Central Sun Announces Receipt of Superior Proposal From B2Gold
27 Gennaio 2009 - 2:51PM
Marketwired
Central Sun Mining Inc. (TSX: CSM)(NYSE Alternext US: SMC)
("Central Sun" or the "Company") announces the receipt of a binding
offer from B2Gold Corp. ("B2Gold") for the acquisition of all of
the issued and outstanding shares of the Company by way of a plan
of arrangement, pursuant to which Central Sun shareholders would be
entitled to receive 1.28 common shares of B2Gold for each Central
Sun common share held (the "B2Gold Transaction").
The consideration under the B2Gold Transaction represents a
45.1% premium over the closing price of $0.45 for the Central Sun
common shares (the "Shares") on the Toronto Stock Exchange on
January 26, 2009 and a 45.7% premium over the volume weighted
average price of the Shares during the 10 day trading period ended
January 26, 2009. The Superior Proposal represents a 49.7% higher
price than that offered by Linear Gold Inc. ("Linear Gold"), based
on closing prices on January 26, 2009.
On December 24, 2008, Central Sun entered into a letter
agreement (the "Linear Agreement") with Linear Gold pursuant to
which Linear Gold agreed to acquire each of the Central Sun common
shares in consideration for 0.4 of a Linear Gold common share (the
"Linear Exchange Ratio").
The Board of Directors of Central Sun has unanimously determined
that the B2Gold Transaction constitutes a Superior Proposal within
the meaning of the Linear Agreement. "The Board of Directors of
Central Sun has carefully considered the proposed terms of the
B2Gold Transaction as compared to the terms of the business
combination with Linear Gold and, in consultation with our
financial and legal advisors, has determined that the B2Gold
Transaction would result in a transaction more favourable to the
shareholders of Central Sun, from a financial point of view" said
Stan Bharti, Chairman of the Board of Directors of Central Sun.
Macquarie Capital Markets Canada Ltd. ("Macquarie") has been
appointed as financial advisor to Central Sun. Macquarie has
provided an oral fairness opinion to the Special Committee of
Central Sun that the B2Gold Transaction is superior, from a
financial point of view, to the Linear Gold transaction.
Under the Linear Agreement, Central Sun may recommend or enter
into an agreement in respect of an alternative transaction (in lieu
of the business combination with Linear Gold) if the alternative
transaction is determined to be a Superior Proposal by Central
Sun's Board of Directors prior to the completion of the Linear
business combination subject to Linear Gold's right to match such
proposal. Central Sun has advised Linear Gold of the Superior
Proposal determination and Linear Gold has the right to match the
B2Gold Transaction until 5:00 p.m. (Toronto time) on Friday January
30, 2009. The Linear Agreement provides for the payment of a
termination fee of $1,000,000 by Central Sun to Linear Gold in
certain circumstances.
The proposed agreement for the B2Gold Transaction provides for,
among other things, a non-solicitation covenant on the part of
Central Sun, a right in favour of B2Gold to match any competing
offers and for Central Sun to pay a non-completion fee payment of
$2,000,000, and reimbursement of expenses, under certain
circumstances.
If the Linear Agreement is terminated, Central Sun will be
required to repay, within 60 days of termination, the $2,500,000
convertible debenture that Linear Gold has provided to Central Sun.
The proposed terms of the B2Gold Transaction provide that B2Gold
will provide Central Sun with a convertible debenture in the
principal amount of $10,000,000 within five business days of
signing the B2Gold Transaction agreement.
About Central Sun
Central Sun Mining Inc. is a gold producer with mining and
exploration activities focused in Nicaragua. Central Sun operates
the Limon Mine in Nicaragua and is converting the Orosi Mine in
Nicaragua to conventional milling to increase the annual gold
output. It also holds a 60% interest in the Cerro Quema Project in
Panama, a 100% interest in La India property and an option to
acquire a 100% interest in the Mestiza gold property both of which
are located 70 kilometres by road east of its operating Limon Mine.
The Company is focused on efficient and productive mining practices
to establish high quality and cost effective operations. Central
Sun is committed to growth by optimizing current operations,
expanding mineral reserves and resources at existing mines,
exploring its extensive land holdings and seeking strategic mergers
or acquisitions in the Americas.
Cautionary Note Regarding Forward-Looking Information This press
release contains "forward-looking information" within the meaning
of applicable Canadian securities legislation. Forward-looking
information includes, but is not limited to, statements regarding
the terms of the proposed business combinations with Linear Gold
and B2Gold and the benefits of each respective combination, any
election by Linear Gold to exercise its right to match and the
consequences of such election; the terms of the proposed loan from
B2Gold and the repayment of the loan from Linear Gold, the
conclusions of fairness opinion of Macquarie, its underlying
assumptions and parameters and the receipt of a written fairness
opinion and regulatory matters. Generally, forward-looking
information can be identified by the use of forward-looking
terminology such as "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes",
or variations of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or
"will be taken", "occur" or "be achieved".
Forward-looking information is based on various assumptions and
on the best estimates of CSM as of the date hereof, and is subject
to known and unknown risks, uncertainties and other factors that
may cause the actual results, level of activity, performance or
achievements of CSM to be materially different from those expressed
or implied by such forward-looking information, including but not
limited to: transaction risks; risks relating to the completion of
the transaction with B2Gold and the integration of the two
companies following combination; general business, economic,
competitive, political and social uncertainties; the actual results
of current exploration activities; delay or failure to receive
board or regulatory approvals; timing and availability of external
financing on acceptable terms; conclusions of economic evaluations;
changes in project parameters as plans continue to be refined;
future prices of mineral prices; failure of plant, equipment or
processes to operate as anticipated; accidents, labour disputes and
other risks of the mining industry; and, delays in obtaining
governmental approvals or required financing or in the completion
of activities, and as well as those risks identified under "Risk
Factors" disclosure sections in the documents filed under the
profile of CSM on SEDAR from time to time. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking information. The Company
does not undertake to update any forward-looking information,
except in accordance with applicable securities laws.
Contacts: CENTRAL SUN MINING INC. Peter Tagliamonte President
and Chief Executive Officer (416) 860-0919 Email:
ir@centralsun.ca
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