Chaparral Gold Provides Update on Hostile Bid from Waterton

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 enhancing alternatives.

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 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:

  1. The Hostile Bid implies negative value for Chaparral's mineral properties.
  2. The Board is aggressively pursuing value-enhancing alternatives.
  3. The Hostile Bid fails to recognize the strategic value of Chaparral's asset base.
  4. The timing of the Hostile Bid is opportunistic.
  5. The Hostile Bid is significantly below precedent multiples for similar-scale gold developers.
  6. 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).
  7. Waterton's own financial advisors recognize the scarcity value of assets similar to Goldfield.
  8. Chaparral has a strong balance sheet and no near-term dilution risk for Shareholders.
  9. The Hostile Bid is financially inadequate.
  10. Rejection of the Hostile Bid by Shareholders.
  11. Rejection of the Hostile Bid by Chaparral's directors and officers.
  12. 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.

Cautionary Statements:

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:
Nick Appleyard
Tel: 1 480 483 9932

Robert Thaemlitz
Renmark Financial Communications
Tel: 1 514 939 3989

In Europe:
Oliver Holzer
Marketing Consultant
Tel: +41 44 853 00 47

Or email the Company at:

Web Site:

Organization Profile

Chaparral Gold Corp

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890