VANCOUVER, Aug. 23 /CNW/ - Tagish Lake Gold Corp. (TSX-V: TLG) (the "Company" or "Tagish") announces that on August 20, 2010 the Company received a proposal (the "YSM Proposal") from YS Mining Company Inc. ("YS Mining") and its two shareholders, Yukon-Nevada Gold Corp. ("YNG") and Northwest Nonferrous International Investment Company Limited ("NWM"), to enter into a legally binding and enforceable memorandum of understanding ("MOU") which would provide for the formation of a new company ("Newco") that would own the Company's Mt. Skukum property and YNG's Ketza River gold property located in the Yukon.
The principal terms of the YSM Proposal are as follows:
- NWM would purchase additional shares of YS Mining for $60.0 million
- YS Mining would acquire, for shares in YS Mining, all of the issued
and outstanding shares of Ketza River Holdings Ltd., a wholly-owned
subsidiary of YNG which owns the Ketza River property;
- following completion of the two transactions referred to above, YS
Mining and Tagish would merge or otherwise combine their respective
businesses to form Newco pursuant to a plan of arrangement under the
Business Corporations Act (British Columbia), at share exchange ratios
to be negotiated and agreed upon by the parties having regard to the
respective fair market values of YS Mining and Tagish, as confirmed
by an independent fairness opinion;
- Newco would apply to become a publicly traded company prior to
completion of the contemplated transactions;
- the composition of the Board of Directors of Newco would be negotiated
and agreed upon by the parties;
- the Board of Directors of Newco would include Messrs. Sun Feng,
Graham Dickson and Robert Baldock, who have substantial experience in
developing, constructing and operating multiple mines in the Yukon;
- Newco would emerge from creditor protection under the Companies'
Creditors Arrangement Act free of debt and with working capital of
not less than $55.0 million;
- the parties would use their respective best efforts to negotiate a
comprehensive agreement incorporating the terms and conditions of
- YS Mining would have the right to terminate the MOU at any time if
there were to occur a change of control of Tagish; and
- the completion of the transactions provided for in the MOU (the
"Proposed Transactions") would be subject to all necessary regulatory
approvals and consents.
YS Mining has advised the Company that although the MOU has yet to receive final approval from the full Board of YNG, the MOU is to be regarded as an offer by YS Mining, YNG and NWM to enter into a transaction with the Company on substantially the terms set out therein.
The Special Committee of the Board of Directors of the Company (the "Special Committee") has met, together with the Company's legal counsel, to review and consider the YSM Proposal, and has had several discussions with representatives of YS Mining relating thereto.
Although considerable work remains to be done and a number of issues need to be resolved before the Special Committee will be able to determine whether or not the YSM Proposal is in the best interests of the Company and its stakeholders, the Special Committee believes that the YSM Proposal potentially provides Tagish shareholders and creditors with a very attractive alternative to the offer made by New Pacific Metals Corp. on July 21, 2010 (the "New Pacific Offer").
The Special Committee will, together with the Company's financial and legal advisors, continue to investigate and evaluate the YSM Proposal. The Special Committee intends to discuss and negotiate the terms of the MOU with YS Mining and its representatives and to report to shareholders on future developments as they unfold.
It is expected that the Board of Directors of Tagish will issue a further circular with respect to the New Pacific Offer on or before August 25, 2010.
About Tagish Lake Gold Corp.
Tagish Lake Gold Corp. explores for and develops high grade gold-silver mineral deposits in the Yukon Territory of Canada. The Company is currently focused on its wholly owned, 178 km2 Skukum Mineral District located 80 km by road south of Whitehorse. The Skukum Mineral District hosts the Skukum Creek gold-silver deposit, the Goddell Gully and the Mt. Skukum gold deposits.
This news release contains forward-looking statements (within the meaning of applicable securities laws) relating to the Company. Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "would", "may" and other similar expressions. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. Forward-looking information in this news release includes, without limitation, statements made in respect of the Proposed Transactions.
All forward-looking statements in this news release are qualified by these cautionary statements. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, should not be unduly relied upon and will not necessarily be accurate indications of whether or not such results will be achieved. Factors that could cause actual results to differ materially from the results discussed in the forward-looking statements, include, but are not limited to any of YS Mining, YNG or NWM deciding not to proceed with the Proposed Transactions on the terms set out in the YSM Proposal, the inability or unwillingness of the parties to agree upon the terms of the Proposed Transactions, the failure of the parties to obtain all required approvals or consents, and the inability of Tagish to obtain adequate financing to continue to fund its operations.
Forward-looking information is based on various material factors or assumptions, which are based on information currently available to the Company.
Although the forward-looking statements contained in this news release are based upon what management believes are reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements.
The forward-looking statements contained in this news release are made as of the date of this news release and should not be relied upon as representing the Company's views as of any date subsequent to the date of this news release. The Company assumes no obligation to update or revise these forward-looking statements to reflect new information, events, circumstances or otherwise, except as required by applicable law.
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 TAGISH LAKE GOLD CORP.
For further information: For further information: Tagish Gold Lake Corp., John Resing, Chair of Special Committee, 408 - 688 West Hastings Street, Vancouver, BC, V6B 1P1, T: (425) 454-7992