/NOT FOR DISTRIBUTION IN THE UNITED STATES/
- Golden China's financial advisor Genuity Capital Markets advises that
the takeover offer consideration is fair from a financial point of
view to the Golden China shareholders.
- The takeover offer has the unanimous support of the Golden China
board of directors.
- The takeover offer has received support from a number of major
shareholders of Golden China.
- Break fee increased to C$1,000,000.
TORONTO, Sept. 7 /CNW/ - Sino Gold Mining Limited ("Sino Gold") (ASX:
SGX, SEHK:1862) and Golden China Resources Corporation ("Golden China") (TSX/
ASX: GCX) today announced that they have entered into the definitive Support
Agreement (the "Support Agreement") as previously contemplated in the Letter
Agreement signed on 13 August 2007 regarding the proposed offer (the "Offer")
by Sino Gold for all of the outstanding common shares of Golden China.
Under the Offer, Golden China shareholders will receive one Sino Gold
share for every 4.5 Golden China common shares they hold. The proposed terms
of the Offer remain unchanged from those announced on August 13, 2007.
Golden China has received a fairness opinion from its financial advisor
Genuity Capital Markets that the Offer consideration is fair from a financial
point of view to the Golden China shareholders. The Offer has the unanimous
support of the Golden China board of directors.
Sino Gold has also received positive feedback from a number of major
shareholders of Golden China regarding the Offer:
- Baker Steel Capital Managers (who own approximately 5.4%) have
indicated verbal support for the Offer and have advised Sino Gold
that unless there is any material change in circumstances will be
tendering their shares. Baker Steel currently owns shares in
- Gold2000 (who own approximately 6.1%) have indicated verbal support
for the Offer and have advised Sino Gold that unless there is any
material change in circumstances will be tendering their shares.
Gold2000 currently owns shares in Sino Gold.
- As previously announced Sino Gold has also entered into lock-up
agreements with Peter Secker and with Stephen Everett, who hold in
aggregate approximately 5.3% of the currently outstanding
Golden China common shares.
Details of the Support Agreement and the Offer
The Support Agreement provides for the making of the Offer by Sino Gold
and support of the Offer by Golden China. A copy of the Support Agreement will
be filed shortly on SEDAR at www.sedar.com.
Under the proposed Offer, Golden China shareholders will receive 1 Sino
Gold ordinary share for every 4.5 Golden China common shares they own. The
Offer implies a value for each Golden China share of A$1.33 based on the
closing price of Sino Gold shares on ASX of A$5.97 on 6 September 2007 (the
"Implied Offer Price"). The Implied Offer Price represents a premium of 39% to
the closing price of Golden China shares on the TSX of C$0.85 (A$0.95) on 10
August 2007, the last trading date prior to announcement of the Offer.
In addition to the proposed Offer for Golden China's common shares, the
Support Agreement contemplates that holders of unexercised options (including
options held by directors, officers and employees of Golden China) and
unexercised warrants of Golden China would be offered the opportunity to amend
their options and warrants to receive replacement options and warrants to
acquire ordinary shares of Sino Gold, with the number of underlying shares
and/or exercise price adjusted to reflect the exchange ratio under the Offer
of one Sino Gold ordinary share for every 4.5 Golden China common shares.
In the Support Agreement, Golden China has agreed, among other things,
that it will not directly or indirectly solicit any third party with respect
to alternative transactions to the Offer. If Golden China terminates the
Support Agreement in order to enter into an agreement with respect to a bona
fide unsolicited superior proposal that Sino Gold fails to match, a
C$1,000,000 "break" fee will be payable by Golden China to Sino Gold.
The Offer is not expected to be made in the United States.
Conditions of the Offer
As set out in the Support Agreement, the Offer is expected to be subject
to certain conditions, including a 90% minimum acceptance condition; receiving
regulatory approvals on satisfactory terms; and no material adverse changes or
other material adverse events occurring in relation to Golden China. It is
expected that formal documentation for the Offer (a takeover bid circular from
Sino Gold and a Golden China directors' circular) would be sent to Golden
China shareholders in October 2007. In the event of the successful completion
of the Offer, Sino Gold and Golden China expect to seek to terminate the
listing of the Golden China common shares on the TSX and of the Golden China
common share CDIs on the ASX.
In addition, subject to receiving certain required regulatory approvals,
Sino Gold has agreed to subscribe for 5,882,352 Golden China common shares at
a price of C$0.85 per share on a private placement basis, to assist Golden
China with its operations. This will result in Sino Gold owning approximately
9.5% of the issued and outstanding Golden China common shares (including these
Golden China common shares to be issued to Sino Gold).
About Sino Gold (ASX: SGX, SEHK: 1862)
Sino Gold has been active in China since 1996.
The Company owns 82% of the Jinfeng gold mine in Guizhou Province,
southern China. Jinfeng will be the one of the largest gold mines in China
when the project achieves planned initial production. Sino Gold is determined
to increase Jinfeng's gold production to optimal levels as quickly as
The 95%-owned White Mountain project in Jilin Province, northeast China,
is on-track to become Sino Gold's next mine. Development is planned to
commence during the September 2007 quarter following receipt of the Provincial
Sino Gold has demonstrated capability to gain approvals for, and to
successfully develop, gold projects in China. Sino Gold is a growth gold
company that is actively pursuing a discovery and acquisition strategy. With a
"first mover" advantage, it holds a strong competitive position in China.
The above summary is sourced from Sino Gold's public disclosure.
About Golden China Resources (TSX and ASX: GCX)
Golden China's shares are listed on the main boards of both the Toronto
Stock Exchange and as CDIs on the Australian Securities Exchange. Golden
China's major assets consist of:
- The 95%-owned Beyinhar project is located in the Chinese province of
Inner Mongolia, some 325 km northeast of the capital city, Hohhot.
The project lies within a productive orogenic belt hosting several
skarn, orogenic/mesothermal veins and porphyry copper-gold deposits.
Recent drilling intercepts at Beyinhar include 68 metres at 5.3g/t
gold from 66 metres. This indicates that Beyinhar hosts a primary
sulphide deposit in addition to a near surface, bulk-mineable oxide
and heap leachable gold deposit with a continuous high-grade zone. In
January 2007, Golden China announced that it had identified an
initial Mineral Resource consisting of a Measured Resource of
4.7 million tonnes at 1.00g/t gold, 12.8 million tonnes at 0.78g/t
gold, for combined Measured and Indicated of 17.6 million tonnes at
0.84g/t gold containing 475,000 ounces and an Inferred Resource of
7.5 million tonnes at 0.54g/t gold for 130,000 ounces. The resource
estimate was undertaken by Mario E. Rossi, of GeoSystems
International, Inc. ("GSI"), a qualified person as defined by
NI 43-101, based on the results from a drilling program that was
undertaken in 2004-2006. On April 27, 2007, Golden China announced
the results of a NP43-101 compliant Preliminary Assessment of the
Beyinhar Gold Project Inner Mongolia, People's Republic of China by
Kappes Cassiday Australia, and Associates Pty Ltd (the "Scoping
Study") which suggests the project's ability to initially produce
100,000 ounces per year for a low cash cost per production ounce of
between US$260 and US$280, with capital expenditures of only
US$29 million. A copy of the Scoping Study is available on the
company's website (http://www.goldenchina.ca) and on SEDAR
- Golden China's 99.5% owned BioGold Facility located in Shandong
Province includes a CIL plant, a bacterial oxidation (BACOX(C))
plant, a base metal flotation circuit, 51% of a gold refinery, and a
seat on the Shanghai Gold Exchange. The facility purchases gold
concentrates from a number of mining operations and produces about
100,000 ounces of 99.99% gold bullion annually. An expansion to the
BACOX(C) plant is currently underway, which is planned to double that
plant's processing capacity.
- The 70%-owned Nibao project is located in western Guizhou Province
within the Golden Triangle of southern China. In September 2006,
Golden China announced that it had identified an initial Mineral
Resource consisting of a Measured Resource of 2.9 million tonnes at
3.54g/t gold containing 330,000 ounces, an Indicated Resource of
3.92 million tonnes at 1.72g/t gold containing 217,000 ounces and an
Inferred Resource of 6.5 million tonnes at 1.46g/t gold, containing
305,000 ounces of gold. Golden China's ownership of the project is
expected to increase to 84% on a decision to mine. The resource
estimate was undertaken by Scott Wilson Roscoe Postle Associates Inc.
(Scott Wilson RPA) based on drilling assay results to June 25, 2006
of 410 drill holes comprising 41,600 metres.
- Golden China has a minority ownership interest in the Gold Ridge Mine
in the Solomon Islands through its approximately 19.3% equity holding
in Australian Solomon's Gold (TSX: SGA).
The above summary is sourced from Golden China's public disclosure.
The information in this release that relates to Exploration Results,
Mineral Resources or Ore Reserves of Sino Gold has been approved for release
by Mr Phillip Uttley (FAusIMM), who is Sino Gold's Chief Geologist and has
sufficient experience in relation to the style of mineralisation and type of
deposit under consideration to qualify as a Competent Person as defined by the
"Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves" (The JORC Code 2004 Edition). JORC is a 'recognized code and
FAusIMM is a recognized designation', under NI 43-101. Mr Uttley has consented
to inclusion of this information in the form and context in which it appears.
The information contained in this release that relates to Exploration
Results, Mineral Resources or Ore Reserves of Golden China is based on
NI-43-101 compliant reports as well as information compiled by Mr. Peter
Secker, BSc (Hons) Mining Enginering, M Aus IMM, the company's Vice President
of Exploration and Development. He has sufficient experience relevant to the
style of mineralization and types of deposits as well as to the activity that
he is undertaking to qualify as a competent person as defined by the
"Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves" (The JORC Code 2004 Edition). Mr. Secker has consented to the
inclusion in this release of information in the form and context in which it
Cautionary Statement on Forward-Looking Information
Certain information included in this release, including any information
as to future financial or operating performance and other statements that
express expectations or estimates of future performance, constitute
"forward-looking statements". The words "expect", "will", "intend", "estimate"
and similar expressions identify forward-looking statements. Forward-looking
statements are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by management of Sino Gold and Golden China
(collectively, the "Companies"), as applicable, are inherently subject to
significant business, economic and competitive uncertainties and
contingencies. The Companies caution the reader that such forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause the actual financial results, performance or achievements of
each of the Companies, as applicable, to be materially different from their
respective estimated future results, performance or achievements expressed or
implied by those forward-looking statements and the forward-looking statements
are not guarantees of future performance. These risks, uncertainties and other
factors include, but are not limited to: changes in the worldwide price of
gold or certain other commodities (such as fuel and electricity) and other
currencies; changes in U.S. dollar interest rates or gold lease rates; risks
arising from holding derivative instruments; ability to successfully integrate
acquired assets; legislative, political or economic developments in the
jurisdictions in which the Companies carry on business; operating or technical
difficulties in connection with mining or development activities; employee
relations; availability and increasing costs associated with mining inputs and
labour; the speculative nature of exploration and development, including the
risks of diminishing quantities or grades of reserves, adverse changes in our
credit rating, contests over title to properties, particularly title to
undeveloped properties; and the risks involved in the exploration, development
and mining business. These factors are discussed in greater detail in the
Companies respective statutory releases filed with the Australian securities
regulatory authorities and in Golden China's most recent Annual Information
Form filed with the Canadian provincial securities regulatory authorities.
Each of the Companies disclaim any intention or obligation to update or
revise any forward-looking statements whether as a result of new information,
future events or otherwise, except as expressly required by applicable law.
THE TSX AND ASX HAVE NOT REVIEWED AND DO NOT ACCEPT RESPONSIBILITY FOR
THE ADEQUACY OR ACCURACY OF THE RELEASE.
For further information:
For further information: Investor Enquiries: Jake Klein, CEO or Roger
Howe, Investor Relations, +61 2 8259 7000, firstname.lastname@example.org; Media
Enquiries: Kate Kerrision, +61 2 6746 3221, email@example.com; Or visit
the Sino Gold website www.sinogold.com.au; For further information regarding
Golden China please contact: Investor Enquiries: Greg Starr, President & CEO,
+61 2 9252 8055, firstname.lastname@example.org or Garry Stein, Vice President & Chief
Investment Officer, (416) 366-8818 Ext. 230, email@example.com; Media
Enquiries: Renmark Financial Communications Inc.: Barbara Komorowski, (514)
939-3989, firstname.lastname@example.org Or visit the Golden China website