SCOTTSDALE, AZ, March 26, 2014 /CNW Telbec/ - Chaparral Gold Corp.
("Chaparral") (TSX: CHL) announces that Waterton Precious Metals Fund
II Cayman, LP ("Waterton") has extended its hostile offer (the "Hostile
Bid") to acquire all of the outstanding common shares of Chaparral from
March 27, 2014 to 5:00 p.m. (Toronto time) on April 11, 2014. The
offer price of C$0.50 per share and all other conditions under the
Hostile Bid remain unchanged. Waterton have also applied to the
British Columbia Securities Commission to cease trade the Shareholder
Rights Plan that was adopted by the Board of Directors of Chaparral on
February 26, 2014 in order to give the Board more time to pursue value
Chaparral's closing share price on March 25 2014 is 12% higher than the
Hostile Bid and, in addition, the average closing share price since the
announcement of the Hostile Bid is 17% higher than the Hostile Bid
price. As outlined in Waterton's Notice of Extension of March 25, 2014
only 1,181 shares have tendered to their bid, representing 0.001% of the outstanding shares not currently controlled by Waterton.
The Board of Directors of Chaparral recommendation that shareholders REJECT the Hostile Bid as set out in the Directors' Circular dated March 4,
2014 (available on www.Sedar.com under Chaparral's profile) remains unchanged.
Nick Appleyard, CEO of Chaparral, stated "This extension to the Hostile
Bid by Waterton does not address their fundamental failure to recognize
the value in our flagship Goldfield gold property or our large Converse
gold property. Instead Waterton has decided to continue with a low-ball
bid that represents less value than our working capital. The message we
have received loud and clear from the majority of our shareholders (see
press release dated March 6, 2014) is that C$0.50 per share is not an
acceptable price for a very well-funded junior company with high
quality assets in one of the world's best mining jurisdictions."
The following is a summary of the principal reasons listed in the
Directors' Circular for the Board's recommendation that Shareholders REJECT the Hostile Bid by Waterton and DO NOT TENDER their Common Shares:
The Hostile Bid implies negative value for Chaparral's mineral
The Board is aggressively pursuing value-enhancing alternatives.
The Hostile Bid fails to recognize the strategic value of Chaparral's
The timing of the Hostile Bid is opportunistic.
The Hostile Bid is significantly below precedent multiples for
similar-scale gold developers.
The Hostile Bid represents an immaterial premium to the Common Share
price (as of February 14, 2014, the last trading day before publication of
the Waterton bid and a discount to the current share price).
Waterton's own financial advisors recognize the scarcity value of assets
similar to Goldfield.
Chaparral has a strong balance sheet and no near-term dilution risk for
The Hostile Bid is financially inadequate.
Rejection of the Hostile Bid by Shareholders.
Rejection of the Hostile Bid by Chaparral's directors and officers.
The Hostile Bid is highly conditional.
For these reasons, further details of which are set out in the
Directors' Circular, the Board unanimously recommended that
Shareholders REJECT the offer and NOT TENDER their Common Shares to the Hostile Bid. Shareholders who have already
tendered their Common Shares to the Hostile Bid and wish to withdraw
them, may do so by following the withdrawal procedures provided in
Section 7 of the Waterton Offering Circular dated February 19, 2014 as
filed on SEDAR.
About Chaparral Gold
Chaparral is a Nevada-focused precious metals company actively
permitting the 100%-owned Gemfield deposit at the Goldfield property,
in central Nevada. In addition to the Goldfield property, Chaparral
holds a 100% interest in the advanced-stage Converse property, also
located in Nevada.
Some of the statements contained in this release are "forward-looking
statements" within the meaning of Canadian securities law requirements,
including statements relating to the Company's plans in respect of the
Hostile Bid and in respect of its Goldfield and Converse properties.
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
performance or achievements to differ materially from the anticipated
results, performance or achievements expressed or implied by such
forward-looking statements. Factors that could cause actual results to
differ materially from anticipated results include the emergence of
potential alternative transactions to the Hostile Bid, or potential
amendments to the terms of the Hostile Bid by Waterton, and in respect
of the Goldfield and Converse properties, risks of delays in the
permitting process and risks of obtaining required construction
financing. Except as required pursuant to applicable securities laws,
the Company disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new information,
future events or otherwise.
SOURCE: Chaparral Gold Corp
For further information:
In North America:
Tel: 1 480 483 9932
Renmark Financial Communications
Tel: 1 514 939 3989
Tel: +41 44 853 00 47
Or email the Company at: firstname.lastname@example.org
Web Site: www.chaparralgold.com