Vancouver,
British Columbia � May 26, 2008 � Frontier
Pacific Mining Corporation (�Frontier Pacific� or the �Company�) (TSX-V:FRP)
announced today that the Frontier Pacific Board of Directors has filed a
Directors� Circular with Canadian securities regulators recommending that
Frontier Pacific Shareholders REJECT an unsolicited takeover bid from Eldorado
Gold Corporation (�Eldorado�) and NOT tender their shares to the Eldorado
Offer.
On May 9,
2008, Eldorado formally commenced an unsolicited offer to purchase all of the
outstanding common shares (�Frontier Pacific Shares�) of the Company, other
than those already owned by Eldorado on the basis of 0.1220 of a common share
(an �Eldorado Share�) of Eldorado and $0.0001 in cash for each Frontier Pacific
Share. The Eldorado Offer is currently scheduled to expire on June 17,
2008.
Reasons
for the Recommendation
The
Frontier Board, based on the advice and recommendations from a Special Committee
of independent directors as well as its financial and legal advisors,
unanimously recommends that Frontier Shareholders reject the Eldorado Offer.
The Board cited a number of reasons in the Directors� Circular for doing so,
including that:
- Eldorado�s Offer significantly undervalues Frontier Pacific and the
Perama Hill project. If the Eldorado Offer is completed, Frontier
Pacific Shareholders will contribute to the combined Frontier
Pacific/Eldorado 23% of average annual gold production over life of mine,
18% of cash and short term investments and 15% of gold recoverable
resources, in exchange for less than a 6% equity interest in the
post-transaction Eldorado;
- The Eldorado Offer is an opportunistic attempt to acquire Frontier
Pacific before Frontier Pacific Shareholders can realize full value for
their Frontier Pacific Shares as the Perama Hill project advances toward
permitting, development and production;
- Frontier Pacific is currently in discussions with other parties who
have expressed an interest in pursuing potential alternative transactions
that may provide value to Frontier Pacific Shareholders superior to the
Eldorado Bid; and
- Frontier Pacific has the management capabilities and relationships
necessary to achieve permitting of the Perama Hill project.
The
recommendation of the Board of Directors is also supported by the opinion from
Frontier Pacific�s financial advisor, Thomas Weisel Partners Canada Inc., that,
as of the date of such opinion and subject to the assumptions, limitations and
qualifications contained therein, the consideration offered under the Eldorado
Offer is inadequate from a financial point of view to all Frontier Pacific
Shareholders.
All of
Frontier Pacific�s directors and senior officers, as well as certain significant
shareholders of Frontier Pacific, representing an aggregate 39.3% of the
outstanding Shares of Frontier Pacific, have indicated that they do not intend
to tender their Frontier Pacific Shares to the Eldorado Offer.
A complete
and more detailed explanation of all of the reasons for the unanimous
recommendation of the Board is provided in the Directors� Circular.
Availability
of the Directors� Circular
Shareholders
are urged to read the Directors� Circular in its entirety, a copy of which is
available on Frontier Pacific�s website at www.frontierpacific.com and on SEDAR at www.sedar.com . Copies of the Directors� Circular
are also being mailed to all Frontier Pacific Shareholders.
How to Withdraw Shares from the Eldorado Offer
Shareholders,
who have already tendered their shares to the Eldorado Offer and
wish to withdraw them, may do so by contacting Georgeson, the information agent
retained by Frontier Pacific, toll free at 1-866-374-9879. Shareholders may
also contact Georgeson with any questions they have regarding the Eldorado
Offer and/or Frontier Pacific�s recommendation.
GEORGESON
100
University Avenue
11th Floor, South
Tower
Toronto , Ontario
M5J 2Y1
North American Toll Free: +1.866.374.9879
The TSX Venture Exchange (the "Exchange") has not reviewed and
does not accept responsibility for the accuracy or adequacy of this news
release. The Exchange has in no way passed upon the merits of the proposed
transaction and has neither approved nor disapproved the contents of this news
release.
This news release may contain forward-looking statements that
are based on Frontier Pacific expectations, estimates and projections regarding
its business and the economic environment in which it operates. These
statements are not guarantees of future performance and involve risks and
uncertainties that are difficult to control or predict. Therefore, actual
outcomes and results may differ materially from those expressed in these
forward-looking statements and readers should not place undue reliance on such
statements. Statements speak only as of the date on which they are made, and
the Company undertakes no obligation to update them publicly to reflect new
information or the occurrence of future events or circumstances, unless
otherwise required to do so by law.
![]()