TORONTO, ONTARIO--(Marketwire
- March 31, 2009) - North American palladium Ltd. ("NAP")
(TSX:PDL)(NYSE Alternext US:PAL)(NYSE Amex:PAL.A) and Cadiscor
Resources Inc. ("Cadiscor") (TSX
VENTURE:CAO) today announced that they have entered into a definitive
agreement pursuant to which NAP will acquire by way of a plan of
arrangement all of the outstanding common shares of Cadiscor
in an all-share transaction, whereby Cadiscor
shareholders will receive 0.33 common shares of NAP for each common
share of Cadiscor (the "Exchange
Ratio").
Based on the closing price of NAP's common
shares on the TSX of $1.78 on March 31, 2009, the Exchange Ratio
implies a value for each Cadiscor share of
$0.59 and represents a premium of 47% to the closing price of Cadiscor's shares on March 31, 2009, and a premium
of 75% to the 20-day volume weighted average trading price of Cadiscor's shares for the period ended March 31,
2009.
"The acquisition of Cadiscor is an
important step in growing our precious metals business by adding additional
gold to our significant palladium resources. Our acquisition focus will
continue to be gold with the objective of growing NAP to be a mid-tier
precious metal producer operating in mining friendly
jurisdictions," said William Biggar,
President and Chief Executive Officer of NAP. "As experienced
miners, NAP's expertise will assist Cadiscor to fast-track the resumption of gold
production at its Sleeping Giant mine in the Abitibi region, and
evaluate and advance its Discovery Project and other prospective gold
exploration properties in Quebec.
The combination with Cadiscor increases the
attractiveness of NAP for investors seeking exposure to multiple
precious metals while minimizing currency and political risks."
Michel Bouchard, President and Chief Executive Officer of Cadiscor, stated: "This transaction gives Cadiscor shareholders an attractive premium for
their shares, and significant upside to future increases in the price
of palladium and gold. NAP brings not only a strong balance sheet with
the capital to quickly restart the Sleeping Giant mine in 2009, but
also mining personnel with significant experience in developing and
operating underground mines, a large resource of over 3.7 million
ounces of palladium at its mine in Thunder Bay, and a highly liquid
stock which will be a benefit to Cadiscor
shareholders."
Transaction Details
Under the terms of the transaction, shareholders of Cadiscor
will receive 0.33 common shares of NAP for each common share of Cadiscor held. This will result in NAP issuing approximately
14.3 million shares to Cadiscor shareholders,
who will own approximately 14% of NAP on completion of the transaction.
The transaction has been structured as a plan of arrangement under the
Canada Business Corporations Act, and is subject to approval by the
shareholders of Cadiscor and by applicable
stock exchanges. The required shareholder approval will be two-thirds
of the votes cast by Cadiscor shareholders at
a special meeting to consider the transaction. The transaction has been
structured to allow Cadiscor shareholders to
receive shares of NAP on a tax-deferred basis for Canadian income tax
purposes. Cadiscor expects to complete and
mail to its shareholders an information circular in late April and to
hold the special meeting in May 2009.
Holders of options, warrants and convertible debentures of Cadiscor will continue to be entitled to exercise
their securities for NAP shares in lieu of Cadiscor
shares, based on the Exchange Ratio.
The definitive agreement includes a commitment by Cadiscor
not to solicit alternative transactions. In certain circumstances, if Cadiscor terminates the definitive agreement to
enter into another transaction, then Cadiscor
is obligated to pay to NAP a termination payment of $1 million. NAP
also has the right to match competing offers that may be made to Cadiscor.
Cadiscor's board will have the right to
nominate a director to join the board of NAP following the closing of
the transaction.
Coincident with the signing of the definitive agreement, NAP has
advanced to Cadiscor a total of $7.5 million,
pursuant to the purchase of a $5.4 million, 12% convertible debenture,
and a $2.1 million, 12% debenture, the proceeds of which will be used
by Cadiscor to bring the Sleeping Giant mine
back into production. Both debentures have a term of 18 months, and are
secured by a first charge on Cadiscor's
assets. The convertible debenture is convertible into Cadiscor common shares at $0.50 per share, which,
on full conversion, would constitute a 19.9% shareholding in Cadiscor.
The Board of Directors of Cadiscor is
unanimously recommending approval of the transaction by their
shareholders. Cadiscor directors intend to
vote their shares in favour of the transaction.
NAP's financial advisor is Haywood Securities
Inc. and its legal counsel is Stikeman
Elliott LLP. Cadiscor's financial advisor is
Macquarie Capital Markets Canada Ltd. and its legal counsel is Miller
Thomson LLP.
About Cadiscor Resources
Cadiscor Resources is a gold exploration
company with properties in the Province of Quebec.
Cadiscor's main asset is the Sleeping Giant
underground mine and milling facilities, situated about 80 kilometres
north of Amos, Quebec. A feasibility study released in October 2008
identified sufficient mineral reserves to operate for 16 months at a
rate of 52,000
ounces of gold per year, and mineral resources
that could potentially double the mine life. The company's other
significant asset is the Discovery Gold Project, located 70 kilometres
from Sleeping Giant. A scoping study released in August 2008
demonstrated that the project could produce an average of 44,000 ounces
of gold over a 4-year mine life.
About North American palladium
North American palladium is a precious metals company that owns one of North America's largest palladium mines,
historically producing approximately 4% of global palladium supply. The
Company's palladium production at its Lac des Iles mine is strengthened
by a significant contribution from platinum, gold, nickel and copper
by-product metals.
The Lac des Iles mine was placed on temporary care and maintenance in
October 2008 due to low metal prices. Prior to the temporary shutdown,
the mine had annual production of 270,000 ounces
of palladium, 20,000
ounces of platinum and 20,000 ounces
of gold. The mine, which can be quickly restarted upon a strengthening
of metal prices, hosts in situ measured and indicated mineral resources
of 3.7 million ounces of palladium, 300,000 ounces
of platinum and 250,000
ounces of gold, giving investors significant
leverage to an increase in commodity prices. The Company benefits from
operating in a politically stable jurisdiction with developed
infrastructure and a history of innovation and excellence in mining. Please
visit www.napalladium.com for more information.
Cautionary Statement on Forward-Looking Information
Certain information included in this press release, including any
information as to our future financial or operating performance and
other statements that express management's expectations or estimates of
future performance, constitute 'forward-looking statements' within the
meaning of the 'safe harbor' provisions of
the United States Private Securities Litigation Reform Act of 1995 and
Canadian securities laws. The words 'expect', 'believe', 'will',
'intend', 'estimate' and similar expressions identify forward-looking
statements. Forward-looking statements are necessarily based upon a
number of estimates and assumptions that, while considered reasonable
by management, are inherently subject to significant business, economic
and competitive uncertainties, risks and contingencies. The Company
cautions the reader that such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause the
actual financial results, performance or achievements of North American
palladium to be materially different from the Company's estimated
future results, performance or achievements expressed or implied by
those forward-looking statements and that the forward-looking
statements are not guarantees of future performance. These statements
are also based on certain factors and assumptions. For more details on
these estimates, risks, assumptions and factors, see the Company's most
recent Form 40-F/Annual Information Form on file with the U.S.
Securities and Exchange Commission and Canadian provincial securities
regulatory authorities. In addition, there can be no assurance that the
Company's acquisition of Cadiscor will be
completed or, if completed, that it will be successful, and there can
be no assurance that the Sleeping Giant mine will be successfully
restarted or that Cadiscor's other properties
can be successfully developed. The Company disclaims any obligation to
update or revise any forward-looking statements, whether as a result of
new information, events or otherwise, except as expressly required by
law. Readers are cautioned not to put undue reliance on these
forward-looking statements.
|