Vaaldiam Mining Inc. ("Vaaldiam" or the "Company") (TSX:VAA) has
entered into an agreement (the "Arrangement Agreement") under which
BCKP Limited, a private company organized under the laws of the
Cayman Islands ("BCKP"), has conditionally agreed to acquire all of
the outstanding common shares of Vaaldiam (the "Vaaldiam Shares")
for CDN$18,500,000 or approximately $0.2582547 per share in cash
(the "Acquisition").
The per share consideration offered by BCKP represents a premium
of 115% to the price of the Vaaldiam Shares on the Toronto Stock
Exchange (the "TSX") on April 18, 2012, before the stock was halted
prior to this announcement, and a 122% premium to the 30 day volume
weighted average trading price on the TSX for the 30 trading days
preceding the date of this announcement.
Board Recommendation
A majority of the Board of Directors of Vaaldiam, upon
consultation with its financial and legal advisors, has determined
that the Acquisition is fair to Vaaldiam's shareholders, from a
financial point of view and is in the best interests of Vaaldiam
and its shareholders. One board member voted against the
Acquisition. A majority of the Board of Directors of Vaaldiam will
therefore recommend that Vaaldiam shareholders vote in favour of
the Acquisition.
Each of Raymond James Ltd. and Mackie Research Capital
Corporation has provided an opinion to the effect that, as of the
date of such opinions and based upon and subject to the
assumptions, limitations and qualifications stated in such
opinions, the consideration proposed to be paid to the holders of
Vaaldiam Shares (other than BCKP and its affiliates) pursuant to
the Acquisition is fair from a financial point of view to such
holders.
The Acquisition represents the culmination of the strategic
review process that was announced by Vaaldiam on November 4, 2011.
During this process, Raymond James Ltd. and Vaaldiam contacted 28
parties to discuss their interest in pursuing a strategic
transaction with Vaaldiam. As a result of those discussions,
Vaaldiam entered into confidentiality and standstill agreements
with five interested parties, received bids from six interested
parties and, prior to entering into exclusive discussions with
BCKP, had ongoing discussions with multiple parties. The
transaction with BCKP, in the view of a majority of the Board, was
the most attractive offer made for the Vaaldiam Shares and
represents the best sale alternative available for
shareholders.
Details of the Acquisition
If successful, the Acquisition will be completed as a plan of
arrangement under the Canada Business Corporations Act, the
implementation of which will be subject to approval by (i) at least
66 2/3% of the votes cast at the annual and special meeting of
Vaaldiam shareholders that is expected to be held in June, 2012
(the "Meeting") and (ii) at least 50% of the votes cast at the
Meeting (excluding the Vaaldiam Shares held by Robert Jackson,
Vaaldiam's President and Chief Executive Officer). The transaction
is also subject to the approval of the Ontario Superior Court of
Justice.
Pursuant to the terms of the Arrangement Agreement, the
Acquisition will be subject to applicable regulatory approvals and
the satisfaction of certain closing conditions customary for
transactions of this nature. If the conditions to completion are
satisfied, the Acquisition will see the purchase by BCKP of all of
the then-issued and outstanding Vaaldiam Shares for CDN$18,500,000,
being approximately CDN$0.2582547 per Share. In addition, the
Arrangement Agreement provides that Vaaldiam shall be entitled to
sell its 10,625,000 common shares of Flemish Gold Corp.
(www.flemishgold.com), a private exploration company with
properties in East Africa and that the net proceeds from such sale
shall be added to the total consideration of $18,500,000. Pursuant
to the terms of the Arrangement Agreement the $18,500,000 purchase
price will be placed in escrow with BCKP's counsel pending
completion of the Acquisition.
The Arrangement Agreement also provides for, among other things,
majority board support and non- solicitation covenants (subject to
fiduciary obligations of the Vaaldiam board of directors and a BCKP
"right to match") as well as payment to BCKP of a break fee equal
to $647,500 and a payment to Vaaldiam of a break fee equal to
$462,500, in either case if the Acquisition is not completed in
certain specified circumstances.
Prior to the closing of the Acquisition, holders of Vaaldiam
stock options which are in the money will be required to exercise
their options using the cashless exercise feature of Vaaldiam's
stock option plan. Those options with an exercise price equal to or
in excess of the per share acquisition price will be cancelled. In
addition, Vaaldiam has 6,093,769 common share purchase warrants
outstanding with an exercise price of $6.50 per share. It is
proposed that these warrants will be cancelled as part of the
Acquisition.
The terms and conditions of the Acquisition will be summarized
in Vaaldiam's management information circular, which will be mailed
to Vaaldiam's shareholders in late May 2012. Vaaldiam anticipates
that the Acquisition, if approved, will be completed in late June
2012. A copy of the Arrangement Agreement will be filed and
available on SEDAR at www.sedar.com.
Vaaldiam's President and CEO, Robert Jackson, commented that "We
are very pleased with this cash offer for Vaaldiam and believe that
it is a good deal for the Vaaldiam shareholders. If the Arrangement
is completed, Shareholders will receive a substantial cash premium
to Vaaldiam's market price at a difficult time for the entire
junior resource sector. Raymond James Ltd., our financial advisor,
ran a well-attended auction for Vaaldiam and a majority of the
Vaaldiam board believes that this transaction is the best bid for
the Company in these challenging markets".
Vaaldiam's financial advisor was Raymond James Ltd. and both it
and Mackie Research Capital Corporation provided fairness opinions
to Vaaldiam in connection with the proposed transaction. Vaaldiam's
legal counsel is Fogler, Rubinoff LLP.
For additional information regarding Vaaldiam please visit
www.vaaldiam.com.
Certain of the information contained in this news release
constitutes 'forward-looking statements' within the meaning of
securities laws. Such forward-looking statements, including but not
limited to those with respect to the prices of metals and minerals,
purchase payments, royalty payments, estimated future production
and estimated costs of future production involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements to be materially different
from any forecast results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include,
among others, the actual prices of metals and minerals, the actual
results of current exploration, development and mining activities,
changes in project parameters as plans continue to be evaluated, as
well as those factors disclosed in the documents of the Company
filed from time to time with the Ontario Securities Commission.
Contacts: Vaaldiam Mining Inc. Robert Jackson President and
Chief Executive Officerrjackson@vaaldiam.com