Victoria's Exploration Techniques to Add Value to Acquired Properties
Victoria Gold Corp.
TSX VENTURE: VIT
TORONTO, Aug. 19 /CNW Telbec/ - Victoria Gold Corp. (TSX VENTURE:VIT)
("Victoria") and Gateway Gold Corp. ("Gateway") are pleased to announce that
their respective boards of directors have approved a letter of agreement in
respect of a proposed friendly transaction in which Victoria will acquire all
of the outstanding common shares of Gateway in exchange for Victoria common
Financial Terms of the Transaction
Victoria has agreed to offer Gateway shareholders 0.50 of a Victoria
common share for each Gateway common share held. This represents an
approximate 20% premium to Gateway's 30-day volume-weighted average share
price based on Victoria's 30-day volume-weighted average share price. All
outstanding Gateway options and warrants will be exchanged for equivalent
value options and warrants of Victoria on similar terms.
Nevada Gold Focus
Victoria is a gold exploration company with interests in eight advanced
properties in north-central Nevada. Victoria's innovative exploration
techniques have been instrumental in identifying new gold-bearing zones on
several of these properties including, most recently, at Cove-McCoy, the site
of the Helen Zone discovery.
Gateway is a mineral exploration company focused on identifying,
exploring and developing gold deposits in Nevada. Gateway has nine gold
projects within some of the most prolific gold belts in Nevada. The company's
most advanced project, the Big Springs project, has a NI 43-101 compliant
inferred resource of 1.2 million ounces at an average grade of 2.67 g/t, such
resource being more particularly set out in the technical report dated March
14, 2006, which report is available under the profile of Gateway on SEDAR.
The successful completion of the transaction will consolidate the two
companies' gold exploration assets in Nevada, a region recognized for its high
gold production and relatively low risk.
- This transaction will allow for the application of Victoria's
innovative exploration techniques on Gateway's advanced exploration
- This transaction diversifies Victoria's portfolio of projects across
the development pipeline, moving Victoria even closer to gold
production. The most advanced project in the combined portfolio will
be the Big Springs project. The next step in the development of this
project will be to commission a feasibility study.
"We have a high level of confidence in the exploration potential of each
of Victoria's existing advanced exploration gold projects such as Cove, Mill
Canyon, Hilltop, and Summit. This transaction was driven predominantly by the
strong conviction of our exploration team that our innovative exploration
expertise will provide a fresh approach to Gateway's projects, thereby
unlocking increased potential for a rapid new discovery," said Chad Williams,
President & CEO of Victoria. "This transaction reinforces our stated strategy
to add value per share through efficient exploration and accretive
acquisitions," added Mr. Williams.
"We are very excited about this transaction with Victoria," commented
Michael McInnis, President and CEO of Gateway. "We have been evaluating growth
opportunities in Nevada for some time and this is the transaction that makes
the most sense for our shareholders. We are very impressed with the Victoria
team and their property portfolio. In the shorter term, our shareholders
receive an attractive premium and financial support to advance our projects.
In the longer term, we will benefit from Victoria's aggressive growth plans
and from the combined company's ability to attract financing from its many
Upon completion of the transaction Victoria will have approximately
112,641,000 million basic common shares outstanding, of which current Victoria
shareholders will own approximately 83% and former Gateway shareholders will
own approximately 17%.
It is envisaged that the transaction will be structured as an acquisition
of all of the outstanding shares of Gateway by Victoria completed by way of a
plan of arrangement. The parties will work towards entering into a definitive
agreement as soon as possible, and in any event by September 22, 2008.
Completion of the transaction is conditional upon:
1. the Gateway shareholders having approved the transaction by
66 2/3% majority;
2. receipt of all necessary regulatory approvals;
3. the absence of a material adverse change with respect to each
4. certain other customary conditions.
The letter of agreement includes a commitment by Gateway not to solicit
alternative transactions. In addition, each of Victoria and Gateway has agreed
to pay the other of them, in certain circumstances, a fee of $250,000 if the
proposed transaction is not completed.
Capital West Partners, Gateway's independent financial advisor, has
provided to Gateway a preliminary opinion that the consideration offered by
Victoria pursuant to the transaction is fair, from a financial point of view,
to Gateway's shareholders. Victoria's legal counsel is Fraser Milner Casgrain
LLP. Gowlings LLP and DuMoulin Black LLP are legal counsel for Gateway.
Upon completion of the transaction the current President and CEO of
Victoria, Mr. Chad Williams, will remain the President & CEO of the combined
company which will retain the name "Victoria Gold Corp.". Mr. Michael McInnis,
the current President & CEO of Gateway, will be a director of the combined
As part of the transaction, Victoria will advance to Gateway a bridge
loan in the amount of $500,000 maturing on March 31, 2009, and repayable by
Gateway together with interest at the rate of 10% per annum, calculated and
payable monthly. The loan is repayable in cash or shares by Gateway at any
time prior to maturity without penalty. This loan will provide working capital
for Gateway until the completion of the transaction.
A joint conference call will be hosted by Chad Williams, President and
CEO of Victoria Gold Corp. and Michael McInnis, President and CEO of Gateway
Gold Corp., to discuss this transaction. Details are as follows:
Date: Tuesday, August 19, 2008
Time: 2:00 pm (EST)
Dial in: 416 644 3418 or toll free in Canada and the US: 1 800 731 6941
Replay: 416 640 1917 or toll free in Canada and the US 1 877 289 8525
Replay passcode: 21281079#
The conference call may also be accessed on a listen-only basis via
webcast at www.newswire.ca or at
www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2390080. The audio webcast
will be archived on Victoria's website at www.vitgoldcorp.com and on Gateway's
website at www.gatewaygold.com.
Victoria aims to be a high growth, lower risk company focused on gold.
The Company's strategy is to add value per share through efficient
exploration, accretive acquisitions and effective marketing. Maintaining a low
risk profile through project diversification, sound financial management, and
operating in secure jurisdictions are key priorities for Victoria's management
Gateway utilizes its core strengths of technical and financial expertise
to achieve a higher than average success rate in the identification,
evaluation and development of quality gold deposits. Through this intelligent
application of these skills the company aims to deliver solid growth in value
to its shareholders in an environmentally responsible fashion.
On Behalf of Victoria Gold Corp.
Chad Williams, P. Eng, CEO, President & Director
Cautionary Language and Forward-Looking Statements - This press release
contains "forward-looking statements" and "forward-looking information", which
may include, but is not limited to, statements with respect to the future
financial or operating performances of Victoria Resource Corporation, its
subsidiaries and their respective projects, the future price of gold, the
estimation of mineral reserves and resources, the realization of mineral
reserve estimates, capital, operating and exploration expenditures, costs and
timing of future exploration, requirements for additional capital, government
regulation of exploration, development and mining operations, environmental
risks, reclamation and rehabilitation expenses, title disputes or claims, and
limitations of insurance coverage. Often, but not always, forward-looking
information can be identified by the use of words such as "plans", "expects",
"is expected", "is expecting", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates", or "believes", or variations (including
negative variations) of such words and phrases, or state that certain actions,
events or results "may", "could", "would", "might", or "will" be taken, occur
or be achieved. The purpose of forward-looking information is to provide the
reader with information about management's expectations and plans for the
Company. Readers are cautioned that forward-looking information involves known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Victoria and/or its subsidiaries to be
materially different from any future results, performance or achievements
expressed or implied by the forward-looking information. Although Victoria has
attempted to identify statements containing important factors that could cause
actual actions, events or results to differ materially from those described in
forward-looking information, there may be other factors that cause actions,
events or results to differ from those anticipated, estimated or intended.
Forward-looking information contained herein is made as of the date of this
document based on the opinions and estimates of management on the date
statements containing such forward looking information are made. There can be
no assurance that forward-looking information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not place undue
reliance on forward-looking information.
This news release and the information contained herein does not
constitute an offer of securities for sale in the United States and securities
may not be offered or sold in the United States absent registration or
exemption from registration.
For further information:
For further information: Please contact: Chad Williams, President & CEO,
Victoria Gold Corp., (416) 866-8800 ext 230,firstname.lastname@example.org; Linda
Dorrington, Director Public & Corporate Affairs, Victoria Gold Corp., (416)
866-8800 ext 226, email@example.com Website: www.vitgoldcorp.com