The Board of Directors of Freewest Resources Canada Inc. (TSX
VENTURE: FWR) is pleased to announce that Freewest and Cliffs
Natural Resources Inc. (NYSE: CLF)(PARIS: CLF) have amended their
previously-announced Arrangement Agreement. Under the amended
Arrangement Agreement, Cliffs will acquire all of the shares of
Freewest in a Board-supported transaction at a price of C$0.90 per
Freewest share, placing a value on Freewest of approximately C$211
million. Under the terms of the amended Arrangement Agreement,
Freewest shareholders will receive a fraction of a Cliffs share
representing a fixed value of C$0.90 for each Freewest share.
"We are very pleased to announce this amended agreement with
Cliffs", said Mackenzie I. Watson, President and Chief Executive
Officer of Freewest. "The purchase price has increased from an
estimated C$0.70 per share, the value offered by Cliffs under the
original terms of the Arrangement Agreement, to a firm C$0.90 per
share, now comprised exclusively of Cliffs shares. We believe this
transaction is clearly superior to the amended offer made by Noront
Resources, comprised of uncertain value in the form of Noront
shares and warrants. As I stated before, the Cliffs transaction
will provide Freewest shareholders with highly-liquid shares in a
company with a market capitalization in excess of US$6
billion."
The transaction, as amended, will be effected by way of Plan of
Arrangement. Freewest expects to mail a management proxy circular
to shareholders shortly for a special meeting of shareholders to be
held on January 15, 2010. It is expected that the transaction will
be completed soon after the special shareholders' meeting.
The amended transaction with Cliffs has the unanimous support of
a Special Committee of the Board of Directors of Freewest, and of
the entire Board. The decision of the Board was based in part on a
fairness opinion provided by CIBC World Markets Inc., the Board's
financial advisor. A copy of the fairness opinion will be included
in Freewest's management proxy circular.
The details of the amended agreement with Cliffs are as
follows:
- Freewest shareholders will receive C$0.90 per share in fixed value of
Cliffs shares, with the precise number of Cliffs shares to be based on
their market value on the NYSE shortly before the effective date of the
transaction, expected to be in January 2010
- all holders of vested "in-the-money" Freewest warrants and stock options
will receive a cash payment equal to the difference between C$0.90 and
the exercise price of the warrants or stock options
- all of Freewest's directors and officers have entered into voting
support agreements with Cliffs under which they have agreed to vote all
of their shares in favour of the transaction
"I want to emphasize that the transaction with Cliffs guarantees
value of C$0.90 per share on closing", added Mr. Watson. "Cliffs'
proposal provides not only a higher value, it is also far less
volatile than Noront's hostile bid, which offers a fixed ratio of
Noront shares and warrants for each Freewest share as
consideration, and therefore a fluctuating value."
Freewest's Board of Directors unanimously recommends that
Freewest shareholders approve the transaction with Cliffs, as
amended, at the forthcoming special meeting of shareholders. The
Board of Directors recommends that Freewest shareholders REJECT the
hostile take-over bid made by Noront on October 13, 2009, as
amended on December 1, 2009, and NOT tender their shares to the
Noront offer, which will expire on December 11, 2009. The Board of
Directors maintains its view that the Noront offer is financially
inadequate and opportunistic, and fails to recognize the strategic
value of Freewest's assets and its future value-creation.
As previously announced, the Arrangement Agreement with Cliffs,
as amended, contains, among other things, a non-solicitation
covenant by Freewest, subject to customary provisions that entitle
Freewest to consider and accept a superior proposal; a right in
favour of Cliffs to match any superior proposal; and the payment by
Freewest to Cliffs of a termination payment equal to C$8.45 million
if the transaction is not completed as a result of a superior
proposal, and in certain other circumstances.
The transaction between Freewest and Cliffs, as amended, is
subject to a number of conditions, including obtaining the approval
of at least two-thirds of the Freewest shares voted at a special
meeting of shareholders, and a simple majority of the Freewest
shares voted at the special meeting, other than shares held by
certain officers of Freewest. The transaction is also subject to
court approval as a plan of arrangement and a number of other
customary conditions.
Freewest also announces that it has completed the issuance to
Cliffs of 7,375,000 common shares at a price of C$0.45 per share,
following the exercise by Cliffs of all Freewest warrants held by
it. Freewest received proceeds of C$3,318,750 upon the exercise of
the warrants. As a result of the share issuance, to Freewest's
knowledge, Cliffs indirectly holds 29,033,440 Freewest shares,
representing approximately 12.4% of Freewest's 234,829,907 issued
and outstanding shares.
About Freewest
Freewest is a mineral exploration company actively exploring for
gold, base-metals and chromite within eastern Canada. Corporate
information can be accessed on the Internet at www.freewest.com.
Freewest's shares are listed on Tier 1 of the TSX Venture Exchange
under the symbol FWR.
About Cliffs Natural Resources Inc.
Cliffs Natural Resources (NYSE: CLF)(PARIS: CLF) is an
international mining and natural resources company. It is the
largest producer of iron ore pellets in North America, a major
supplier of direct-shipping lump and fines iron ore out of
Australia and a significant producer of metallurgical coal. With
core values of environmental and capital stewardship, Cliffs'
colleagues across the globe endeavor to provide all stakeholders
operating and financial transparency as embodied in the Global
Reporting Initiative (GRI) framework. Cliffs is organized through
three geographic business units:
The North American business unit is comprised of six iron ore
mines owned or managed in Michigan, Minnesota and Eastern Canada,
and two coking coal mining complexes located in West Virginia and
Alabama. The Asia Pacific business unit is comprised of two iron
ore mining complexes in Western Australia and a 45% economic
interest in a coking and thermal coal mine in Queensland,
Australia. The South American business unit includes a 30% interest
in the Amapa Project, an iron ore project in the state of Amapa in
Brazil.
Over recent years, Cliffs has been executing a strategy designed
to achieve scale in the mining industry and focused on serving the
world's largest and fastest growing steel markets.
Georgeson Inc. is acting as Freewest's solicitation agent in
connection with this transaction. Georgeson may be contacted as
follows:
100 University Avenue
11th Floor, South Tower
Toronto, Ontario
M5J 2Y1
North American Toll Free Number: 1-866-433-7579
Banks and Brokers Collect Number: 1-212-806-6859
Forward-Looking Statements
This news release contains statements that constitute
"forward-looking information" or "forward-looking statements"
within the meaning of applicable securities legislation. More
particularly, this news release contains forward-looking
information concerning a Plan of Arrangement involving Freewest
Resources Canada Inc. and Cliffs Natural Resources Inc. This
forward-looking information is subject to numerous risks and
uncertainties, certain of which are beyond the control of Freewest.
Actual results or achievements may differ materially from those
expressed in, or implied by, this forward-looking information. No
assurance can be given that any events anticipated by the
forward-looking information will transpire or occur, or if any of
them do so, what benefits that Freewest will derive therefrom. In
particular, no assurance can be given as to whether the plan of
arrangement with Cliffs Natural Resources Inc. will be completed.
Forward-looking information is based on the estimates and opinions
of Freewest's management at the time the information is released
and Freewest does not undertake any obligation to update publicly
or to revise any of the forward-looking statements, whether as a
result of new information, future events or otherwise, except as
may be required by applicable securities laws.
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 release.
Contacts: Freewest Resources Canada Inc Mackenzie I. Watson
President and CEO (514) 878-3551 or 1-888-878-3551 (514) 878-4427
(FAX) info@freewest.com www.freewest.com AGORACOM Investor
Relations FWR@Agoracom.com http://agoracom.com/ir/freewest
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