Trading Symbol: TSXV: BMC
Shares Outstanding: 166,283,160
WINDSOR, NS,
April 30, 2013 /CNW/ - Buchans
Minerals Corporation (TSXV: BMC) ("Buchans Minerals" or the
"Company") is pleased to announce that it has entered into a
binding arrangement agreement (the "Agreement") to complete a
business combination by way of a court-approved plan of arrangement
under the Canada Business Corporations Act (the
"Arrangement") with Minco plc (AIM Market: MIO) ("Minco").
The completion of the Arrangement will create a premier industrial
and base metals exploration and development company with advanced
projects in established mining jurisdictions in eastern
Canada.
Pursuant to the terms of the Agreement, Minco
will acquire all of the outstanding common shares of Buchans
Minerals (the "Buchans Shares") that it does not already own in
exchange for ordinary common shares of Minco (the "Minco Shares")
by way of a statutory plan of arrangement on the basis of 0.826 of
a Minco Share for each Buchans Share (the "Exchange Ratio").
Under the terms of the Arrangement, Minco will
issue approximately 124,642,198 new Minco Shares in exchange for
Buchans Shares. Upon completion of the Arrangement Buchans Minerals
shareholders ("Buchans
Shareholders") will hold 26.3% of the outstanding Minco Shares and
current Minco shareholders will hold 73.7% of the outstanding Minco
Shares. Based on the 60 day volume weighted average share prices
for Buchans Minerals and Minco for the period ending April 26th 2013, the Exchange Ratio
implies an offer price of $0.053 per
Buchans Minerals common share,
representing a premium of 45.2% to the 60 day VWAP of Buchans
Shares. The Exchange Ratio implies a 34.6% premium to the closing
share price of Buchans Minerals on the TSX Venture Exchange
("TSXV") on April 26,
2013.
Warren MacLeod,
President & CEO of Buchans Minerals stated that "The
merger with Minco represents an excellent value opportunity for the
shareholders of both companies. We believe that consolidating the
ownership of the Lundberg base metal project in central
Newfoundland and the Woodstock manganese project in New Brunswick is a major step towards
achieving our strategy of creating a strong intermediate base metal
company with an attractive growth profile focused on enhancing
shareholder value. In addition, the merger provides Buchans
Minerals shareholders with a 45.2% premium to recent market prices,
access to greater market liquidity and a strengthened balance sheet
with over $14 million in
cash."
Transaction Highlights
- Creation of a well-funded, growth focused exploration and
development company with a diversified portfolio of high grade
mining projects in eastern Canada.
- Simplifies and consolidates the ownership structure of the
Lundberg Project and Woodstock Manganese Project.
- Allows Buchans Shareholders to fully participate in the upside
from the advancement of the Woodstock Project, potentially one of
the largest undeveloped manganese deposits in North America.
- The combined company will be better positioned to expand and
develop the current resource of the Lundberg deposit as well as
advance the project through feasibility studies.
- Enhanced capital markets profile of the combined company with a
pro forma fully diluted in-the-money basis market capitalization of
approximately CDN$27 million (based
on Minco's closing share price on April 26,
2013).
Terms of the Business Combination between
Buchans Minerals and Minco
- Minco will acquire the Buchans Shares at an exchange ratio of
0.826 of a Minco Share for each Buchans Share.
- Pursuant to the Agreement, Minco will issue approximately
124,642,198 shares to Buchans Shareholders for the approximately
150,898,545 Buchans Shares currently outstanding (which excludes
the 15,384,615 Buchans Shares that are currently owned by
Minco).
- The acquisition of the Buchans Shares by Minco will be
accomplished by a statutory plan of arrangement, whereby Buchans
Minerals will amalgamate with a wholly-owned subsidiary of Minco to
form an amalgamated company that will be wholly-owned by Minco (the
"Merged Company").
- Upon completion of the Arrangement, all currently outstanding
share purchase warrants and options of Buchans Minerals (except for
the warrants held by Minco, which will be cancelled) will be
exercisable for Minco Shares at the Exchange Ratio with adjusted
exercise prices such that the same aggregate consideration will be
payable on exercise.
- Completion of the Arrangement will be subject to receipt of
necessary consents, approvals and other authorizations by
applicable regulatory authorities.
- The Arrangement is subject to a number of customary conditions,
including the receipt of approvals of the Buchans Shareholders, and
receipt of approvals of the Supreme Court of Nova Scotia and the TSXV. Buchans Minerals
plans to seek approval for the Arrangement at its annual and
special meeting of shareholders to be held in Halifax, Nova Scotia on June 28, 2013. Completion of the Arrangement will
be subject to the favourable vote of 66 2/3% of the votes cast by
Buchans Shareholders. In the event
there are delays in completing the required information circular
and securing regulatory approvals, Buchans Minerals will call a special meeting
of Buchans Shareholders at a later date to vote on the
Arrangement.
- The Agreement contains non-solicitation provisions which
restrict Buchans Minerals from soliciting or entering into third
party acquisition proposals, subject to customary
provisions that entitle Buchans Minerals to
consider and accept a
superior proposal and the right of Minco to submit a
counter-proposal. Pursuant to the Agreement, Buchans Minerals has
agreed to pay to Minco a break fee of Cdn$150,000 if the Agreement is terminated in
specified circumstances, including if the Buchans Shareholders fail
to approve the Arrangement.
- Concurrently with the execution of the Arrangement Agreement,
the directors of Buchans Minerals have entered into lock-up
agreements agreeing to vote in favour of the Arrangement.
Recommendation of the Board
The board of directors of Buchans Minerals
appointed a special committee (the "Special Committee") of
directors to evaluate and oversee the Arrangement. The Special
Committee retained, Stephen
Semeniuk, CFA as its independent financial advisor.
Stephen Semeniuk has provided a
fairness opinion to the Special Committee to the effect that,
subject to certain qualifications and assumptions, the Arrangement
is fair, from a financial point of view, to Buchans
Shareholders.
The Special Committee unanimously approved, and
recommended to the board of directors of Buchans to approve, the Arrangement. After
receiving the recommendation of the Special Committee, the board of
directors of Buchans has
unanimously determined (Warren
MacLeod and Paul Moore
abstaining due to their interest in the Arrangement as a result of
their planned appointments with the Merged Company
post-Arrangement) that the Arrangement is in the best interests of
Buchans Minerals and is fair, from a financial point of view, to
Buchans Shareholders.
Accordingly, the Special Committee and the Board
has unanimously recommended that the Buchans Shareholders vote in
favour of the Arrangement.
Management of Minco and the Merged
Company
Two nominees of Buchans Minerals will be
appointed to the board of directors of Minco, subject to the
approval of Minco and its nominated adviser under the rules of the
AIM Market. It is anticipated that the management
of Minco will continue to be
led by John
Kearney as Chairman and Chief Executive
Officer.
Warren MacLeod,
President and CEO of Buchans Minerals, will be appointed the
President of the Merged Company and Paul
Moore, VP Exploration of Buchans Minerals, will be appointed
the VP Exploration of the Merged Company.
Listing of the Minco Shares and Buchans
Shares
Minco will continue to trade on the Alternative
Investment Market of the London Stock Exchange ("AIM Market") and
Minco has agreed to apply for co-listing of the Minco Shares on a
North American stock exchange. Buchans Minerals will apply to
de-list the Buchans Shares from the TSX Venture Exchange ("TSXV")
on completion of the Arrangement.
Further Information
Further information regarding the Arrangement
will be contained in an information circular that Buchans Minerals
will prepare, file and mail to Buchans Shareholders. All Buchans
Shareholders are urged to read the information circular once it
becomes available as it will contain additional important
information concerning the Arrangement. Details regarding these and
other terms of the Arrangement are set out in the Arrangement
Agreement which will be filed on Buchans Minerals' profile on SEDAR
at www.sedar.com.
Advisors
Minco is being advised in relation to the
Arrangement by Davy Corporate Finance and by Canaccord Genuity
Corp. as its financial advisor and Stephen
Semeniuk, CFA is acting as financial advisor to Buchans Minerals.
About Buchans Minerals
Buchans Minerals is an Atlantic Canada based resource company that
has three main assets that include its 100% owned base metal
properties near Buchans in central
Newfoundland (optioned and joint
ventured to Minco), its 100% owned manganese property located near
Woodstock in New Brunswick (optioned and joint ventured to
Minco) and its 50% owned gold and copper Long Range Property in
central Newfoundland.
About Minco plc
Minco is registered in the Republic of Ireland and listed on the AIM
Alternative Investment Market of the London Stock Exchange ("MIO"),
is an exploration and development company currently engaged in
zinc-lead exploration in the United
Kingdom, Ireland and in
evaluating the Buchans Minerals base metal and manganese project in
eastern Canada. Minco holds
investments in zinc‐silver projects in Mexico through a holding of 30 million shares
(approximately 29%) in Xtierra Inc. listed on the TSX Venture
Exchange (TSX.V-"XAG").
Minco holds 15.4 million shares (approximately
9.8%) in Buchans Minerals Corporation also listed on the TSX.V
("BMC").
Minco also holds a 2% NSR royalty on the
Curraghinalt gold property in Northern
Ireland, which is being explored by Dalradian Resources Inc.
(TSX-"DNA").
Minco currently holds approximately US$14 million in cash and is also evaluating a
number of other investment opportunities in the minerals industry
in North America and Europe.
Forward Looking Statements &
Disclaimer
This news release may contain "forward-looking
information", as defined in applicable securities laws.
Forward-looking information typically contains statements that
relate to future, not past, events. In this context,
forward-looking information often addresses expected future
business and financial performance, and often contains words such
as "anticipate", "believe", "plan", "estimate", "expect", and
"intend", statements that an action or event "may", "might",
"could", "should", or "will" be taken or occur, or other similar
expressions. All statements, other than statements of historical
fact, included herein including, without limitation, relating to
the successful completion of the Arrangement, future performance of
Buchans Minerals and Minco, continuation of exploration and
development activities and the future trading price of securities
of Buchans Minerals and Minco, constitute forward-looking
information. Forward-looking information is based on a number of
factors and assumptions which have been used to develop such
information but which may prove to be incorrect, including, but not
limited to, assumptions in connection with the ability of
Buchans Minerals and Minco to
complete the Arrangement in accordance with the terms and
conditions of the Arrangement Agreement, the accuracy of
management's assessment of the effects of the completion of the
Arrangement, the trading price of securities of Buchans Minerals
and Minco, that the exchange rate between the Canadian dollar, the
British pound and the US dollar will be approximately consistent
with current levels, and the ability of Minco to list the Minco
Shares on a North American stock exchange. Forward-looking
information involves known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or
achievements, or other future events, to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking information. Such factors include,
among others, the following risks: the need for additional
financing; operational risks associated with mineral exploration;
fluctuations in commodity prices; title matters; environmental
liability claims and insurance; reliance on key personnel; the
potential for conflicts of interest among certain officers,
directors or promoters with certain other projects; the absence of
dividends; competition; dilution; the volatility of the trading
price and volume of securities of Minco and Buchans Minerals; risks
associated with the Arrangement, including risks relating to the
integration of Minco and Buchans Minerals and the failure to obtain
the required shareholder, court or regulatory approvals; and the
additional risks identified the management's discussion and
analysis section of our interim and annual financial statements or
other reports and filings with the TSXV and applicable securities
regulators. Forward-looking information in this release is based on
management's beliefs, estimates and opinions on the date of this
release and Buchans Minerals
undertakes no obligation to update forward-looking information
contained in this release if these beliefs, estimates and opinions
or other circumstances should change, except as required by
applicable securities laws. Investors are cautioned against
attributing undue certainty to forward-looking information.
Neither the TSXV nor its Regulation Services
Provider (as that term is defined in the policies of the TSXV)
accepts responsibility for the adequacy or accuracy of this
release, and no securities regulatory authority has either approved
or disapproved of the contents of this release.
SOURCE BUCHANS MINERALS
CORP.