TORONTO, Dec. 11, 2013 /CNW/ - Roxgold Inc. ("Roxgold" or "the Company") (TSXV: ROG) is pleased to announce that it has entered into a definitive agreement with XDM Royalty Corp. ("XDM") providing for the acquisition of all of the outstanding securities of XDM by Roxgold (the "Acquisition"). Subject to further adjustments at closing, XDM shareholders will receive approximately 0.175 Roxgold common shares for every one common share of XDM (the "Exchange Ratio") which represents a deemed issue price of approximately $0.55 per Roxgold share. Roxgold expects to receive net proceeds totaling approximately $7.5 million after transaction and severance costs.
Based upon the current Exchange Ratio, the Company anticipates issuing approximately 14 million common shares as consideration for the Acquisition, and reserving approximately an additional 1,850,000 common shares for issuance upon exercise of the existing convertible securities of XDM. Roxgold holds lock-up and share voting support agreements from XDM's shareholders totalling approximately 43.2% of XDM's outstanding common shares.
Mr. Oliver Lennox-King serves as the Chairman of both Roxgold and XDM. Accordingly, each of Roxgold and XDM formed a special committee comprised entirely of independent directors to consider and approve the terms of the Acquisition. Raymond James Ltd. was retained by Roxgold to evaluate the transaction and rendered a positive fairness opinion on the Acquisition, from a financial point of view. Haywood Securities Inc. was retained by XDM to evaluate the transaction and rendered a positive fairness opinion on the Acquisition.
"We are very pleased to announce this latest milestone in Roxgold's development," said John Dorward, President and Chief Executive Officer. "This transaction will provide Roxgold with additional capital to advance its strategic development goals, including early stage site works at Yaramoko upon reaching a construction decision based on the completion of the Feasibility Study and obtaining relevant permits in the first half of next year."
The proposed Acquisition remains subject to, among other things, the receipt of applicable shareholder and regulatory approvals, including the approval of the TSX Venture Exchange.
"This transaction represents an attractive value proposition for both companies and an efficient mechanism to deliver the value of XDM's net working capital to shareholders," commented Kevin Feeney, Chief Financial Officer and Company Secretary for XDM.
Roxgold is a gold exploration and development company with its key asset, the high grade, 100% owned Yaramoko exploration permit located in the mineral-rich Houndé greenstone region of Burkina Faso, West Africa. The Company recently announced a Preliminary Economic Assessment in September 2013 which demonstrated attractive potential economics. The Company is currently completing a Feasibility Study which is expected to be completed in the second quarter of 2014. Roxgold trades on the TSX Venture Exchange under the symbol ROG.
Forward Looking Statements
This news release may contain forward-looking statements. These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. Forward-looking statements in this news release include statements that describe the potential Acquisition, the Company's future plans for the exploration and development of the 55 Zone and timing of future announcements, and include words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. The assumptions upon which forward looking statements in this news release are made include the reasonable assumptions of management with respect to the potential Acquisition and the receipt of all applicable shareholder and regulatory approvals. Actual results relating to such future events and conditions could differ materially from those currently anticipated in such statements for many reasons such as: changes in management, changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments and other matters discussed in this news release. The Company has not made a construction or production decision on the Yaramoko Gold Project at this time. Further, if and when the Company makes any production decision, it will disclose the basis of such decision in accordance with the requirements of National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Roxgold Inc.
For further information:
Annelise Burke, Manager, Investor Relations & Corporate Communications