TSX: GPR
NYSE MKT: GPL
VANCOUVER, April 13,
2015 /CNW/ - GREAT PANTHER SILVER LIMITED (TSX: GPR) (NYSE
MKT: GPL) ("Great Panther") and Cangold Limited (TSX-V: CLD)
("Cangold") are pleased to announce that further to the
binding letter agreement announced on February 26, 2015, they have entered into a
definitive arrangement agreement (the "Arrangement
Agreement") pursuant to which Great Panther will, subject to
the terms and conditions of the Arrangement Agreement, acquire all
of the issued and outstanding common shares of Cangold by way of a
court-approved plan of arrangement (the "Arrangement").
The transaction will result in Great Panther
adding more than 6,000 hectares of the advanced stage Guadalupe de
los Reyes Gold-Silver Project to its existing portfolio of projects
and two primary silver producing mines in Mexico at Guanajuato and Topia. The transaction
also adds Cangold's Plomo Gold Project in Mexico, and its past-producing Argosy Gold
Mine in the Red Lake Mining Division of northeastern Ontario, Canada.
Arrangement Overview
The Arrangement will be carried out by way of a
court-approved plan of arrangement under the provisions of the
Business Corporations Act (British
Columbia). Under the terms of the Arrangement, Cangold
shareholders will receive 0.05 common shares of Great Panther (each
whole common share, a "Great Panther Share") for each common
share of Cangold (a "Cangold Share") held (such exchange
ratio being hereinafter referred to as the "Exchange
Ratio") resulting in the
issuance of approximately 2,139,030 Great Panther Shares in
exchange for 42,780,600 Cangold Shares (excluding approximately 2.9
million Cangold Shares currently held by Great Panther and
approximately 1.0 million additional Cangold shares expected to be
issued pursuant to the Loan Agreement discussed below). In
addition, each outstanding option and warrant to acquire Cangold
Shares will entitle the holder thereof to receive, upon the
exercise thereof, 0.05 Great Panther Shares in lieu of each Cangold
Share, at a price adjusted in accordance with the Exchange Ratio,
and otherwise on the same terms and conditions as the original
option or warrant. The Great Panther Shares to be issued
represent approximately 1.5% of the current number of Great Panther
Shares issued and outstanding. Total share consideration is
valued at approximately $1.7
million.
Completion of the Arrangement is subject to
approval by the Supreme Court of British
Columbia and the affirmative vote of Cangold shareholders at
a special meeting that is expected to be held on May 22, 2015. At the Meeting, the
Arrangement will require approval by at least two-thirds (66⅔%) of
the votes cast by Cangold shareholders present in person or
represented by proxy and entitled to vote at the meeting.
Pursuant to the terms of the Arrangement
Agreement, the Arrangement is also subject to customary conditions,
including support of the transaction by directors, officers and
significant shareholders of Cangold, and receipt of applicable
regulatory and third party approvals and consents as may be
required to effect and complete the transaction, including approval
of the Toronto Stock Exchange and applicable filings with the NYSE
MKT (in respect of Great Panther) and the TSX Venture Exchange (in
respect of Cangold). Completion of the transaction is also
subject to Great Panther being satisfied with the results of its
due diligence investigations and receipt by Great Panther of an
opinion of Mexican legal counsel relating to the option Cangold
holds in respect of the Guadalupe de los Reyes Gold-Silver Project
in Sinaloa State, Mexico. The Arrangement Agreement also
provides for a payment of a termination fee of C$250,000 by Cangold to Great Panther in certain
circumstances where the transaction is not completed.
Great Panther presently has three directors
and/or officers that are also directors and/or officers of Cangold,
including the same President and Chief Executive Officer.
Accordingly, both Great Panther and Cangold established
separate special committees consisting of their respective
independent directors to review the Arrangement Agreement and
oversee all aspects of the transaction.
The board of directors of Cangold (the
"Cangold Board"), based in part on the unanimous
recommendation of the special committee of the Cangold Board
created to consider matters relating to the Arrangement, has
determined that the Arrangement is fair to Cangold shareholders and
is in the best interests of Cangold. Accordingly, the Cangold
Board approved the Arrangement and recommends that Cangold
shareholders vote their Cangold Shares in favour of the
Arrangement. In making its recommendation, the Cangold Board
considered a number of factors, including the receipt by the
Cangold Board of a fairness opinion from Evans & Evans, Inc.
which determined that the consideration offered to Cangold
shareholders pursuant to the Arrangement is fair, from a financial
point of view, to Cangold shareholders.
All of the directors and officers of Cangold (who
hold in the aggregate approximately 9% of the issued and
outstanding Cangold Shares on a non-diluted basis) have entered
into support agreements with Great Panther pursuant to which they
have agreed, among other things, to support the transaction and
vote their Cangold Shares in favour of the Arrangement. In
addition, it is a condition of the Arrangement Agreement that
certain significant shareholders of Cangold (who hold in the
aggregate approximately 13% of the issued and outstanding Cangold
Shares on a non-diluted basis) enter into support agreements with
Great Panther within 10 business days of the execution of the
Arrangement Agreement pursuant to which they will agree, among
other things, to support the transaction and vote their Cangold
Shares in favour of the Arrangement.
Assuming that all requisite approvals are
received, Great Panther and Cangold expect to close the proposed
Arrangement prior to the end of May 2015. Upon completion,
all of the members of the Cangold Board will resign and the current
management team of Great Panther will manage Cangold after
completion of the Arrangement.
The terms of the Arrangement will be described in
further detail in the Management Information Circular of Cangold to
be filed with regulatory authorities and mailed to Cangold
shareholders in late April 2015 in
accordance with applicable securities laws.
Cangold security holders and other interested
parties are advised to read the materials relating to the proposed
Arrangement, including the Arrangement Agreement, that will be
filed by Cangold with securities regulatory authorities in
Canada when they become
available. Anyone may obtain copies of these documents when
available free of charge at the Canadian Securities Administrators'
website at www.sedar.com/.
Advances from Great Panther to Cangold
Under the terms of the previously announced loan
agreement dated February 25, 2015
among Great Panther, Cangold and a Mexican subsidiary of Cangold
(the "Loan Agreement"), Great Panther has provided Cangold
with credit advances in the aggregate amount of approximately
C$1,000,000 (including an initial
advance of US$580,000).
Pursuant to the Loan Agreement, the outstanding principal balance
owing to Great Panther bears interest at the annual rate of 15% and
is secured by a general security agreement and share pledge
agreement over the shares of Cangold's Mexican subsidiary. As
previously announced, Cangold has issued 2,897,680 bonus Cangold
Shares to Great Panther in connection with the initial advance of
US$580,000 and has applied to the
TSX-V for approval of the issuance of an additional 1,060,000 bonus
Cangold Shares in connection with additional advances (in the
aggregate amount of C$265,000) under
the Loan Agreement.
This announcement is for informational purposes
only and does not constitute a solicitation or a proxy.
This news release does not constitute an offer to
sell or a solicitation of an offer to buy any of the
securities. The securities have not been and will not be
registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act"), or any state securities
laws and may not be offered or sold within the United States or to, or for the account or
the benefit of, U.S. persons (as defined in Regulation S under the
U.S. Securities Act) unless registered under the U.S. Securities
Act and applicable state securities laws or an exemption from such
registration is available.
About Great Panther
Great Panther Silver Limited is a primary silver
mining and exploration company listed on the Toronto Stock Exchange
trading under the symbol GPR, and on the NYSE MKT trading under the
symbol GPL. Great Panther's current activities are focused on
the mining of precious metals from its two wholly-owned operating
mines in Mexico: the Guanajuato
Mine Complex, which includes the San
Ignacio satellite mine, and the Topia Mine in Durango.
Great Panther also has two exploration projects in Mexico, El Horcon and Santa Rosa, and is pursuing additional mining
opportunities in the Americas.
About Cangold
Cangold Limited is a junior exploration company
engaged in the exploration and development of gold projects in
Mexico and Canada. Cangold's
primary focus is advancing the Guadalupe de los Reyes Gold-Silver
Project in Sinaloa, Mexico towards
the pre-feasibility stage. Cangold also owns a 100% interest
in the past-producing Argosy Gold Mine in northwestern Ontario and the prospective Plomo Gold Project
in Sonora State, Mexico.
ON BEHALF OF THE
BOARD OF DIRECTORS OF GREAT PANTHER SILVER LIMITED
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ON BEHALF OF THE
BOARD OF DIRECTORS OF CANGOLD LIMITED
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"R.W. (Bob)
Garnett"
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"Kaare G.
Foy"
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R.W. (Bob)
Garnett
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Kaare G.
Foy
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Chairman of Great
Panther Silver Limited
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Executive Chairman of
Cangold Limited
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Cautionary Statement on Forward-Looking
Statements
This news release contains forward-looking
statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and forward-looking
information within the meaning of Canadian securities laws
(together, "forward-looking statements"). Such
forward-looking statements may include but are not limited to
statements regarding the timing, closing and approval of the
transactions contemplated by the Arrangement Agreement, statements
regarding the maximum number of Great Panther Shares issuable under
the transaction, Great Panther's plans for production at its
Guanajuato and Topia Mines in Mexico, exploring its other properties in
Mexico, the overall economic
potential of its properties and the availability of adequate
financing. Such statements and information reflect Great
Panther's and Cangold's views as at the date of this document and
are subject to certain risks, uncertainties and assumptions, and
undue reliance should not be placed on such statements and
information. Many factors, known and unknown could cause the
actual results to be materially different from those expressed or
implied by such forward looking statements. Such factors
include, among others, risks and uncertainties relating to
potential political risks involving the companies' operations in a
foreign jurisdiction, uncertainty of production and cost estimates
and the potential for unexpected costs and expenses, physical risks
inherent in mining operations, currency fluctuations, fluctuations
in the price of silver, gold and base metals, completion of
economic evaluations, changes in project parameters as plans
continue to be refined, the inability or failure to obtain adequate
financing on a timely basis, and other risks and uncertainties,
including those described in Great Panther's Annual Information
Form for the year ended December 31,
2014 and Material Change Reports filed with the Canadian
securities regulators available at www.sedar.com and reports on
Form 40-F and Form 6-K filed with the Securities and Exchange
Commission and available at www.sec.gov as well as both of Great
Panther's and Cangold's other filings with the Canadian securities
regulators and Great Panther's filings with the U.S. Securities and
Exchange Commission. Neither Great Panther nor CANGOLD
intend, nor do they assume any obligation, to update these
forward-looking statements and information.
Neither 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.
SOURCE Great Panther Silver Limited