VANCOUVER, Feb. 2 /CNW/ - Evolving Gold Corp. (TSX: EVG) (FSE: EV7) (the "Company" or "Evolving
Gold") announced today that its board of directors has set February 16,
2011 as the record date for the dividend-in-kind spin out transaction
(the "Spin Out") involving the transfer of the Company's option to
acquire the mineral claims forming the Kiyuk Lake gold property in
southern Nunavut (the "Kiyuk Property") to a new company, Prosperity
Goldfields Corp. ("Prosperity").
In connection with the Spin Out, the Company transferred to Prosperity
its interest in the option to acquire the Kiyuk Property in exchange
for common shares of Prosperity ("Prosperity Shares"). Prosperity also
completed a $1.5 million private placement with Evolving Gold pursuant
to which Prosperity issued 10,000,000 units to Evolving Gold at a
deemed price of $0.15 per unit, each unit consisting of one Prosperity
Share and one half of one share purchase warrant. Pursuant to the terms
of a funding agreement, all transaction costs related to the Spin Out
up to a maximum of $300,000 have been and will be paid by Evolving
Gold. Prosperity has agreed to reimburse Evolving Gold for the payment
of the transaction costs through the issuance of Prosperity Shares to
Evolving Gold at a deemed price of $0.15 per Prosperity Share.
Assuming the maximum of $300,000 of transaction costs are incurred in
connection with the Spin Out, Prosperity expects to issue up to
2,000,000 Prosperity Shares to Evolving Gold pursuant to the terms of
the funding agreement.
Under the dividend-in-kind, subject to applicable securities laws, each Evolving Gold shareholder will receive one Prosperity Share for
every ten Evolving Gold shares held on the record date, and the number
of Prosperity Shares to be issued will be rounded down to the nearest
whole number of Prosperity Shares. The payment date for the
dividend-in-kind is on or about March 3, 2011. Upon completion of the
Spin Out and the receipt of Prosperity Shares for the reimbursement of
transaction costs, Evolving Gold expects to hold approximately 48.5% of
the outstanding Prosperity Shares.
The record date is February 16, 2011. The ex-dividend date, the date as
of which a purchaser of Evolving Gold common shares will no longer be
entitled to receive any Prosperity Shares pursuant to the Spin Out, is
February 14, 2011.
Prosperity has filed a preliminary prospectus in all provinces and
territories of Canada and this preliminary prospectus is available on
SEDAR under Prosperity's profile. Prosperity expects to file a final
prospectus relating to the dividend-in-kind on or about February 2,
2011. The TSX Venture Exchange ("TSXV") has conditionally approved the
listing of the Prosperity Shares on the TSXV under the symbol "PPG",
subject to customary listing conditions. The final prospectus will be
available on SEDAR under Prosperity's profile. Copies of the final
prospectus will also be mailed to Evolving Gold shareholders of record
on the record date.
Evolving Gold believes that the fair market value, as at the date of
completion of the Spin Out, of the Prosperity Shares to be distributed
will be $0.15 per Prosperity Share.
As described in further detail in the prospectus, no Prosperity Shares
will be issued to shareholders who are (or are deemed to be)
non-residents of Canada. Rather, such Prosperity Shares will be
delivered to a trustee for sale in the open market following the
dividend-in-kind and the net proceeds will be delivered to non-resident
shareholders, net of any withholding taxes. Shareholders who fail to provide a declaration of Canadian residency on
or before March 2, 2011 in the form that will be provided may be deemed
to be a non-resident for these purposes. Canadian shareholders who hold
their shares in Evolving Gold through a brokerage or other account are
therefore urged to contact their brokers to avoid being deemed a
non-resident. The form of residency declaration will also be available on Evolving
Gold's website at www.evolvinggold.com.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy securities in any jurisdiction. The
Prosperity Shares to be distributed have not been approved or
disapproved by any Canadian or U.S. regulatory authority nor has any
such authority passed upon the accuracy or adequacy of the preliminary
prospectus. The Prosperity Shares will not be distributed in any state
or jurisdiction, including the United States, if an offer, a
solicitation of an offer to buy, or a sale of the Prosperity Shares
would be unlawful absent registration or qualification under the
securities laws of any such state or jurisdiction. Any public offering
of securities to be made in the United States can only be made pursuant
to an effective registration statement. The Prosperity Shares have not
been registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act"), or any state securities laws, and
the Company has no intention of filing such a registration statement in
connection with the dividend-in-kind of the Prosperity Shares.
Accordingly, shareholders of the Company who are resident in the United
States or who are U.S. persons (as defined in Rule 902 of Regulation S
under the U.S. Securities Act) will not be entitled to participate in
the dividend-in-kind of the Prosperity Shares, except as set out above
and in the preliminary prospectus of Prosperity.
About Evolving Gold Corp.
Evolving Gold is focused on exploring its gold discovery at Rattlesnake
Hills, Wyoming, an alkalic gold system, similar to the Cripple Creek
gold district in Colorado, and on four gold properties in and adjacent
to the productive Carlin district of northern Nevada, two of which are
100% controlled by Evolving Gold.
For more information about Evolving Gold please visit: www.evolvinggold.com. To receive regular updates or to receive a follow-up call from
Investor Relations please sign up at: http://evolvinggold.com/sign-up.php.
On Behalf of the Board of Directors
EVOLVING GOLD CORP.
CEO and Director
FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements which address
future events and conditions, which are subject to various risks and
uncertainties. Such statements include those related to the timing and
benefits of the proposed Spin Out, the expected filing and availability
on SEDAR of Prosperity's final prospectus, and the expected payment
date of the dividend-in-kind. The Company's actual results and
financial position could differ materially from those anticipated in
such forward-looking statements as a result of numerous factors, some
of which may be beyond the Company's control. These factors include:
results of exploration activities and development of mineral
properties; fluctuations in the marketplace for the sale of minerals;
the inability to implement corporate strategies; the ability to obtain
financing; currency fluctuations; general market and industry
conditions; securities regulatory review of the final prospectus,
logistical factors involved in the payment of the Prosperity Shares,
and other risks disclosed in the Company's filings with Canadian
Forward-looking statements are based on the expectations and opinions of
the Company's management on the date the statements are made. The
assumptions used in the preparation of such statements, although
considered reasonable at the time of preparation, may prove to be
imprecise and, as such, undue reliance should not be placed on
forward-looking statements. Such assumptions include assumptions
related to the receipt of securities regulatory approval of the
Prosperity prospectus and the expected benefits of the Spin Out for
Evolving Gold shareholders. The Company expressly disclaims any
intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise, except as required by law.
SOURCE Evolving Gold Corporation
For further information: