Offers shareholders attractive premium, immediate liquidity, cash
Low likelihood of competing offer, no financing conditions
TORONTO, Feb. 18, 2014 /CNW/ - Waterton Precious Metals Fund II Cayman,
LP ("Waterton") today announced that it intends to commence, through
its subsidiary Waterton Precious Metals Bid Corp., an offer to acquire
all of the issued and outstanding common shares of Chaparral Gold Corp.
(TSX: CHL) ("Chaparral") not already held by it and its affiliates at a
price of C$0.50 in cash per share (the "Offer"). The Offer represents a
premium of approximately 22.5% based on the volume-weighted average
price of the Chaparral shares on the TSX for the twenty (20) trading
days ended February 14, 2014 and a premium of approximately 14.9% over
the closing price of the Chaparral shares on the TSX on February 14,
2014. Waterton currently owns 3,403,500 Chaparral shares, representing
approximately 2.9% of the issued and outstanding Chaparral shares.
Benefits to Chaparral Shareholders
Waterton believes that the Offer will be attractive to Chaparral
shareholders for the following reasons:
Attractive Premium: The Offer represents a premium of approximately 22.5% based on the
volume-weighted average price of the Chaparral shares on the TSX for
the twenty (20) trading days ended February 14, 2014 and a premium of
14.9% over Chaparral's closing price on February 14, 2014.
Immediate Liquidity: The Offer provides shareholders with immediate liquidity and the ability
to fully monetize their investment at a price higher than the Chaparral
shares have ever traded on the TSX.
Cash Consideration and Certainty of Value: The Offer provides shareholders with immediate cash consideration for
their shares, allowing shareholders to realize certain value for
Chaparral's assets in excess of the value currently being ascribed to
those assets by the stock market. The Offer also allows shareholders to
avoid ongoing operational and funding risks associated with Chapparal,
and to sell all of their shares at a fixed price - free of broker
commissions and fees.
Low Likelihood of a Competing Offer: Competing bidders are unlikely to be willing to pay the premium being
paid under the Offer, as there are limited potential bidders that, like
Waterton Precious Metals, have a presence in Nevada and would be
attracted to Chaparral's development-stage assets.
Fully-Financed Cash Offer: The Offer is not conditional on obtaining financing and the Offeror has
sufficient committed funding to fund the entire consideration payable
for the Shares.
About the Offer
The Offer will be open for acceptance until 5:00 p.m. (Toronto time) on
March 27, 2014 unless the Offer is extended or withdrawn. The Offer
will be subject to customary conditions, including there being validly
deposited under the Offer such number of Chaparral shares which,
together with the Chaparral shares directly or indirectly owned by
Waterton and its affiliates, constitutes at least 662/3% of the total outstanding Chaparral shares (on a fully diluted basis),
no material adverse changes, and receipt of all necessary governmental
or regulatory approvals. The Offer is fully financed and is not
conditional on financing.
The full details of the Offer will be included in the formal offer and
take-over bid circular and accompanying offer documents, which Waterton
expects to file on or before February 19, 2014 with the applicable
Canadian securities regulatory authorities. Materials filed with the
Canadian securities regulatory authorities are available electronically
without charge at www.sedar.com. These materials may also be obtained without charge from Kingsdale
Shareholder Services Inc., the depositary and information agent for the
Offer, by contacting them at 1-877-659-1818 (North American Toll Free
Number) or 1-416-867-2272 (outside North America).
Advisors and Counsel
Waterton has retained National Bank Financial Markets to act as its
financial advisor in connection with the Offer. Waterton's legal
counsel are Stikeman Elliott LLP and Allen & Overy LLP.
This press release does not constitute an offer to buy or the
solicitation of an offer to sell any of the securities of Chaparral.
Waterton encourages shareholders of Chaparral to read the formal Offer
and take-over bid circular and other accompanying offer documents (and
any amendments or supplements to any of the foregoing) when they are
available, as they will contain the full terms and conditions of the
Offer and other important information as well as detailed instructions
on how Chaparral shareholders can tender their Chaparral shares to the
Offer. This news release is not a substitute for these offer documents.
The Offer will be made in the United States in compliance with Section
14(e) of, and Regulation 14E under, the U.S. Securities Exchange Act of
1934, as amended and otherwise in accordance with the requirements of
Canadian law. Accordingly, the Offer will be subject to disclosure and
other procedural requirements, including with respect to the timetable
and settlement procedures that are different from those applicable
under U.S. domestic tender offer procedures and laws. For assistance in depositing Chaparral shares to the Offer, Chaparral
shareholders should contact Kingsdale Shareholder Services Inc., the
depositary and information agent for the Offer, at 1-877-659-1818
(North American Toll Free Number) or 1-416-867-2272 (outside North
Waterton is a leading mining-focused private equity fund dedicated to
developing high quality precious metals projects located in stable
jurisdictions. Waterton's cross-functional, fully-integrated, in-house
team of professionals have significant mining, financial and legal
expertise. Waterton's proactive approach to asset management,
significant sector knowledge and ability to leverage extensive industry
relationships has resulted in a strong track record of managing
investments in the precious metals sector.
If you have any questions, or need assistance in depositing your Shares
please contact the Depositary and Information Agent for the Offer:
Kingsdale Shareholder Services, Inc.
Toll Free (North America): 1-877-659-1818
Outside North America Call Collect: 1-416-867-2272
Bayfield Strategy, Inc.
Certain statements in the press release are forward-looking information
and forward-looking statements within the meaning of applicable
securities Laws (collectively, "forward-looking statements") which are
prospective in nature, and include statements relating to the timing,
term and benefits of the Offer. Forward looking statements are not
based on historical facts, but rather on current expectations and
projections about future events, and are therefore subject to risks and
uncertainties which could cause actual results to differ materially
from the future results expressed or implied by the forward looking
statements. These statements generally can be identified by the use of
forward looking words such as "may", "should", "will", "could",
"intend", "estimate", "plan", "anticipate", "expect", "believe" or
"continue", or the negative thereof or similar variations. Such
forward-looking statements are based on estimates and assumptions made
by Waterton in light of its experience and its perception of historical
trends, current conditions and expected future developments, as well as
other factors that Waterton believes is appropriate in the
circumstances, including the timing, and the terms and benefits of the
proposed Offer. Many factors could cause the actual results,
performance or achievements to differ materially from those expressed
or implied by the forward-looking statements, including, without
limitation, general business and economic conditions globally or in
particular geographic regions in which Chaparral conducts business, the
failure to meet certain conditions of the Offer, legislative and
regulatory changes or actions, claims asserted against Waterton or its
affiliates, competition, liquidity risk, changes in capital or
securities markets and interest rate and foreign currency fluctuations.
Such forward looking statements should therefore be construed in light
of such factors, and Waterton is not under any obligation, and
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.
SOURCE: Waterton Precious Metals Fund II Cayman, LP
For further information:
Bayfield Strategy, Inc.