TORONTO, Jan. 24, 2014 /CNW/ - Wesdome Gold Mines Ltd. ("Wesdome") (TSX:WDO) and Moss Lake Gold Mines Ltd. ("Moss Lake") (TSXV:MOK) are pleased to announce that they have entered into a
business combination agreement (the "Agreement"), pursuant to which Wesdome will acquire (the "Transaction") all of the issued and outstanding common shares of Moss Lake (the "Moss Lake Shares") that it does not already own. Wesdome currently owns 26,708,586 Moss
Lake Shares, representing approximately 57.6% of the issued and
outstanding Moss Lake Shares. The Transaction is subject to minority
shareholder approval and to the other conditions set out below.
Pursuant to the terms of the Agreement, Moss Lake shareholders (the "Moss Lake Shareholders") (other than Wesdome) will receive one common share of Wesdome (a "Wesdome Share") for every 3.85 Moss Lake Shares held (the "Exchange Ratio").
The Transaction will be completed by way of a three-cornered
amalgamation with a new subsidiary of Wesdome. Following completion of
the Transaction, it is expected that Moss Lake will be a private
company wholly-owned by Wesdome.
Based on the currently issued and outstanding Moss Lake Shares as of the
date of this announcement, there will be approximately 5,279,505
Wesdome Shares issued to Moss Lake Shareholders as consideration for
the Moss Lake Shares not already owned by Wesdome, representing
approximately 5% of Wesdome's currently issued and outstanding shares
on a non-diluted basis. Following completion of the Transaction, former
Moss Lake Shareholders (other than Wesdome) will own approximately
4.75% of the issued and outstanding Wesdome Shares on a non-diluted
basis, based on their current shareholdings in Moss Lake. Pursuant to
the Agreement, it is also expected that all outstanding stock options
of Moss Lake will be converted into options to acquire Wesdome Shares,
with the number of Wesdome options and the exercise price thereof being
calculated based on the Exchange Ratio.
The board of directors of Moss Lake (the "Moss Lake Board") formed a committee of independent directors (the "Moss Lake Independent Committee") to consider the Transaction. Based on the recommendation of the Moss
Lake Independent Committee, directors at a meeting of the Moss Lake
Board unanimously recommended that Moss Lake Shareholders vote in
favour of the Transaction.
Directors and officers of Moss Lake have entered into voting support
agreements with Wesdome pursuant to which each such party has agreed to
vote in favour of the Transaction. Such locked-up Moss Lake Shares
represent approximately 9% of the issued and outstanding Moss Lake
Shares on a non-diluted basis.
Directors at a meeting of the Wesdome board unanimously approved the
The purpose of the Transaction is to consolidate important gold assets
under one corporate roof for clarity and cost effectiveness moving
"The Transaction brings a significant low-grade open pit resource to
Wesdome" commented Rowland Uloth, Chief Executive Officer of Wesdome.
"While Wesdome controlled the deposit through its ownership of Moss
Lake equity, the Transaction brings 100% of the deposit into the
Wesdome resource statement, reduces overall overhead, provides
immediate liquidity for Moss Lake Shareholders and significantly
reduces the investment confusion surrounding the way to participate in
future exploration at Moss Lake. We welcome the Moss Lake Shareholders
to the Wesdome family and look forward to participating with them in
the future exploration and development at Moss Lake."
"The conversion of Moss Lake into a wholly-owned subsidiary of Wesdome
is an excellent opportunity for our shareholders to get exposure to an
operating mine and participate in a cash-flowing company", commented
John Hilland an independent director of Moss Lake. "The current
financial markets have made it difficult to continue with our
exploration efforts as an independent company. We believe that the
Moss Lake deposit is a significant resource that could easily become a
mine in the right investment environment. The amalgamation with Wesdome
ensures that our shareholders will continue to have exposure to this
excellent property while also participating in an active producer with
25 years of continued production in a stable political area."
Other Aspects of the Transaction
Pollitt & Co. acted as financial advisor to Wesdome and Jennings Capital
Inc. acted as financial advisor to Moss Lake in respect of the
Transaction and provided the Moss Lake Independent Committee and Moss
Lake Board with its opinion that, as of the date of the Agreement and
subject to review of final documentation, the consideration to be
received by the holders of Moss Lake Shares under the Transaction is
fair, from a financial point of view, to such holders. A copy of the
fairness opinion will be included in the information circular to be
sent to Moss Lake Shareholders for the special meeting to be called to
consider the Transaction.
Wesdome currently owns approximately 57.6% of the issued and outstanding
Moss Lake Shares. As such, Wesdome is considered a "related party" of
Moss Lake in respect of the Transaction and the Transaction is
considered to be a "business combination" for Moss Lake pursuant to
Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and the policies of the TSX Venture Exchange (the "TSXV"). Moss Lake has determined that there is an exemption available from
the formal valuation requirements of MI 61-101 applicable to business
combinations because no securities of Moss Lake are listed or quoted
for trading on a senior stock exchange.
Conditions to Closing
Completion of the Transaction is subject to a number of conditions,
including: (i) a favourable vote of at least (A) 66 2/3% of the Moss
Lake Shareholders; and (B) a simple majority of the votes cast by
minority Moss Lake Shareholders, voted at a special meeting of
shareholders (the "Moss Lake Meeting") expected to be held on April 8, 2014; (ii) satisfactory completion of
due diligence by Wesdome and Moss Lake; and (iii) other standard
Terms and Conditions of the Transaction
The terms and conditions of the Agreement will be disclosed in more
detail in Moss Lake's management information circular, which is
expected to be filed and mailed to Moss Lake Shareholders in March
Details regarding these and other terms of the Transaction are set out
in the Agreement, which will be available on SEDAR at www.sedar.com.
Wesdome is in its 26th year of continuous mining operations in Canada. It currently has two
producing gold mines in Wawa, Ontario and owns the Kiena Complex in Val
d'Or, Québec. Wesdome currently has approximately 105.8 million Wesdome
Shares issued and outstanding which trade on the Toronto Stock Exchange
under the symbol "WDO".
About Moss Lake
Moss Lake, currently a 57.6%-owned subsidiary of Wesdome, was created in
1994 to consolidate ownership of the Moss Lake gold deposit. Moss Lake
currently has approximately 47 million Moss Lake Shares issued and
outstanding which trade on the TSXV under the symbol "MOK".
Forward Looking Statements
This press release includes certain statements that constitute
"forward‐looking statements" and "forward‐looking information" within
the meaning of applicable securities laws (collectively, "forward‐looking statements"). These statements include statements regarding Wesdome's or Moss
Lake's intent, or the beliefs or current expectations of Wesdome's or
Moss Make's directors and officers. Such statements are typically
identified by words such as "believe", "anticipate", "estimate",
"project", "intend", "expect", "may", "will", "plan", "should",
"would", "contemplate", "possible", "attempts", "seeks" and similar
expressions. Forward‐looking statements may relate to Wesdome's or Moss
Lake's future outlook and anticipated events or results.
By their very nature, forward‐looking statements involve numerous
assumptions, inherent risks and uncertainties, both general and
specific, and the risk that predictions and other forward‐looking
statements will not prove to be accurate. Do not unduly rely on
forward‐looking statements, as a number of important factors, many of
which are beyond Wesdome's or Moss Lake's control, could cause actual
results to differ materially from the estimates and intentions
expressed in such forward‐looking statements. These factors include,
but are not limited to: (i) the inability of Moss Lake to obtain
approval of the Transaction by the Moss Lake Shareholders at the Moss
Lake Meeting; and (ii) the occurrence of any other event, change or
circumstance that could give rise to the termination of the Agreement,
or the delay of consummation of the Transaction or failure to complete
the Transaction for any other reason.
Forward‐looking statements speak only as of the date those statements
are made. Except as required by applicable law, neither Wesdome nor
Moss Lake assume any obligation to update, or to publicly announce the
results of any change to, any forward‐looking statement contained
herein to reflect actual results, future events or developments,
changes in assumptions or changes in other factors affecting the
Neither the TSX, TSXV nor its Regulation Services Provider (as that term
is defined in the policies of the TSXV) accepts responsibility for the
adequacy or accuracy of this press release.
SOURCE: Wesdome Gold Mines Ltd.
For further information:
Wesdome Gold Mines Ltd.
President and Chief Executive Officer
8 King Street East, Suite 1305
Toronto, Ontario M5C 1B5
Toll Free: 1-866-4-WDO-TSX
Tel: 416-360-3743, Fax: 416-360-7620
Email: firstname.lastname@example.org, Website: www.wesdome.com
Moss Lake Gold Mines Ltd.
8 King Street East, Suite 1305
Toronto, Ontario M5C 1B5
Toll Free: 1-866-4-WDO-TSX
Phone: 416-360-3743, Fax: 416-360-7620
Email: email@example.com, Website: www.mosslakegold.com