CANADIAN GOLD HUNTER AND SURAMINA RESOURCES
ENTER INTO ARRANGEMENT AGREEMENT
February 13, 2009?Canadian Gold Hunter Corp. (CGH-TSX)
(?Canadian Gold Hunter?) and Suramina Resources
Inc. (SAX-TSX) (?Suramina?) are pleased to announce that they have entered
into a definitive agreement (the ?Arrangement Agreement?) to effect a business
combination between the two companies pursuant to a plan of arrangement under
the Canada Business Corporations Act.
Pursuant to the Arrangement Agreement, Canadian Gold
Hunter will acquire all of the issued and outstanding shares of Suramina on the
basis of 0.7541 shares of Canadian Gold Hunter for each one Suramina
share (the ?Exchange Ratio?). All outstanding Suramina options will be
exchanged for replacement options of Canadian Gold Hunter, the number and
exercise price of which will be determined using the Exchange Ratio. The
transaction values the Suramina shares at $0.1975, representing a 12.7% premium
to the 20 day volume weighted average closing price of Suramina. Upon
completion of the transaction, Suramina will be a wholly-owned subsidiary of
Canadian Gold Hunter and it is estimated that Canadian Gold Hunter will have
110,335,992 shares outstanding. Former shareholders of
Suramina will hold approximately 47.3% of the outstanding shares of Canadian
Gold Hunter. The transaction is expected to close in mid-April 2009.
Full details of the transaction, including the terms
of the Arrangement Agreement, will be included in a joint information
management circular which is expected to be mailed to shareholders of Canadian
Gold Hunter and to shareholders of Suramina on or about March 18, 2009. Both
companies plan to hold a special meeting of shareholders to approve the
transaction and related matters on or about April 14, 2009. The transaction is
subject to all requisite regulatory and court approvals as well as shareholder
approval of the transaction by at least 66 2/3% of the votes cast by the
Suramina shareholders and shareholder approval of the Canadian Gold Hunter
share issuance in connection with the transaction by not less than a majority
of the votes cast by the Canadian Gold Hunter shareholders, in both cases,
present in person or represented by proxy at the meetings.
The transaction has been approved by the board of
directors of both Canadian Gold Hunter and Suramina (with interested directors
abstaining) following the unanimous recommendation of a special committee
comprising independent Canadian Gold Hunter directors for Canadian Gold Hunter
and independent Suramina directors for Suramina. The board of directors
of both companies recommends that their respective shareholders vote in favour
of the transaction.
Benefits
of the Business Combination
? Suramina brings to the transaction a
large, diversified copper/gold exploration portfolio in South
America. Projects range from grass roots to advanced resource
definition stage, including the Josemaria copper/gold porphyry project with a
43-101 inferred resource of 460 million tonnes grading 0.39% copper and 0.30
g/t gold at a 0.3% TCu cut-off, containing 3.9 billion pounds of copper and 4.4
million ounces of gold. (Please see news release dated December 5, 2007
for complete information). Suramina?s local exploration team has a strong track
record of success including the discovery of the Veladero gold deposit, now
owned by Barrick Gold, as well as the initial recognition and development of
the Bajo de la Alumbrera gold mine, now owned by Goldcorp., Xstrata and Yamana.
? Canadian Gold Hunter brings to the
transaction a major new gold/copper exploration project in Mexico as well as a
strong portfolio of copper/gold exploration projects in Canada, including the
GJ/Kinaskan project with a 43-101 measured and indicated resource of 153.3
million tonnes grading 0.321% copper and 0.369 g/t gold, containing 1.09
billion pounds of copper and 1.82 million ounces of gold (cut-off grade of
0.20% copper). (Please see news release dated October 7, 2008 for
complete information). Canadian Gold Hunter?s exploration team
has, combined, over 70 years of international exploration and development
experience.
? In the short term, capital market
conditions favour stronger, larger, diversified exploration vehicles. The
combined entity will be financed, debt-free, and an active exploration
company. As well, the transaction will introduce significant cost
efficiencies through reduction of total G&A and other head office costs.
? In the long term, the combined
entity will be extremely well-positioned for the anticipated commodity markets
recovery with a diversified roster of gold/copper projects in various stages of
advancement. The combined exploration expertise of both companies will
ensure best possible shareholder value.
In
connection with the proposed business combination, Haywood Securities Inc.
provided a fairness opinion to the special committee of the board of directors
of Canadian Gold Hunter and Dundee Securities Corporation provided financial
advice and a fairness opinion to the special committee of the board of
directors of Suramina. Legal advice to the special committee of the board
of directors of Canadian Gold Hunter was provided by DuMoulin Black LLP.
Legal advice to the special committee of the board of directors of Suramina was
provided by McCullough, O?Connor Irwin LLP, and Cassels Brock & Blackwell
LLP acted as corporate counsel on the transaction
ON BEHALF OF THE
BOARD
ON BEHALF OF THE BOARD
OF
CANADIAN GOLD HUNTER
OF SURAMINA
?Richard
J.
Bailes?
?J. Patricio Jones?
President
President
Forward-Looking
Statements
This news release contains certain forward-looking
statements relating to Canadian Gold Hunter and Suramina that includes risks
and uncertainties. All statements, other than statements of historical
fact, are forward-looking statements. When used in this news release, the
words ?anticipate?, ?will?, ?believe?, ?estimate?, ?expect?, ?target?, ?plan?,
?may? and similar expressions, identify forward-looking statements with respect
to events that ?may? or ?will? occur. Forward-looking statements are
necessarily based upon a number of assumptions and current expectations that,
while considered reasonable by Canadian Gold Hunter and Suramina as at the date
on which they were made, are inherently subject to significant uncertainties
and risks. Many
factors, both known and unknown, could cause the actual results, performance or
achievements to differ materially from those expressed or implied by such
forward-looking statements. Assumptions upon which such forward-looking
statements are based include that the transaction will be completed, that all
required third party regulatory, governmental and shareholder approvals for the
transaction will be obtained and all other conditions to completion of the
transaction will be satisfied or waived. Many of these assumptions are
based on factors and events that are not within the control of Canadian Gold
Hunter or Suramina and there is no assurance they will prove to be
correct. Although Canadian Gold Hunter and Suramina have attempted to
identify important factors that could cause actual actions, events or results
to differ materially from those described in forward-looking statements, there
may be other factors that cause actions, events or results not to be
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such
statements. Canadian Gold Hunter and Suramina undertake no obligation to
update forward-looking statements if circumstances or management?s estimates or
opinions should change except as required by applicable securities laws.
The reader is cautioned not to place undue reliance on forward-looking
statements. Other risks are set forth in the annual information form of
Canadian Gold Hunter and of Suramina.
For further information, please contact:
Sophia
Shane, Corporate Development (604) 689-7842