(All amounts are expressed in Canadian dollars, unless otherwise indicated)
VANCOUVER, Sept. 8, 2014 /CNW/ - Curis Resources Ltd. (TSX:CUV) ("Curis") announces that it has entered into a definitive arrangement agreement (the "Agreement") whereby Taseko Mines Limited (TSX:TKO, NYSE MKT:TGB) ("Taseko") will acquire all of the issued and outstanding common shares of Curis (the "Transaction").
The Transaction will be implemented by way of a statutory plan of arrangement and is subject to customary closing conditions, including approval by securityholders, court approval and regulatory approval. Assuming the timely receipt of such approvals, the transaction is expected to close in October 2014.
Taseko is an intermediate copper producing company with operations in British Columbia. Taseko's primary asset is a 75% interest in the Gibraltar Copper-Molybdenum Mine, which has an annual capacity of approximately 165 million pounds of Copper (100% basis). Taseko also has a 100% interest in the New Prosperity Gold-Copper and Aley Niobium projects. Curis is a mineral exploration and development company whose principal asset is the Florence Copper project ("Florence Copper"), an in situ copper recovery ("ISCR") project in central Arizona, USA, with 2.4 billion pounds in copper reserves.
Under the terms of the Agreement, each Curis shareholder will receive 0.438 of a Taseko common share for each Curis common share held, representing consideration of $1.055 per Curis share based on the 20-day volume-weighted average price ("VWAP") of the Taseko common shares for the period ending September 5, 2014. The consideration payable to Curis shareholders represents a 21% premium to Curis' 20-day VWAP and a 31% premium to Curis' 60-day VWAP, each for the period ending September 5, 2014 and based on Taseko's 20-day VWAP and 60-day VWAP during the same period. Following completion of the Transaction, Taseko will have approximately 222.1 million common shares outstanding, of which current Taseko shareholders will own approximately 88% and former Curis shareholders (other than Taseko) will own approximately 12%.
The Agreement provides for, among other things, a non-solicitation covenant on the part of Curis, subject to customary "fiduciary out" provisions that entitle Curis to consider and accept a superior proposal, a right in favour of Taseko to match any superior proposal and, in certain circumstances, the payment of a $3 million termination fee to Taseko.
Taseko has agreed to provide US$2 million of short-term financing by way of an unsecured convertible loan to Curis until the closing of the Transaction. The loan will be advanced in two equal tranches on October 15 and November 15 and will be convertible into Curis common shares, at the option of Taseko, at an exercise price of $0.90 per share. As of the date herein, Taseko owns 12,916,667 common shares of Curis, representing approximately 17.3% of Curis' common shares outstanding.
Curis Board of Directors Support for the Agreement and Fairness Opinion
A special committee of independent directors of Curis' board of directors (the "Independent Committee") was constituted to consider the Transaction. The Independent Committee received a fairness opinion from Paradigm Capital Inc. to the effect that as of the date thereof the consideration to be received by Curis shareholders under the Transaction is fair, from a financial point of view, to the Curis shareholders (other than Taseko).
The board of directors of Curis, acting on the recommendation of the Independent Committee and after consultation with its financial and legal advisors, unanimously approved the Agreement and unanimously recommends that Curis shareholders vote their common shares in favour of the Transaction.
Russell Hallbauer declared a conflict due to his role as CEO of Taseko, and therefore was not involved in the board of directors' decisions.
Completion of the Transaction will be subject to customary closing conditions, including receipt of the required approvals at a special meeting of Curis securityholders expected to be held in October 2014. The Transaction will be subject to the approval of (i) at least two-thirds of the votes cast by Curis shareholders and (ii) at least two-thirds of the votes cast by Curis shareholders and Curis optionholders voting together as a single class. Because Curis and Taseko are related parties, completion of the Transaction is also subject to "majority of the minority" approval under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), being a majority of the votes cast by shareholders other than Taseko and its CEO. Prior to executing the Agreement, the board of directors of Curis obtained a formal valuation (the "Valuation") from Deloitte LLP as required by MI 61-101. The Valuation was prepared under the supervision of the Independent Committee.
A management information circular providing a detailed description of the transaction will be mailed to shareholders of Curis in connection with the special meeting.
Benefits to Curis Shareholders
The Agreement represents numerous benefits to Curis shareholders, including access to existing financial resources to ensure the funding of Florence, an ownership stake in Gibraltar, a stable cash flowing asset, as well as significant growth potential from New Prosperity and Aley. Curis shareholders will further benefit from Taseko's enhanced trading liquidity and wide analyst coverage. The advancement of Florence through the permitting, construction and commissioning phases will be greatly aided by the depth and breadth of experience of Taseko's management and board of directors.
David Copeland, President and CEO of Curis stated, "With the announcement today of Taseko's all-share offer for Curis, I believe there is an opportunity for shareholders of Curis to benefit from both retained exposure to our world-class Florence Copper Project and from Taseko's operating success at the Gibraltar Copper-Molybdenum Mine. Curis shareholders will be able to participate in a producing company with a more diversified development portfolio stemming from the New Prosperity and Aley projects. Taseko is financially strong and will allow us to forego the future dilution Curis shareholders would have faced to develop Florence on our own. The town of Florence and the stakeholders in the area will be well-served by Taseko and its excellent operating and environmental track record."
Benefits to Taseko Shareholders
Through the acquisition of Curis, Taseko adds a late-stage world-class development project in a top-quality mining jurisdiction to its already robust pipeline of exploration and development projects. Florence is expected to have low, first quartile cash costs and a high return on invested capital. Taseko expects Florence's funding requirements through commissioning will not present a significant challenge. Once producing, Florence will represent a further step towards the well-diversified production base of a successful multi-asset producer.
Russell Hallbauer, President and CEO of Taseko stated: "The addition of the Florence Copper Project to Taseko's development pipeline is an exciting one - Florence is a quality project in a secure mining jurisdiction with a supportive local population, and we believe our board of directors and management have both the permitting and operational experience to advance to commissioning in a timely manner. Florence adds diversity to our robust pipeline of development projects, and we believe it will serve as a low cost, low-risk future operating asset. The Curis team on the ground in Florence will be valuable to the Taseko family as the project is developed."
Curis' financial advisor in relation to the Transaction is Paradigm Capital Inc. and its legal advisor is McCarthy Tétrault LLP. Taseko's financial advisor in relation to the Transaction is BMO Capital Markets and its legal advisor is Dentons LLP.
Curis is focused on the acquisition, development and operation of high-quality next generation copper properties in progressive jurisdictions around the world. Its current goal is to advance the 100%-owned Florence Copper project to production.
Florence Copper is in the final stages of permitting for the Phase 1 Production Test Facility ("PTF") for the in-situ copper recovery project in Arizona, USA. The PTF includes a 24-well in-situ recovery well field and a state of the art SX-EW plant that will produce copper cathode. The PTF will assist in the demonstration of the science and safety of the in-situ process and provide an opportunity for the public to fully engage and understand this modern copper extraction technology. Concurrently, Florence continues to advance engineering, testwork, environmental studies and permitting for Phase 2 commercial operations.
Florence Copper Mineral Reserves and Resources
|All Oxide in Bedrock|
|Category (at 0.05% TCu Cut-off)||Million Tons|| %TCu
|Billion lb Copper|
Based on 577,317 feet of drilling in 502 holes Mineral reserves are contained within the measured and indicated mineral resources.
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Contained metal in mineral resources and reserves do not have metallurgical recovery applied.
For further information on the 2103 Pre-Feasibility Study on the Florence Copper Project, see Curis news releases dated February 13, 2013 and March 26, 2013 and the technical report that is filed at www.sedar.com.
Headquartered in Vancouver, Canada, Taseko is the owner (75%) and operator of the Gibraltar Mine, the second largest open pit copper-molybdenum mine in Canada. Taseko also owns the New Prosperity Project, one of the largest undeveloped gold-copper deposits in the world. The Aley Niobium Project and Harmony Gold Project provide Taseko with a diverse project pipeline.
Both Taseko and Curis are affiliated with Hunter Dickinson Inc. ("HDI"), a diversified global mining company with a 25-year history of mineral development success.
The technical information on Curis has been reviewed and approved by David Copeland, P.Eng, Curis President and CEO, who is a qualified person. The technical information on Taseko has been reviewed and approved by John McManus, P.Eng, Chief Operating Officer, Taseko Mines Limited, who is a qualified person.
Curis will hold a conference call on September 9, 2014 at 11:30 am (Toronto) / 8:30 am (Vancouver):
Participant Toll-Free Dial-In Number: (844) 420-7671
Participant International Dial-In Number: (716) 247-5775
In order to join this conference call, all speakers and participants will be required to provide the Conference ID 2210089. Playback dial-in #: (855) 859-2056 or (404) 537-3406 and Conference ID 2210089, playback available for one week.
Forward Looking Statements
This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address exploration drilling, exploitation activities and events or developments that Curis expects are forward-looking statements. Although Curis believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Assumptions used by Curis to develop forward-looking statements include the following: the Transaction will successfully complete, the Florence Copper project will obtain all required environmental and other permits and all land use and other licenses for construction of the Production Test Facility and full commercial facilities, the Florence Copper project will achieve targeted production levels; studies and development of the Florence Copper project will continue to be positive; contracted parties will provide goods and/or services on the agreed timeframes; equipment necessary for construction and development will be available and will not incur unforeseen breakdowns; no material labour slowdowns or strikes will be incurred; plant and equipment will function as specified; geological or financial parameters will not necessitate future mine plan changes; and no geological or technical problems will occur. Factors that could cause actual results to differ materially from those in forward-looking statements include risks and uncertainties associated with the timely receipt of required shareholder, court and regulatory approvals in connection with the Transaction, fluctuations in market prices, exploitation and exploration successes, continuity of mineralization, uncertainties related to the ability to obtain necessary environmental, land use and other permits, approvals, licenses and title on a timely basis and delays due to third party opposition, changes in government policies regarding mining and natural resource exploration and exploitation, the final outcome of any lawsuits, the continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. For more information on Curis, investors should review Curis' continuous disclosure filings that are available at www.sedar.com.
SOURCE: Curis Resources Ltd.
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