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TORONTO, ONTARIO--(Marketwire - Dec.
30, 2009) - CASTLE GOLD CORPORATION ("Castle Gold" or the
"Corporation") (TSX VENTURE:CSG) is pleased to announce that
as of the tender deadline at 11:59 p.m. (Toronto time) on December 29,
2009, 78,349,528 common shares of Castle Gold had been validly
deposited to Argonaut's offer to acquire all of the outstanding shares
of Castle Gold. Argonaut has taken up and accepted for payment all of
these shares, which represent approximately 91.25 % of the common
shares of Castle Gold on a fully diluted basis. Argonaut has stated it
will pay for these shares promptly and advises settlement is intended
to occur on or about January 4th, 2010.
Argonaut offered to acquire all of the outstanding common shares of
Castle Gold on the basis of a minimum offer price of C$1.25, for each
Castle Gold share, subject to a possible increase in the offer price
depending on the performance of an agreed gold price ratchet formula. The
final price paid for each share, in accordance with the previously
announced gold price ratchet formula, will be C$1.29 which represents
the offer price of C$1.25 increased by C$0.04 representing the
percentage increase (rounded to no decimals places) in the average of
the London PM gold fix price on December 18, 21, 22 and 23 relative to
$1,050 per ounce. No London PM gold fix price was posted on December
24th, 2009 so the average was calculated using the prices of the four
trading days. The aggregate cash consideration to be paid by Argonaut
will be approximately C$102 million, in respect of the shares tendered
to date, which equates to a total deal value of approximately C$112
million on a fully diluted basis.
A formal
process of acquisition of the balance of the outstanding Castle Gold
shares will occur as is customary in similar transactions either by
compulsory acquisition or a subsequent acquisition transaction, which
would be intended to be completed in the first quarter of 2010.
With over 90% of shares tendered, being well in excess 66 2/3, and upon
payment for the shares in accordance with the terms of the Support
Agreement, the current Board of Directors, specifically, James Mark
Plaxton, Leonard Harris, Milton Baehr, and Mark Selby, will resign and
be replaced by the slate of directors put forward by Argonaut,
specifically, Peter C. Dougherty, Brian J. Kennedy, Dale C. Peniuk, and
Christopher R. Lattanzi.
The current Board would like to take this final opportunity to thank
the management and employees of Castle Gold and its predecessor
companies who put the long hours in to safely and successfully build
and operate two gold mines and generate substantial value for
shareholders recognized through this transaction. The Board also would
like to take this opportunity to wish the new owners, new Board
members, and new management members of the Corporation continued
success.
About Castle Gold
Castle Gold Corporation is a gold producer with projects focused in the
Americas. Castle Gold owns a 100% interest in the El Castillo gold mine
in Mexico and a 50% interest in the El Sastre gold mine in Guatemala.
Castle Gold is also advancing exploration and development work at its
La Fortuna gold-silver-copper project in Mexico.
Forward Looking Statements
Certain statements in this press release constitute
"forward-looking" statements that involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Castle Gold to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. When used in
this news release, words such as "will be used",
"plans", "hope", and "expects" and
similar expressions to the extent they relate to Castle Gold are
intended to identify forward-looking statements. There is no assurance
that any strategic transaction will be completed. Unless required by
applicable securities law, Castle Gold does not assume any obligation
to update forward-looking statements.
Total Shares Outstanding: 79.2MM
Fully Diluted: 86.4MM
52-Week Trading Range: C$0.20 to $1.38
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this news release.
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