All of the outstanding common shares in the capital of Lake Shore Gold Corp. are to be acquired by Temex Resources Corp, according to a court-approved
All of the outstanding common shares in the capital of Lake Shore Gold Corp. are to be acquired by Temex Resources Corp, according to a court-approved plan. — Photo courtesy Lake Shore Gold
Temex Resources Corp. ("Temex" or "the Company") announces that it has received a proposal from Lake Shore Gold Corp. ("Lake Shore Gold") to acquire all of the outstanding common shares in the capital of the Company by way of a court-approved plan of arrangement (the "Lake Shore Proposal"). The board of directors of Temex (the "Temex Board") has determined, after receiving a recommendation to such effect from its Special Committee and the advice of the financial and legal advisors to the Company, that the Lake Shore Proposal is a "Superior Proposal" as defined in the arrangement agreement between Temex and Oban Mining Corporation ("Oban") announced on June 29, 2015 ("the Oban Arrangement Agreement"). Temex has provided notice of such determination to Oban.
Under the Lake Shore Proposal, each Temex shareholder would receive, in exchange for each Temex Share held, 0.105 of a common share in the capital of Lake Shore (a "Lake Shore Share") having a value of $0.13 based on the closing price of Lake Shore Gold's shares on the TSX on July 15, 2015.
The consideration that would be received by Temex shareholders if the Lake Shore Proposal is implemented by Temex represents a premium of 106% to the 15-day volume weighted average trading price of the Temex common shares on the TSX Venture Exchange prior to the announcement by Temex that it had entered into a binding letter agreement with Oban on June 9, 2015 based on the closing price of Lake Shore Gold's shares on the TSX on July 15, 2015. The Lake Shore Proposal is not subject to any financing condition or any due diligence and/or access condition, and is not subject to the approval of Lake Shore Gold shareholders. The Lake Shore Proposal includes a break fee of $1.0 million payable to Lake Shore Gold in certain circumstances.
Pursuant to the provisions of the Oban Arrangement Agreement, Oban has a period of ten business days (the "Oban Match Period") to match the Lake Shore Proposal. The Oban Match Period expires on July 30, 2015.
If, within the Oban Match Period, Oban offers to amend the Oban Arrangement Agreement such that the Temex Board determines that the Lake Shore Proposal is no longer a "Superior Proposal" (as defined in the Oban Arrangement Agreement), Temex will be required to enter into an amendment to the Oban Arrangement Agreement and implement the amended agreement. In that circumstance, no agreement will be entered into between Temex and Lake Shore Gold with respect to the Lake Shore Proposal.
If, within the Oban Match Period, Oban does not offer to amend the Oban Arrangement Agreement, or if the Lake Shore Proposal continues to be superior to an amended transaction proposed by Oban, Temex may: (i) terminate the Oban Arrangement Agreement; (ii) pay Oban the agreed termination payment of $691,856 under the Oban Arrangement Agreement; and (iii) enter into an agreement with Lake Shore Gold to complete a transaction on the terms proposed by it. In that event, the agreement with Lake Shore Gold would require the directors and officers of Temex to enter into lock-up agreements with respect to the transaction with Lake Shore Gold on substantially the same terms as the agreements entered into under the Oban Arrangement Agreement pursuant to which, among other things, they would agree to vote their Temex common shares in favour of the Lake Shore Proposal at a meeting of shareholders of Temex to be called to consider such transaction.
At this time, no agreement has been entered into between Temex and Lake Shore Gold in respect of the Lake Shore Proposal. Accordingly, there can be no assurance that Temex will enter into a binding agreement in respect of the Lake Shore Proposal, or that the Lake Shore Proposal will be effected. Temex will issue further news releases providing additional information as developments warrant, including information with respect to any changes to the meeting of Temex shareholders currently scheduled for August 20, 2015.
Advisors to Temex
GMP Securities L.P. is acting as financial advisor to Temex and Norton Rose Fulbright Canada LLP is acting as legal advisor.
About Lake Shore Gold
Lake Shore Gold is a Canadian-based gold producer with operations based in the Timmins Gold Camp of Northern Ontario. Lake Shore Gold produces gold from two mines, Timmins West and Bell Creek, with material being delivered for processing to the Bell Creek Mill. In addition to current mining and milling operations, Lake Shore Gold also has a number of highly prospective projects and exploration targets, all located in and around the Timmins Camp. Lake Shore Gold's common shares trade on the TSX and NYSE MKT under the symbol LSG.
Ian Campbell, P.Geo., President and CEO and Karen Rees, P.Geo., Vice President, Exploration and Corporate Secretary of Temex Resources Corp., are the designated qualified persons responsible for the preparation of this news release.
About Temex Resources Corp.
Temex is a Canadian based exploration company focusing on its portfolio of precious metals properties in the world class mining district of northeastern Ontario. Temex is advancing the Timmins Whitney Gold Project, in partnership with Goldcorp Canada Ltd., and exploring its 100% owned Juby Gold Project.
