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Shareholders of Copper Canyon Resources
Limited (“Copper Canyon” or the “Company”) (TSX-V:CPY.v - News) have received an unsolicited
takeover bid circular issued by NovaGold Resources
Ltd. (“NovaGold”) whereby NovaGold has offered to acquire all of the shares of
Copper Canyon for an effective price of approximately $0.60 per share (the
“NovaGold Bid”).
Under the terms of the NovaGold Bid, the common shares of Copper Canyon (the
“Common Shares”) would be exchanged for common shares of NovaGold (“NovaGold
Shares”) on the basis of 0.0425 of a NovaGold
Common Share for each one Common Share, representing an effective purchase price
of approximately $0.60 per Common Share, based upon the closing price of the
Common Shares and the NovaGold Shares on the TSX
Venture Exchange (“TSX-V”) and the Toronto Stock Exchange
(“TSX”), respectively, on December 17, 2010.
Since the announcement of NovaGold’s intention to make the offer on December
20, 2010, Copper Canyon has consistently traded well above the Offer price.
Copper Canyon’s principal asset is
its 40% joint-venture interest in the Copper Canyon copper-gold-silver
property that is adjacent to the Galore Creek project, owned equally by NovaGold and Teck Resources
Ltd. In June, 2010, Copper Canyon received an NI 43-101 compliant report from
R. J. Morris, P.Geo. related
to the Copper Canyon deposit. The Morris report has been filed on SEDAR and
can be viewed in its entirety on the Copper Canyon website. Copper Canyon
also holds a 100% interest in the “Abo”
gold project located near Harrison, B.C.
In response to the Takeover Bid, the
Board of Directors has established a committee of independent directors (the
“Special Committee”) comprised of Ronald Netolitzky
(Chair), David Johnston and Neil MacDonald. Fraser Milner Casgrain
LLP. has been retained as Special Legal Counsel and
Primary Capital Inc. (“PCI”) has been retained as Financial Advisor.
PCI is a privately owned exempt market dealer based in Toronto, Canada
specializing in financing and advising early-stage public companies requiring
development capital for growth (www.primarycapital.ca).
Work is now underway by the Copper Canyon
Board to prepare a response in the form of a Director’s Circular. This
document will be issued no later than February 2, 2011 and will include
an opinion from the Company’s Financial Advisor and a formal
recommendation whether to accept or reject the NovaGold
Bid from the Copper Canyon Board.
Discussions with Copper Canyon’s
shareholders, which together with insiders control a substantial percentage
of Copper Canyons’ fully diluted shares, have indicated strong support
for Copper Canyon’s management and a belief in the long-term value of
the Company’s assets.
The Directors’ Circular, when it
becomes available, will be mailed to shareholders and filed with the Canadian
provincial securities regulators on SEDAR at www.sedar.com.
The Directors’ Circular may also be obtained for free, once it has been
mailed, on Copper Canyon’s website or by directing a request to Copper
Canyon’s corporate secretary at Suite 200, 44-12th Avenue S., Cranbrook, British Columbia, Canada V1C 2R7, telephone
(250) 426-0749.
The Copper Canyon Board recommends that
shareholders take no action in respect of the NovaGold
Bid pending completion of the Special Committee’s review and the
issuance of the Directors’ Circular.
About Copper Canyon
Copper Canyon Resources was created by
way of a Plan of Arrangement on June 9, 2006. Shareholders of Eagle Plains
Resources Ltd. (TSX-V:EPL.v - News) approved the plan to
reorganize the company’s mineral property assets in an effort to
maximize shareholder value. Under the terms of the arrangement, three of
Eagle Plain’s projects: Copper Canyon, Severance and Abo (Harrison) Gold, were transferred into Copper Canyon.
On behalf of the Board of Directors
Signed
“Tim J. Termuende”
President and CEO
The TSX Venture
Exchange has not reviewed and does not accept responsibility for the adequacy
or accuracy of this release. This news release may contain forward-looking
statements including but not limited to comments regarding the timing and
content of upcoming work programs, geological interpretations, receipt of
property titles, potential mineral recovery processes, etc. Forward-looking
statements address future events and conditions and therefore, involve inherent
risks and uncertainties. Actual results may differ materially from those
currently anticipated in such statements
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