NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
PERTH, Western Australia, Nov. 28, 2011 /CNW/ -
On 22 August 2011, Adamus Resources Limited (ASX:ADU, TSX-V:ADU,
FSE:AXM) (Adamus) announced that it had signed a Merger Implementation Agreement with
Endeavour Mining Corporation (TSX:EDV) (Endeavour), a TSX listed entity, to combine through an all-stock merger of
equals. The merger will be implemented as a Scheme of Arrangement
between Adamus and its shareholders under the Australian Corporations
Act. If this resolution is passed and the merger is implemented,
Endeavour Gold Corporation (a wholly owned subsidiary of Endeavour)
will acquire all of the issued ordinary shares of Adamus and Adamus
shareholders will receive 0.285 of an Endeavour share (in the form of
CHESS depository interests or shares) for each Adamus share they hold1. Following successful completion of the merger, Adamus shareholders
will own approximately 53.01% of the merged group.
The merger will create a leading West African gold production,
development and exploration company as a platform for future growth and
acquisitions. The merged group's assets will include two operating gold
mines in Burkina Faso and Ghana, a feasibility stage project in Côte
d'Ivoire which should increase total production to approximately
250,000 ounces from the end of 20132, and an attractive portfolio of exploration opportunities in Ghana,
Burkina Faso, Côte d'Ivoire, Mali and Liberia.
Recently, all shareholders were sent a scheme booklet which included a
notice of meeting for today's scheme meeting. The scheme booklet
provided shareholders with a detailed overview of the merger proposal
including a summary of reasons why you may vote for or against the
1 Ineligible Foreign Shareholder will not receive Endeavour shares (in
the form of CDIs or shares) under the Scheme. Instead, the number of
Endeavour shares that would otherwise have been issued to them under
the Scheme will be issued to a Sale Agent, as each Ineligible Foreign
Shareholders nominee in trust, who will sell those Endeavour shares on
the TSX following the implementation of the Scheme. The Sale Agent
will then pay each Ineligible Foreign Shareholder the sale proceeds,
net of any brokerage, taxes and charges.
2 Assuming a favourable construction decision on the Agbaou Gold Project
in Côte d'Ivoire.
Advantages of the merger
Your Directors unanimously believe the benefits of the merger to
significantly outweigh the potential disadvantages.
There are a number of reasons why the Directors think that you should
vote in favour of the scheme to effect the merger. These are set out in
Section 1.1 of the scheme booklet. Rather than go through each of them
in detail, I would just like to highlight some of the key reasons for
our recommendation, including:
The merger will create a growth focused West African gold producer, with
an enhanced suite of production, development and exploration assets.
The merged group's assets will includes:
two operating gold mines - Nzema in Ghana and the Youga Gold Mine in
Burkina Faso - with pro forma 2011 gold production of 172,000 ounces;
a feasibility stage project - the Agbaou Gold Project in Côte d'Ivoire,
on which a construction decision is expected in the first quarter of
The merged group will have a materially stronger balance sheet with a
pro forma cash and marketable securities position of US$217.5 million
(versus US$22m for Adamus standalone) as at 30 June 2011. Furthermore,
a new revolving corporate loan facility of US$200 million, to be
provided by UniCredit Bank AG3, will provide the Merged Group with significant flexibility.
The merger will deliver development projects and future opportunities
with an improved risk profile and enhance the scale and growth platform
of Adamus, including through greater access to global capital markets.
Your Board's belief that the scheme is in the best interests of the
shareholders is also supported by the recommendations of the
Independent Expert, Ernst & Young Transaction Advisory Services
Limited, who has opined that in the absence of a superior proposal, the
scheme and therefore the proposed merger is fair and reasonable, and in
the best interests of Adamus shareholders. The Independent Expert's
Report was included as Annexure A of the scheme booklet.
As with any transaction, there are a number of risks relating to the
implementation of the merger. These risks are set out in detail in
section 11 of the scheme booklet.
Adamus would like to note that on 10 November 2011, Endeavour announced
the sale of its debt finance and related mergers and acquisitions
advisory business. The advisory business is an immaterial non-core
asset of Endeavour. This sale has been considered by the Independent
Expert who have confirmed to Adamus that they agree it is an immaterial
non-core asset of Endeavour and the sale will not affect their opinion
that the scheme is in the best interests of Adamus shareholders. As the
position of the Independent Expert has not altered, the Adamus board
considers that the sale is not a significant matter that has arisen
which would have required inclusion in the scheme booklet. The full ASX
announcement in relation to this issue can be viewed on the website of
the ASX (www.asx.com.au).
3 The availability of this facility is subject to implementation of the
Scheme, execution of final facility agreements and satisfaction of the
Management and governance
Following implementation of the merger, the merged entity will have the
significant advantage of combining two talented and experienced boards
and management teams. On completion of the scheme, Neil Woodyer from
Endeavour will be Chief Executive Officer and Mark Connelly from Adamus
will be Chief Operating Officer of the merged entity. The merged
entity's operational management will be led from Perth and will report
to the Chief Operating Officer (Mark Connelly). Michael Beckett will be
Non-Executive Chairman of the merged entity whose Board of Directors
will comprise of three nominees from each of Adamus and Endeavour (in
addition to the Chairman). Adamus' nominees are Mark Connelly, Martin
Reed and Dr Antony Harwood. Endeavour's nominees are Neil Woodyer,
Jorge Gamarci and Wayne McManus.
The merger between Adamus and Endeavour requires a number of conditions,
set out in the scheme booklet, to be satisfied. I am pleased to report
that all third party approvals have now been obtained except for the
shareholder approvals which we are seeking at the meeting today and
certain conditions relating to the approval of the Federal Court of
Australia (which may only occur subsequent to shareholder approvals
being obtained at today's meeting).
The key conditions that remain outstanding are as follows:
The scheme resolution must be approved by a majority in number of Adamus
shareholders voting at this scheme meeting (whether in person or
proxy), who must together hold at least 75% of the votes cast on the
Secondly, the Federal Court of Australia must approve the scheme
following approval by Adamus shareholders. The Second Court Hearing
for the scheme is scheduled for Friday, 2 December 2011, subject to the
scheme first being approved at this scheme meeting.
Taking all of the matters outlined today and in the scheme booklet into
account, the Adamus Board unanimously believe that the advantages of
the merger outweigh its disadvantages and risks and each Director
recommends that you vote in favour of the resolution. Each Director
intends to vote all Adamus shares held by them in favour of the scheme.
I encourage you vote in favour of the scheme and support Adamus and
Endeavour as we enter this next exciting chapter.
It's now time for the shareholders to express their view.
SOURCE Adamus Resources Limited
For further information:
Mr Ian Cunningham - Company Secretary
on +61 8 9322 5943