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TORONTO, ONTARIO--(Marketwire - Nov. 24,
2009) - CASTLE GOLD CORPORATION ("Castle Gold" or the
"Corporation") (TSX VENTURE:CSG) is pleased to announce that
it has mailed to shareholders its directors' circular in response to
Argonaut Gold Inc.'s proposed all cash acquisition of all of the shares
of Castle Gold previously announced on October 28th, 2009 (the
"Offer"). The Offer by Argonaut is the purchase of all of the
issued and outstanding Castle Gold common shares for a minimum of
C$1.25 in cash per share, subject to an increase in such price by
C$0.01 for every 1% increase in the price of gold calculated from a
starting gold price of US$1,050 to the 5-day average London Gold Fix
(PM) price for December 18, 21, 22, 23 and 24, 2009, provided that the
maximum final price shall not exceed C$1.50 per Castle Share. The
directors' circular recommends that shareholders accept the offer by
Argonaut.
On November 20, 2009, Argonaut completed a private placement of
subscription receipts (the "Subscription Receipts") for gross
proceeds of C$150 million. The Subscription Receipts are convertible
into common shares of Argonaut upon Argonaut taking up the number of
Castle Gold common shares which constitutes at least 66 2/3% of the
Castle common shares outstanding, calculated on a fully-diluted basis.
Such funds will be used by Argonaut to satisfy the purchase price to
shareholders under the Offer.
To date, lock-up agreements have been signed by Castle Gold
shareholders holding 39,785,741 Castle Gold common shares and options
to purchase 6,465,500 Castle Gold common shares, or, in aggregate,
approximately 54% of the issued and outstanding Castle Gold common
shares calculated on a fully-diluted basis. All of the members of
management and the board of directors of Castle Gold fully support the
Offer and will deposit all of their common shares to the Offer. The
board of directors unanimously recommends that shareholders accept the
Argonaut Offer and tender their common shares to the Offer. The expiry
date of the Offer is December 29, 2009. Shareholders must tender their
shares to the Offer by no later than 11:59 pm Toronto time on December
29, 2009 in order to participate in the Offer. It is anticipated that
Argonaut will take-up and pay for the shares deposited to the Offer shortly
after the expiry date provided that all conditions to the Offer have
been met or waived by Argonaut.
The directors' circular is being delivered together with the offering
documents from Argonaut Gold. Registered shareholders of Castle Gold
who do not receive these documents by November 30, 2009 should contact
Argonaut's information agent, Kingsdale Shareholder Services Inc. at
1-866-518-6813 or by email at contactus@kingsdaleshareholder.com
to request copies or for assistance in depositing their common shares
under the Offer.
Shareholders whose common shares are registered in the name of an
investment advisor, stock broker, bank, trust company or other nominee
should immediately contact that nominee for assistance if they wish to
accept the Offer in order to take the necessary steps to be able to
deposit such common shares under the Offer.
About Castle Gold
Castle Gold Corporation is a gold producer with projects focused in the
Americas. Castle Gold owns a 100% interest in the El Castillo gold mine
in Mexico and a 50% interest in the El Sastre gold mine in Guatemala.
Castle Gold is also advancing exploration and development work at its
La Fortuna gold-silver-copper project in Mexico.
Forward Looking Statements
Certain statements in this press release constitute
"forward-looking" statements that involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Castle Gold to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. When used in
this news release, words such as "will be used",
"plans", "hope", and "expects" and
similar expressions to the extent they relate to Castle Gold are
intended to identify forward-looking statements. There is no assurance
that any strategic transaction will be completed. Unless required by
applicable securities law, Castle Gold does not assume any obligation
to update forward-looking statements.
--------------------------------------------------------------- TSX-V Trading Symbol: CSG Total Shares Outstanding: 79.2MM Fully Diluted: 85.9MM 52-Week Trading Range: C$1.30 to $0.15 ---------------------------------------------------------------
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.
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