TORONTO, July 30, 2012 /CNW/ - RX Gold & Silver Inc. (TSX-V: RXE) ("RX Gold" or the "Company") responded to the press release issued earlier today by US Silver
Corporation (TSX: USA) ("US Silver") rejecting the unsolicited cash offer by Hecla Mining Company
("Hecla") for US Silver. RX Gold is pleased that the board of
directors of US Silver has recommended that US Silver shareholders
reject the Hecla offer and instead vote in favour of the combination of
RX Gold and US Silver. Sprott Asset Management continues to support
the combination of RX Gold and US Silver.
Darren Blasutti, President & Chief Executive Officer of RX Gold stated,
"We believe the Hecla cash offer ignores the stated near-term value
creation opportunities available to US Silver shareholders through our
combination including (i) a stronger combined management team, (ii)
current capital re-investment to improve access and infrastructure at
the Galena mine, (iii) increased production later this year from the
Coeur area, (iv) exciting exploration results from the Calladay bulk
mining zone, and (v) participation in $10 million per year of expected
combination synergies. We expect these opportunities will contribute
to a significant reduction in the operating costs at the Galena mine in
the coming quarters and years. "
"Continued execution of this business plan, accretive M&A opportunities,
and a recovery in commodity prices and share trading multiples, will
generate significantly greater returns than the C$1.80 per share cash
offered by Hecla. The Hecla offer values US Silver's operating assets
at less than $2.00 per silver resource ounce compared to the current
silver price of $27.50 per ounce."
The board of directors of RX Gold unanimously recommends that the RX
Gold shareholders vote FOR the combination transaction at the upcoming
special meeting of the RX Gold shareholders on August 7, 2012. The
deadline for the deposit of proxies for the meeting by registered
shareholders of RX Gold is 5:00 p.m. (Toronto time) on August 2, 2012.
Non-registered shareholders should carefully follow the instructions
provided by their intermediary, including applicable deadlines, to
ensure their vote is counted.
Shareholders with questions or requiring more information with respect
to voting shares at the special meeting may contact RX Gold's proxy
solicitation agent, Laurel Hill Advisory Group, by email at
email@example.com or by telephone at 1-877-304-0211 (toll free
within Canada or the U.S.) or 1-416-304-0211 (for calls outside Canada
and the U.S.).
RX Gold Recent Production Highlights
Full year-end results for RX Gold are expected to be issued on or before
October 31st, 2012.
Mining ramp-up at the 100% owned Drumlummon Mine began January 15th,
2012. Production highlights for the period from January 1st through June 30, 2012 include:
Approximately 16,200 ounces of gold equivalent production, consisting of
approximately 12,100 ounces of gold and approximately 216,200 ounces of
silver, respectively. On a silver equivalent basis, reported production
was approximately 862,000 ounces.
Approximately 54,300 tons were milled at an estimated head grade of
0.246 oz./ton of gold and 4.71 oz./ton of silver with mill recoveries
for gold and silver of 91% and 84%, respectively.
Based on the preliminary unaudited financial results, the Company is
expected to report its first quarterly profit for the quarter ended
June 30, 2012.
About RX Gold & Silver Inc.
RX Gold is a gold and silver mining company focused on growth in North
America. Currently RX Gold is concentrating on continuing mining under
its current permits and expanding development at its 100%-owned
Drumlummon Mine. The Drumlummon Mine is a bonanza style low
sulphidation epithermal gold and silver deposit with historic
production of approximately one million ounces of gold equivalent. The
mine has never been fully exploited or explored and material that was
once considered waste is now potentially economic. In addition, RX Gold
has discovered a series of entirely new high-grade gold and silver
veins that remain open for expansion in three directions.
Cautionary Statement Regarding Forward-Looking Information
This news release contains "forward-looking information" within the
meaning of applicable securities laws. Forward-looking information
includes, but is not limited to, the Company's expectations intentions,
plans, and beliefs with respect to, among other things, the combination
of RX Gold and US Silver and the Drumlummon Mine. Often, but not
always, forward-looking information can be identified by
forward-looking words such as "anticipate", "believe", "expect",
"goal", "plan", "intend", "estimate", "may", and "will" or similar
words suggesting future outcomes, or other expectations, beliefs,
plans, objectives, assumptions, intentions, or statements about future
events or performance. Forward-looking information is based on the
opinions and estimates of the Company as of the date such information
is provided and is subject to known and unknown risks, uncertainties,
and other factors that may cause the actual results, level of activity,
performance, or achievements of the Company or its successors to be
materially different from those expressed or implied by such forward
looking information. This includes the ability to develop and operate
the Drumlummon property, risks associated with the combination of RX
Gold and US Silver, including the ability to achieve anticipated
synergies, risks associated with the mining industry such as economic
factors (including future commodity prices, currency fluctuations and
energy prices), failure of plant, equipment, processes and
transportation services to operate as anticipated, environmental risks,
government regulation, actual results of current exploration
activities, possible variations in ore grade or recovery rates,
permitting timelines, capital expenditures, reclamation activities,
social and political developments and other risks of the mining
industry. Although RX Gold has attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking information, there may be other factors
that cause results not to be as anticipated, estimated, or intended.
Readers are cautioned not to place undue reliance on such information.
By its nature, forward-looking information involves numerous
assumptions, inherent risks and uncertainties, both general and
specific, that contribute to the possibility that the predictions,
forecasts, and projections of various future events will not occur. The
Company undertakes no obligation to update publicly or otherwise revise
any forward-looking information whether as a result of new information,
future events or other such factors which affect this information,
except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE: RX Gold & Silver Inc.
For further information:
President and Chief Executive Officer