Under the Arrangement, each shareholder of Integra (excluding Eldorado) will be entitled to receive $1.21 per share, to be satisfied by delivery to the holder of one of the following, at the election of the holder: (i) 0.24250 of an Eldorado share, (ii) C$1.21250 in cash, or (iii) 0.18188 of an Eldorado share and C$0.30313 in cash. Eldorado will issue an aggregate maximum of 77 million shares and pay an aggregate maximum of C$129 million in cash, equal to approximately 25% of the total consideration. Accordingly, to the extent the elections would otherwise result in the issue of additional shares beyond this maximum, the amount of shares will be prorated and substituted with cash. Likewise, to the extent elections would result in the payment of cash beyond the maximum, the amount of cash will be prorated and substituted for Eldorado shares. The total transaction value is approximately C$590 million, inclusive of shares held by Eldorado.
Upon completion of the transaction and based on the maximum number of shares issuable under the Arrangement, Integra shareholders would own approximately 10% of the issued share capital of Eldorado.
Integra's Directors have unanimously recommended that Integra's shareholders vote in favour of the Arrangement and each director of Integra intends to vote all of the Integra shares they own or control at the date of the Arrangement meeting in favour of the Arrangement, in the absence of a superior proposal.
Stephen de Jong, President and CEO of Integra stated: "We view this transaction as a win-win for all stakeholders. Our supportive shareholders realize immediate value for their investment in Integra, and can maintain exposure to our world-class asset as Eldorado continues the rapid advancement of Lamaque. Our stakeholders in Val-d'Or can leverage off of a well-financed, responsible gold producer who has chosen Québec as the jurisdiction from which they can establish an operating presence in Canada. Eldorado gains exposure to one of the most productive mining camps in the world, supported by a long-established culture of mining professionals and community partners."
George Salamis, Executive Chairman of Integra stated: "We attribute this transaction to all of the hard work, dedication and commitment of all of our valued employees, stakeholders and the community of Val-d'Or. We believe that Integra is a great model for junior mining companies and what they can achieve when you bring together collaborative effort, creative, outside-the-box thinking and the courage to invest in people as much as the assets in the ground. Over the past few years, we have created a fantastic team who have laid the groundwork to ensure that Eldorado is a successful and enduring entrant to the Canadian mining space. That effort has been recognized today and we look forward to seeing Lamaque realize its full potential."
Summary of the Transaction
The Arrangement has been unanimously approved by the board of directors of both Integra and Eldorado and will be subject to, among other things, the approval of 66⅔% of the holders of Integra shares and the approval of a "majority of the minority" of Integra shares excluding Eldorado's (62 million) Integra shares at a special meeting of Integra shareholders which is expected to occur in July 2017 (the "Arrangement Meeting"), receipt of all necessary regulatory and court approvals and the satisfaction of certain other closing conditions customary for a transaction of this nature.
The Arrangement Agreement provides that the board of directors of Integra may, under certain circumstances, terminate the agreement in favour of a superior proposal, subject to payment of a termination fee of C$18 million, and subject to Eldorado having a three day right to match the superior proposal in question. Integra has agreed not to solicit any alternative transactions.
Directors and officers representing 2% of Integra have agreed to voting support arrangements with Eldorado in respect to the transaction.
The maximum number of Eldorado shares to be issued under the Arrangement will be approximately 77 million based on the issued and outstanding Integra shares as of the announcement date excluding the 62 million shares of the Company held by Eldorado. The transaction is expected to close in July 2017, and in any event no later than August 30, 2017, following the receipt of all required shareholder and regulatory approvals.
Eldorado holds approximately 12.8% of the outstanding common shares of Integra, accordingly, the Arrangement will be a non-arm's length transaction for the purposes of the policies of the TSX-V and "business combination" under Multilateral Instrument 61-101.
Advisors
Integra's exclusive financial advisor is Raymond James Ltd. Cairn Merchant Partner LP acted as a strategic advisor to the Company. BMO Capital Markets acted as exclusive financial advisor to a Special Committee of the Integra Directors. Raymond James Ltd. and BMO Capital Markets have provided opinions to the Integra Board of Directors, including a Special Committee thereof in the case of BMO Capital Markets. Each such opinion provides that, as of the date thereof and subject to the assumptions, limitations, and qualifications set out therein, the consideration to be received by the Integra shareholders under the transaction is fair, from a financial point of view, to the Integra shareholders, other than Eldorado and its affiliates.
Further information regarding the Arrangement will be contained in an information circular that Integra will prepare, file and mail in due course to the holders of Integra shares in connection with the special meeting to be held to consider the Arrangement. All shareholders are urged to read the information circular once available as it will contain additional important information concerning the Arrangement.
This announcement is for informational purposes only and does not constitute an offer to purchase, a solicitation of an offer to sell the Integra shares or a solicitation of a proxy.
ON BEHALF OF THE BOARD OF DIRECTORS
Stephen de Jong
CEO & President, Director
About Integra Gold
Integra Gold is a junior gold exploration company advancing projects in Val-d'Or, Québec, one of the top mining jurisdictions in the world. The Company's primary focus is its high-grade Lamaque South project. In the fall of 2014, Integra completed the accretive acquisition of the Sigma Mill and Mine Complex, a fully permitted 2,200 tonnes per day mill and tailings facility. With major federal and provincial permits in place, existing infrastructure and significant exploration potential, this acquisition shortened timelines typically associated with mine development projects. Integra has raised over $125 million since 2013, at successively higher share prices, despite depressed gold prices.
About Eldorado
Eldorado is a leading low cost gold producer with mining, development and exploration operations in Turkey, Greece, Romania, Serbia and Brazil. The Company's success to date is based on a low cost strategy, a highly skilled and dedicated workforce, safe and responsible operations, and long-term partnerships with the communities where it operates. Eldorado's common shares trade on the Toronto Stock Exchange (ELD.TO) and the New York Stock Exchange (EGO).
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Kingsdale Advisors
If you have any questions, please contact Kingsdale Advisors at 1-866-229-8874 toll-free in North America, or 416-867-2272 outside North America or by email at contactus@kingsdaleadvisors.com.
Neither the 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 news release
Cautionary Note Regarding Forward-Looking Statements: Certain disclosures in this release constitute forward-looking statements. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that are based on the Company's current beliefs as well as assumptions made by and information currently available to the Company, including that the Company is able to procure personnel, equipment and supplies required for its exploration activities in sufficient quantities and on a timely basis and that actual results of exploration activities are consistent with management's expectations. Although the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect, and the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. The Company does not intend, and expressly disclaims 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 required by law.
