To view the PDF file, sign up for a MySharenet subscription.

FIRST URANIUM CORPORATION - Algold announces friendly acquisition of First Uranium

Release Date: 29/10/2013 14:40
Code(s): FUU     PDF:  
Wrap Text
Algold announces friendly acquisition of First Uranium

First Uranium Corporation
(Continued under the laws of Ontario, Canada)
(Registration number 2082276)
(South African registration number 2007/009016/10)
Share code: FUU ISIN: CA33744R5087

29 October 2013


MONTREAL, QC and TORONTO, ON – Algold Resources Ltd. ("Algold") (TSXV:ALG) and First
Uranium Corporation ("FIU") (NEX: FIU.H) (JSE: FUU) announced that they entered into a
definitive agreement (the "Agreement") pursuant to which Algold will acquire, by way of a
court-approved plan of arrangement, all of the issued and outstanding units (“FIU Units”) of
FIU (the "Transaction").

Pursuant to the terms of the Agreement, FIU shareholders will receive 0.0729849 of an
Algold share for each FIU Unit held, implying an offer of approximately C$0.011 per unit
based on the closing price of Algold’s shares on the TSX Venture Exchange on Friday,
October 25, 2013. In addition, for every full Algold share issued to an FIU shareholder, such
holder will receive ½ of one Algold common share purchase warrant (the "Algold
Warrants"). Each full Algold Warrant entitles the holder thereof to purchase one Algold
share at a price of $0.20 per Algold share at any time for a period of eighteen months
following the issuance of the Algold Warrants.

Pro forma the Transaction, FIU shareholders will own approximately 52% of Algold (based
on fully diluted in the-money shares outstanding). Approximately 33,465,671 common
shares of Algold are expected to be outstanding upon closing, subject to any adjustments
pursuant to the terms of the Agreement.


     •    Upon completion of the proposed Transaction, Algold would gain access to FIU’s net
          cash and cash-equivalent assets, which as of today, total approximately C$3.1

     •    Each of AngloGold Ashanti Limited, Franco-Nevada Corporation and Village Main
          Reef Limited, who collectively own or exercise control or direction over 78,122,653
          FIU Units, representing approximately 33% of the total issued and outstanding FIU
          Units, have agreed, subject to certain conditions, to vote their FIU Units in favour of
          the Transaction and will enter into support agreements with FIU in this regard.


     •    The proposed Transaction provides FIU shareholders with the opportunity to hold a
          majority interest in a mineral exploration company that has a number of properties
          and growth potential, which create the possibility for future value for FIU
          shareholders if Algold is successful in developing its business.

   •   The Algold Warrants to be issued pursuant to the Transaction provide FIU
       shareholders with further upside potential if Algold is successful developing its

   •   Prior to negotiating the terms of the proposed Transaction with Algold, the board of
       directors of FIU pursued a variety of strategic alternatives with a view to the best
       interests of FIU and its shareholders. The board is of the view that the Transaction
       represents the best alternative for the FIU shareholders with the greatest upside

   •   An alternative to the Transaction would be the voluntarily dissolution of FIU. The
       liquidation and dissolution of the Corporation would provide certain but extremely
       limited value to FIU shareholders, with such distribution contemplated to be in the
       range of $nil to $0.01 per FIU unit.

   •   In addition to providing limited value to the FIU shareholders, the process to
       liquidate and dissolve FIU may be complex, time-consuming and costly, which would
       further deplete the assets available for distribution to FIU shareholders.

   •   Pursuant to the Transaction, FIU shareholders are being provided with an
       opportunity to receive Algold shares and Algold Warrants for their NEX-listed FIU
       Units. The Algold shares are currently listed for trading on the TSXV, which is
       expected to provide FIU shareholders with increased liquidity should they desire to
       sell their Algold shares in the future.

   •   As a result of the proposed Transaction, Algold will be better funded to proceed with
       its current exploration program, which, if successful, could increase its ability to
       access the capital markets in the future.

   •   The fairness opinion received from Paradigm Capital Inc. indicates that the
       consideration payable pursuant to the Transaction is fair, from a financial point of
       view, to FIU shareholders.


The acquisition of FIU will be completed by way of a court-approved plan of arrangement,
whereby Algold will acquire each issued and outstanding FIU Unit in exchange for 0.0729849
of a common share of Algold. In addition, for every full Algold share issued to an FIU
shareholder, such holder will receive ½ of one Algold Warrant. The number of Algold shares
to be issued will be 17,402,149 based on the currently issued and outstanding shares as of
the date of this announcement, but will be subject to change depending on the number of
Algold options and warrants exercised while the offer is outstanding.

The board of directors of FIU has unanimously approved the transaction and will
recommend that shareholders vote in favour of the transaction.

Each senior officer and each member of the board of directors of FIU who owns FIU Units
has entered into support agreements with Algold pursuant to which each has agreed to vote
in favour of the transaction.

The terms and conditions of the Agreement will be disclosed in more detail in the
management information circular which will be filed and mailed to FIU shareholders in early
November 2013. Completion of the transaction is subject to customary conditions, including
court approvals, a favourable vote of at least 66 2/3% of the holders of FIU units voted at a
special meeting of shareholders, and the receipt of all necessary regulatory and stock
exchange approvals. The Agreement includes a reciprocal non-solicitation clause, right to
match covenants and provides for the payment of a C$100,000 break fee to Algold or FIU
under certain circumstances


Algold Resources Ltd is focused on the exploration and development of gold deposits in
West Africa. The board of directors and management team are seasoned resource industry
professionals with extensive experience in the exploration and development of world-class
gold projects in Africa.


This news release contains and refers to forward-looking information based on current
expectations. All other statements other than statements of historical fact included in this
release are forward looking statements (or forward-looking information). The Corporation’s
plans involve various estimates and assumptions and its business is subject to various risks
and uncertainties. For more details on these estimates, assumptions, risks and
uncertainties, see the Corporation's most recent Annual Information Form and most recent
Management Discussion and Analysis on file with the Canadian provincial securities
regulatory authorities on SEDAR at These forward looking statements are
made as of the date hereof and there can be no assurance that such statements will prove
to be accurate, such statements are subject to significant risks and uncertainties, and actual
results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking statements that
are included herein, except in accordance with applicable securities laws.


Please contact:

Mary Batoff                                              Francois Auclair
President and CEO                                        President and CEO
(416) 306-3072                                           (514) 889 5089

29 October 2013

Investec Bank Limited (Sponsor - First Uranium)


Date: 29/10/2013 02:40:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story