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Capital Gold iss and glass
lewis recommend capital gold corporation
stockholders vote for merger with gammon gold
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Capital Gold Corporation (Amex:CGC
- News)
(TSX:CGC.to |
- News)
("CGC") announced today that ISS Proxy Advisory Services and Glass
Lewis & Co., the two leading independent proxy research and advisory
firms, have both published reports recommending that Capital Gold's
stockholders vote "FOR" the merger with Gammon Gold Inc.
("Gammon"). A special meeting of the Capital Gold stockholders to
vote on the merger proposal will be held at 10:00 am on March 18, 2011 at the
offices of Ballard Spahr LLP, located at 1735
Market Street, 51st Floor, Philadelphia,
Pennsylvania.
"We are pleased that both ISS and Glass Lewis, having thoroughly
evaluated the terms of the merger agreement with Gammon as well as the proposed
offer from Timmins Gold Corp., have reached the same conclusion as the Capital
Gold board of directors and the independent special committee and recommend
that stockholders vote in favor of the Gammon merger," said Stephen
Cooper, Chairman of the Board of CGC. "Their recommendations further
validate our view that the Gammon offer is in the best interests of CGC
stockholders and we urge all stockholders to vote in favor of the Gammon
merger."
The ISS analysis cited "…the board's evident attention to
opportunities for maximizing shareholder value, and the superior market value
of the merger consideration being offered" in its recommendation to CGC
stockholders to support the Gammon merger. ISS also examined the long term
potential benefits to stockholders, saying that "…Gammon's stronger
cash position and positive operating cash flow would appear to provide Capital
Gold with the funding it requires to develop and expand its operations.
Gammon's new management team – now in office for approximately three
years – also has experience that Capital Gold will need to leverage as
it develops its underground mining operations at the recently-acquired Orion
Project. Furthermore, Capital Gold stockholders will gain greater exposure
to silver prices through the combined company's ownership of the Ocampo mine."
ISS considered the poor performance of Timmins' stock since it
announced its proposal, stating, "[o]n March 9, 2011, Timmins filed a
Form 425 stating that its offer was superior "[b]ased
on the average of the respective closing share prices for the last 60 trading
days." Although this is technically true when based on this long trading
window… Timmins' stock price has actually deteriorated, in constant US
dollars, while Gammon's – already in US dollars – has become more
attractive."
In arriving at its conclusion, ISS reviewed the reports of several
prominent research analysts that follow the mining sector, quoting some of
these as follows: "[i]n their opinion of the
two transactions on Feb. 15, 2011, Octagon Capital noted that Gammon appeared
to be the better choice due to the exposure to silver prices and the increased
opportunities in Mexico that would arise from the more established
Gammon". Scotia Capital also found the Gammon/Capital transaction to be a
good fit from Gammon's perspective and remained skeptical of the Timmins
transaction. Analysts at Macquarie Equities Research noted that the strong
performance of Gammon's stock may have been driven by the recent rise in
silver prices and higher expectations about its exploration program. The
analysis of the beneficial effects of silver exposure echoes management's
belief that Gammon will provide a more diversified production base for the
combined company.
In reaching its recommendation, Glass Lewis stated that, "...the
Gammon deal is superior to Timmins' offer in almost every aspect", and
found, "…Gammon's stock to be far superior to Timmins' stock as a
form of currency in executing a transaction." Glass Lewis concluded with
saying, "[i]n sum, given our determination that
the Gammon transaction is superior to Timmins' offer, our approval of the
board's sale process in general, our view that the implied purchase price is
fair to shareholders, and the unanimous support of the board, we believe the
proposed acquisition by Gammon is in the best interests of shareholders."
All stockholders are encouraged to vote. Completion of the Gammon
merger is conditioned on the approval by a majority of Capital Gold's outstanding
common stock. Regardless of the number of shares held, it is extremely
important for all stockholders to vote immediately using the WHITE proxy card
to support the Gammon merger. Stockholders are urged to disregard any GOLD
proxy card they may have received from Timmins. Stockholders who have
previously voted using the GOLD proxy card can change their vote using the
WHITE proxy card to vote in favor of the Gammon merger.
Capital Gold has retained MacKenzie Partners
and Gammon Gold has retained Laurel Hill to act as proxy solicitation agents
and to respond to inquiries from stockholders. MacKenzie
Partners may be contacted by telephone at 800-322-2885 toll-free or by e-mail
at proxy@mackenziepartners.com.
Laurel Hill may be contacted by telephone at 1-800-385-3006 toll-free or by
email info@laurelhill.com.
Further information on the merger proposal can also be found at www.capitalgoldcorp.com.
Important Additional Information
Capital Gold Corporation ("CGC" or the "Company")
filed a definitive proxy statement with the Securities and Exchange Commission
(the "SEC") on February 18, 2011 and a supplement to the definitive
proxy statement on March 10, 2011, in connection with the Special Meeting of
Stockholders to be held on March 18, 2011, and mailed the definitive proxy
statement, the supplement, a WHITE proxy card and additional soliciting
materials to stockholders. CGC and its directors and executive officers may be
deemed to be participants in the solicitation of proxies in connection with
such meeting.
The Company's stockholders are strongly advised to read CGC's proxy
statement as it contains important information. Stockholders may obtain an
additional copy of CGC's definitive proxy statement and any other documents
filed by the Company with the SEC for free at the SEC's website at http://www.sec.gov.
Copies of the definitive proxy statement are available for free at www.capitalgoldcorp.com.
In addition, copies of the Company's proxy materials may be requested at
no charge by contacting MacKenzie Partners, Inc. at
1-800-322-2885 or via email at proxy@mackenziepartners.com.
Detailed information regarding the names, affiliations and interests of
individuals who are participants in the solicitation of proxies of CGC's
stockholders is available in CGC's definitive proxy statement filed with SEC
on February 11, 2011 and supplement filed on March 10, 2011.
About Capital Gold
Capital Gold Corporation (CGC) is a gold production and exploration
company. Through its Mexican subsidiaries and affiliates, it owns 100% of the
"El Chanate" gold mine located near the
town of Caborca in Sonora, Mexico. On August 2,
2010, Capital Gold acquired Nayarit Gold Inc. Capital Gold is focused on
optimizing the El Chanate operations and advancing
the Del Norte deposit in the Orion District in the state of Nayarit, Mexico.
Capital Gold also owns and leases mineral concessions near the town of Saric, also located in Sonora, that are undergoing
exploration for gold and silver mineralization. Additional information about
Capital Gold and the El Chanate Gold Mine is
available on the Company's website, www.capitalgoldcorp.com.
Forward-Looking Information
This press release contains forward-looking statements and
forward-looking information within the meaning of applicable securities laws.
The use of any of the words "plans", "expects", or
"does not expect", "is expected", "budget",
"scheduled", "anticipates", or "does not
anticipate", "continue", "estimates",
"forecasts", "objective", "ongoing",
"may", "will", "project", "should",
"believe", "intends" or variations of such words and
phrases or statements are intended to identify forward-looking information or
statements. Forward-looking information is based on the opinions and estimates
of management at the date the information is made, and is based on a number of
assumptions and subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ materially from
those projected in the forward-looking information.
More particularly and without limitation, this press release contains
forward-looking statements and information concerning Gammon Gold's proposed
acquisition of Capital Gold (the "Acquisition") and the merger
agreement pursuant to which such acquisition will be effected. The forward-looking
statements and information are based on certain key expectations and
assumptions made by Gammon Gold and Capital Gold. Although Gammon Gold and
Capital Gold believe that the expectations and assumptions on which such
forward-looking statements and information are based are reasonable, undue
reliance should not be placed on the forward-looking statements and
information because neither of them can give any assurance that they will
prove to be correct. Since forward-looking statements and information address
future events and conditions, by their very nature they involve inherent risks
and uncertainties. There are risks also inherent in the nature of the
Acquisition, including whether the completion of the Acquisition will
ultimately occur, whether the anticipated synergies of the acquisition will
occur, incorrect assessment of the value of the respective properties of each
of Gammon Gold and Capital Gold, and failure to obtain the required security
holder, regulatory, third party and other approvals. The outcome of Timmins'
consent solicitation to replace the Capital Gold board and Capital Gold's
corresponding consent revocation also impact the assumptions on which
forward-looking statement are based. Readers are cautioned that the foregoing
list of factors is not exhaustive. There may be other factors that cause
actions, events or results not to be anticipated, estimated or intended. The
forward-looking statements and information contained in this press release are
made as of the date hereof. There can be no assurance that forward-looking
information will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such information. Neither
Gammon Gold nor Capital Gold undertake any obligation to update publicly or revise
any forward-looking statements or information, whether as a result of new
information, future events or otherwise, except in accordance with applicable
securities laws.