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TORONTO, ONTARIO--(Marketwire
- June 16, 2009) - The Board of High River Gold Mines Ltd. (TSX:HRG)
("High River" or the "Company") announced today
that High River has entered into a support agreement (the "Support
Agreement") with Lybica Holding B.V.
("Lybica"), an affiliate of ZAO Severstal Resources, the mining division of OAO Severstal ("Severstal"),
in connection with the proposed acquisition by Severstal
of all of the common shares (the "Common Shares") of High
River. Under the terms of the Support Agreement, Lybica
will offer to acquire, by way of a take-over bid, all of the issued and
outstanding Common Shares (excluding the Common Shares currently
controlled by Severstal) for cash at a price
of C$0.22 per Common Share (the "Offer").
The Special Committee of the independent members of the Board of
Directors of the Company have unanimously determined that the Offer is
fair to minority shareholders and is in the best interests of the
Company and Paradigm Capital Inc., acting as an independent appraiser,
has provided a valuation and fairness opinion to the Special Committee
that the consideration under the Offer is fair, from a financial point
of view, to the Company's minority shareholders. Based on this
conclusion, the Board of Directors (with Severstal
nominees abstaining) unanimously recommends that shareholders accept
the Offer.
The take-over bid circular, containing the full terms of the Offer,
will be sent to the Company's shareholders, together with the
directors' circular and other related documents in connection with the
Offer, on or about June 22, 2009.
Severstal currently controls 312,771,130
Common Shares, representing approximately 53% of the outstanding Common
Shares, and following completion of the previously announced private
placement of 59,019,367 additional newly issued Common Shares, will
control approximately 57.3% of the outstanding Shares.
The Offer is subject to certain conditions that are required to be
satisfied prior to take-up and payment by Lybica;
however, there is no minimum tender requirement.
High River may terminate the Support Agreement under certain
circumstances, including if the Board of Directors determines in good
faith that it has received a Superior Proposal (as such term is defined
in the Support Agreement). If High River terminates the Support
Agreement in order to accept a Superior Proposal, it must pay a break
fee of C$1.7 million. Lybica will have the
right to match any Superior Proposal within five business days of it
being made.
About High River
High River is a gold company with interests in producing mines and
advanced exploration projects in Burkina Faso and Russia.
FORWARD LOOKING STATEMENTS
This release and subsequent oral statements made by and on behalf of
the Company may contain forward-looking statements. Wherever possible,
words such as "intends", "expects",
"scheduled", "estimates", "anticipates",
"believes", and similar expressions or statements that
certain actions, events or results "may", "could",
"would", "might" or "will" be taken,
occur or be achieved, have been used to identify these forward-looking
statements. Although the forward-looking statements contained in this
release reflect management's current beliefs based upon information
currently available to management and based upon what management
believes to be reasonable assumptions, High River cannot be certain
that actual results will be consistent with these forward-looking
statements. A number of factors could cause events and achievements to
differ materially from the results expressed or implied in the
forward-looking statements. These factors should be considered
carefully and prospective investors should not place undue reliance on
the forward-looking statements. Forward-looking statements necessarily
involve significant known and unknown risks, assumptions and
uncertainties that may cause High River's actual results, event,
prospects and opportunities to differ materially from those expressed
or implied by such forward-looking statements. Although High River has
attempted to identify important risks and factors that could cause
actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors and
risks that cause actions, events or results not to be anticipated, estimated
or intended. There can be no assurance that the forward-looking
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, prospective investors should not place undue
reliance on forward-looking statements. Any forward-looking statements
are made as of the date of this release, and High River assumes no
obligation to update or revise them to reflect new events or
circumstances, unless otherwise required by law.
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