certain actions, events or results "may", "could",
"would", "might", or "will be taken", "occur", or "be achieved".
Forward-looking information is based on the opinions and estimates of
management at the date the information is made, and is based on a
number of assumptions and subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking information. Assumptions upon which such
forward-looking information is based include, without limitation, that
the shareholders of New Island will approve the transaction, that all
required 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. Many of these assumptions
are based on factors and events that are not within the control of
Anaconda or New Island and there is no assurance they will prove to be
correct. Factors that could cause actual results to vary materially
from results anticipated by such forward-looking information include
changes in market conditions, variations in ore grade or recovery
rates, fluctuating metal prices, changes in project parameters, the
possibility of project cost overruns or unanticipated costs and
expenses, labour disputes and other risks of the mining industry,
failure of plant, equipment or processes to operate as anticipated, as
well as those risk factors discussed in Anaconda's Annual Information
Form for the year ended December 31, 2009 available at www.sedar.com
and New Island's Management Information Circular, a copy of which will
be available on www.sedar.com. Although Anaconda and New Island have
attempted to identify important factors that could cause actual
actions, events or results to differ materially from those described in
forward-looking information, there may be other factors that cause
actions, events or results not to be anticipated, estimated or
intended. There can be no assurance that forward-looking information
will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such information. Anaconda
and New Island undertake no obligation to update forward-looking
information if circumstances or management's estimates or opinions
should change except as required by applicable securities laws. The
reader is cautioned not to place undue reliance on forward-looking
information.
This news release and the information contained herein does not
constitute an offer of securities for sale in the United States and
securities may not be offered or sold in the United States absent
registration or exemption from registration.
"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".
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/December2010/10/c4192.html
table class="cnwBorderedTable" border="1" cellspacing="0"tr valign="top"td align="left"bAnaconda Mining Inc./bbr/ Dustin Angelobr/ President and CEObr/ Tel: (647) 260-1248br/ Email: a href="dangelo@anacondamining.com"dangelo@anacondamining.com/abr/ Website: a href="http://www.anacondamining.com"www.anacondamining.com/a/td td align="left"bNew Island Resources Inc./bbr/ Harold Warehambr/ Presidentbr/ Tel: (709) 576-7711br/ Email: a href="info@newislandresources.com"info@newislandresources.com/abr/ Website: a href="http://www.newislandresources.com"www.newislandresources.com/a/td/tr/table