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Pursuant to its previously announced
business combination with Pediment Gold Corp. (TSX:PEZ - News; OTCBB:PEZGF - News),
("Pediment"), Argonaut Gold Inc. (TSX:AR - News;
"Argonaut" or the "Company") has begun mailing the
meeting materials to Argonaut shareholders seeking support for the issuance
of shares of Argonaut necessary to complete its business combination with
Pediment.
Pediment has also began mailing meeting
materials to its shareholders.
On October 18, 2010, Argonaut entered
into a binding agreement to complete a business combination (the
"Transaction") with Pediment. The combined entity will focus on
generating value for its shareholders by increasing production, bringing new
and existing projects into production, expanding the resource base, and
growing cash flow.
Pursuant to the terms of the Agreement,
all of the Pediment common shares (the "Pediment Common Shares")
issued and outstanding immediately prior to consummation of the business
combination shall become exchangeable into the common stock of Argonaut on
the basis of 0.625 of a common share of Argonaut for each one (1) Pediment
Common Share. Based on the closing price of Argonaut on the Toronto Stock
Exchange ("TSX") on October 18, 2010, the exchange ratio implies an
offer price of C$2.56 per Pediment common share and values Pediment's equity
at approximately C$137.1 million on a fully diluted in-the-money basis.
Rescheduled Mailing
Pediment and Argonaut delayed the
planned mailing to investigate the proposed amendments to the local
environmental laws in the State of Baja California Sur, Mexico the
("BCS") which, if implemented, could adversely affect the ability
to secure a building licence for the development of
its San Antonio Project as currently envisioned.
Based on the information received to
date, the parties understand that the legislation, as originally proposed,
has not been approved by the Governor and the Governor has stated publicly
that it will not be approved in its current form. The current sitting of the
BCS legislature has now ended. The legislature is not expected to resume
sitting until March 2011, at which time new members and, shortly thereafter,
a new Governor will be sworn in, following elections. There can be no
certainty with respect to future legislative action, however, Pediment and
Argonaut have held meetings with a variety of local stakeholders and
legislators and believe there is broad opposition to the proposed legislation
and support for the San Antonio Project.
Pediment and Argonaut have, given the
results of these investigations to date, determined to proceed with their
proposed business combination.
Directors' Recommendation
Directors of both companies have
carefully considered the proposed business combination and unanimously
recommend that their respective shareholders vote in favour
of the business combination. Each Director of the Argonaut Gold Board and
Pediment Board intend to vote all their respective shares in favour of the business combination.
Argonaut - Pediment Circular Mailing
The Pediment Circular will be mailed to
Pediment shareholders on December 23, 2010 and subsequently be posted on
SEDAR.
The Argonaut Circular will be mailed to
Argonaut shareholders on December 24, 2010 and subsequently be posted on
SEDAR.
Shareholders will receive the meeting
documents through the mail and should expect to receive the documents in late
December or early January.
Pediment Shareholder Information Line
If Pediment shareholders have questions
about the business combination, they should contact Kingsdale
at 1-866-581-1479 or via email at contactus@kingsdaleshareholder.com.
Argonaut Shareholder
If Argonaut shareholders have questions
about the business combination, they should contact Nichole Cowles, Investor
Relations Manager at 1-775-240-4172 or via email at nichole.cowles@argonautgoldinc.com.
About Argonaut
Argonaut is a Canadian gold company
engaged in exploration, mine development and production activities. Its
primary assets being the production-stage El Castillo Project and the
exploration-stage La Fortuna Project, both located in the State of Durango,
Mexico. Argonaut is a new venture created by former executive management team
members of Meridian Gold Inc.
Creating the Next Quality Mid-Tier Gold
Producer in the Americas.
About Pediment Gold Corp.
Pediment Gold Corp. is a junior mining
company with a focus on the exploration and development of low-cost gold
assets in Mexico. With an experienced team of geologists, financiers and
miners, in management and on the board, the company is dedicated to advancing
its projects. To date, the company established a Measured and Indicated
Resource of 1.22 million oz gold and an Inferred Resource of 28,449 oz of
gold at San Antonio in Baja Sur (NI 43-101 compliant, AMEC, Edward Orbock III, June 2010). Pediment also outlined its
initial gold resource at the past producing La Colorada
gold mine in Sonora with 605,000 oz of gold in the Measured and Indicated
category and 582,000 oz of gold in the Inferred category (NI 43-101
compliant, Giroux 2009). For further information about Pediment please see the
Annual Report of Pediment on Form 20-F dated December 21, 2009 in relation to
the year ended September 30, 2009."
Cautionary Note Regarding
Forward-looking Statements
This news release contains
forward-looking statements that involve risks and uncertainties that could
cause results to differ materially from management's current expectations.
Actual results may differ materially due to a number of factors. Except as
required by law, Argonaut Gold Inc. assumes no obligation to update the
forward-looking information contained in this news release.
Contact:
Nichole Cowles
Argonaut Gold Inc.
Investor Relations Manager
(775) 284-4422 x 101
nichole.cowles@argonautgoldinc.com
www.argonautgoldinc.com |