TORONTO, June 1 /CNW/ - Wesdome Gold Mines Ltd. (WDO-T) ("Wesdome") and
Western Québec Mines Inc. (WQM-T) ("WQM") are pleased to announce the
execution of a definitive merger agreement (the "Merger Agreement") pursuant
to which they have agreed to combine their businesses (the "Merger").
The Merger will be carried out by way of a plan of arrangement under the
Companies Act (Québec), pursuant to which each common share in the capital of
WQM (each a "WQM Share") will be exchanged for 1.45 common shares in the
capital of Wesdome (each a "Wesdome Share"). The shareholders of WQM (the "WQM
Shareholders") will become shareholders of Wesdome (the "Wesdome
Shareholders") and WQM will become a wholly-owned subsidiary of Wesdome.
Also in connection with the Merger and pursuant to the Merger Agreement,
all outstanding stock options issued by WQM will be assumed by Wesdome. Such
securities, which were originally exercisable into WQM Shares, will be
exercisable into Wesdome Shares, the number of Wesdome Shares and the exercise
price thereof being adjusted accordingly. In addition, it is intended that
following the Merger, the $1,334,000 aggregate principal amount of 6.5% senior
secured notes maturing on November 8, 2007 will be redeemed by WQM in
accordance with their terms.
Closing of the Merger is subject to customary closing conditions and
regulatory approvals, including the approval of the Toronto Stock Exchange. In
addition, the Merger must be approved by two-thirds of the votes cast by
Wesdome Shareholders and 75% of the votes cast by WQM Shareholders, including
approval by a majority of Wesdome and WQM disinterested shareholders.
Completion of the Merger is expected to occur following special shareholder
meetings of both companies (collectively, the "Meetings") intended to be held
on June 28, 2007.
The Merger will combine the businesses of Wesdome and WQM to create a
single gold mining company, which will be operated as Wesdome after completion
of the Merger. Wesdome will have approximately 96,987,301 Wesdome Shares
outstanding and an expected market capitalization of approximately
$135.7 million. Its head office will be in Toronto.
As at May 25, 2007, WQM owned approximately 33% of the outstanding
Wesdome Shares. In addition, some of the officers and directors of WQM are
also officers and directors of Wesdome. However, to the knowledge of WQM, no
party who is a director or senior officer of WQM, a person or company that
beneficially owns or exercises control or direction over more than 10% of the
WQM Shares or is otherwise a "related party" of WQM, beneficially owns or
exercises control or direction over more than 5% of the Wesdome Shares.
From the perspective of WQM, the Merger does not constitute a "business
combination" or a "related party transaction" for the purposes of Ontario
Securities Commission Rule 61-501 - Insider Bids, Issuer Bids, Business
Combinations and Related Party Transactions ("Rule 61-501"), but does
constitute a "going private transaction" for the purposes of Regulation Q-27
of the Autorité des marchés financiers du Québec entitled "Respecting
Protection of Minority Securityholders in the Course of Certain Transactions"
From the perspective of Wesdome, the issuance of Wesdome Shares to
certain directors, senior officers and other insiders of Wesdome, including
WQM, will constitute a "related party transaction" for the purposes of Rule
61-501 and Regulation Q-27. However, as the only non-cash consideration
involved in the Merger are the WQM Shares being acquired by Wesdome and the
Wesdome Shares being issued in exchange, Wesdome has determined that no formal
valuation is required to be prepared of such non-cash consideration pursuant
to Rule 61-501 as (i) each of WQM and Wesdome is a reporting issuer and there
is a published market in respect of each of the WQM Shares and the Wesdome
Shares, (ii) neither Wesdome nor, to the knowledge of Wesdome, WQM, has
knowledge of any material undisclosed information concerning Wesdome or its
securities, (iii) that the circular prepared in connection with the required
shareholders' meetings (the "Circular") contains a statement to the effect set
out in (ii) above, and (iv) the Circular describes the effect of the Merger on
direct or indirect voting interests of the related parties.
WQM and Wesdome made application to the Autorité des marchés financiers
(the "AMF") for an order exempting WQM and/or Wesdome from the requirement in
Regualtion Q-27 to obtain a formal valuation of the WQM Shares or the Wesdome
Shares in connection with the Merger and received the exemption order on
May 23, 2007.
Each of Wesdome and WQM will be subject to (or in the case of WQM, will
voluntarily comply with) the minority approval requirements of the Rules in
connection with the Merger.
Neither Wesdome nor, to the knowledge of Wesdome, WQM, has knowledge of
any material information concerning Wesdome or its securities that has not
been generally disclosed.
Additional information about the Merger will be provided to shareholders
in the meeting materials to be circulated in advance of the Meetings and filed
on SEDAR at www.sedar.com.
This news release contains "forward-looking information" which may
include, but is not limited to, statements with respect to the future
financial or operating performance of the Company and its projects. Often, but
not always, forward-looking statements can be identified by the use of words
such as "plans", "expects", "is expected", "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. Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements. Forward-looking statements contained herein are
made as of the date of this press release and the Company disclaims any
obligation to update any forward-looking statements, whether as a result of
new information, future events or results or otherwise. There can be no
assurance that forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those anticipated in
such statements. The Company undertakes no obligation to update
forward-looking statements if circumstances, management's estimates or
opinions should change, except as required by securities legislation.
Accordingly, the reader is cautioned not to place undue reliance on
For further information:
For further information: Donovan Pollitt, VP Corporate Development,
Wesdome Gold Mines Ltd.; Barry Smith, P.Eng, President, Western Québec Mines
Inc.; 8 King St. East, Suite 1305, Toronto, ON, M5C-1B5, Toll Free:
1-866-4-WDO-TSX, Phone: (416) 360-3743, Fax: (416) 360-7620, Email:
email@example.com, Website: www.wesdome.com, Email:
firstname.lastname@example.org, Website: www.westernquebecmines.com