- Aug. 6, 2009) - Paramount Gold and Silver Corp. (NYSE
has executed agreements with its two largest stockholders supporting
the proposed transaction with Klondex Mines Ltd. (TSX:KDX)(OTCBB:KLNDF)
("Klondex") representing 30,000,000 shares of common stock on
a fully diluted basis, of which 18,000,000 shares of common stock are
currently issued and outstanding.
Paramount and Klondex have signed a binding letter agreement (the
"Letter Agreement") to combine the two companies under a plan
of arrangement, in a transaction valued at approximately C$80 million
(the "Transaction") based upon the closing price for
Klondex's common shares on July 17, 2009. Pursuant to the Letter
Agreement, each Klondex share will be exchanged for 1.45 Paramount
shares, implying a purchase price of C$2.32 per Klondex share and
representing a premium of 33.3% using closing share prices on the TSX
on July 17, 2009, when the Paramount bid was announced.
FCMI Financial Corp. ("FCMI"), a corporation controlled by
Albert D. Friedberg and Paramount's largest stockholder, has committed
its 12,000,000 shares of common stock and its 12,000,000 warrants to
purchase shares of common stock (exercisable commencing September 20,
2009) in support of the proposed transaction. FCMI has further
indicated its financial support of a minimum of C$5,000,000 to a
maximum of C$15,000,000 to fund future development programs at both the
San Miguel and Fire Creek projects.
Garibaldi Resources Corp. (TSXV:GGI) has also pledged its 6,000,000
shares of common stock in support of the proposed transaction. Steve
Regoci, President of Garibaldi Resources Corp. stated, "We support
this transaction on the basis that it is accretive to the Paramount
stockholders and the company has the expertise and financial backing to
bring the Fire Creek Project through the development stage and deliver
significant stockholder value."
Paramount and Klondex are currently preparing the materials for the
meetings of their security holders and to submit to the appropriate
regulators to obtain the approvals necessary to consummate the
For further details of the Transaction, please see the
Paramount/Klondex joint news release dated July 20, 2009, Paramount's
filings with the United States Securities and Exchange Commission (the
"SEC") available on www.sec.gov and the applicable Canadian securities
regulators available on www.sedar.com
and Klondex's filings with the applicable Canadian securities
regulators available on www.sedar.com.
About Paramount Gold and Silver Corp.
Paramount Gold and Silver Corp. is a precious metals exploration
company listed on the Toronto Stock Exchange and the NYSE Amex under
the symbol "PZG", and listed on the Deutsche Borse
Paramount holds a 100% interest in the San Miguel Project and has
completed 47,560 meters of diamond drilling on 213 holes and 3,743
meters of exploration trenching at San Miguel since the summer of 2006.
Paramount has recently expanded its land holdings by acquiring a 100%
interest in the Temoris Project from Garibaldi Resources Corp.; a land
package of over 54,000 hectares. Paramount's land package now includes
most of the ground surrounding Coeur d'Alene Mines (NYSE:CDE) Palmarejo
Mine project and is in excess of 140,000 hectares. For more
information, visit www.paramountgold.com. The information on
Paramount's website is not, and shall not be deemed to be, a part of
this release or incorporated into any filings with the SEC or Canadian
securities regulatory authorities.
Additional Information About the Transaction and Where to Find It
In connection with the Transaction, Paramount expects to file with the
SEC a proxy statement which will be sent to the stockholders of
Paramount seeking their approval of the merger. In addition, Paramount
may file other relevant documents concerning the Transaction with the
SEC. Security holders are urged to read the proxy statement and other
relevant documents when they become available because they will contain
important information about the Transaction.
Security holders of Paramount may obtain free copies of these documents
through the website maintained by the SEC at http://www.sec.gov.
Security holders of Paramount may also obtain free copies of these
documents by directing a request by telephone or mail to Paramount Gold
and Silver Corp., 346 Waverley Street, Suite 100, Ottawa, Ontario
Canada K2P OW5 (telephone: (613) 226-9881) or by accessing these
documents at Paramount's website: www.paramountgold.com under "Investors".
The information on Paramount's website is not, and shall not be deemed
to be, a part of this release or incorporated into other filings made
with the SEC or Canadian securities regulatory authorities.
Paramount and its directors, executive officers and members of
management may be deemed to be participants in the solicitation of
proxies from the stockholders of Paramount in connection with the
Transaction. Information about the directors and executive officers of
Paramount is set forth in the proxy statement for its 2009 annual
meeting of stockholders filed with the SEC on January 8, 2009 and in
its Form 8-K filed with the SEC on March 23, 2009. Information
regarding the interests of these participants and other persons who may
be deemed participants in the Transaction may be obtained by reading
the proxy statement regarding the Transaction when it becomes
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
Statements in this document regarding the Transaction, approvals to
consummate the Transaction, the expected timetable for completing the
Transaction, benefits and synergies of the Transaction, future
opportunities for the combined company, expectations regarding the
value and benefits of the Transaction and any other statements about
Paramount or Klondex managements' future expectations, beliefs, goals,
plans or prospects constitute forward-looking statements within the
meaning of the United States Private Securities Litigation Reform Act
of 1995 and statements containing the words "believes,"
"plans," "anticipates," "expects,"
estimates and similar expressions) should also be considered to be
forward-looking statements. There are a number of important factors
that could cause actual results or events to differ materially from
those indicated by such forward-looking statements, including, but not
limited to: the ability of the parties to consummate the Transaction
and satisfy the conditions thereunder; the ability to obtain, and the
timing of, the necessary exchange, regulatory and shareholder or
stockholder approvals for the Transaction; the impact of any actions
taken by Silvercorp. or any other party to complicate, delay or prevent
the Transaction; the ability to realize the anticipated synergies and
benefits from the Transaction and the combined company; and the other
factors described in Paramount's Annual Report and Annual Information
Form on Form 10-K for the year ended June 30, 2008 and its most recent
quarterly reports filed with the SEC available on www.sec.gov and
applicable Canadian securities regulators available on www.sedar.com and
Klondex's filings with the applicable Canadian securities regulators
available on www.sedar.com.
Except as required by applicable law, each of Paramount and Klondex
disclaim any intention or obligation to update any forward-looking
statements as a result of developments occurring after the date of this