Publication of Circular
Amsterdam, January 30, 2013 - Nord Gold N.V. (“Nordgold”), an independent, internationally diversified, pure-play gold producer strategically focused on emerging markets, announces the publication of the management information circular (the “Circular”) of High River Gold Mines Ltd. (“High River”) dated January 23, 2013 relating to the upcoming meeting of securityholders of High River (the “Special Meeting”).
Such meeting is to be held on February 25, 2013 to approve a plan of arrangement (the Arrangement) under Canadian law pursuant to which, among other things, Nordgold proposes to acquire all of the High River common shares (High River Shares) not already owned by Nordgold on the same terms as under Nordgold’s recent take-over bid (the Offer) for High River Shares. Under the terms of the Offer, eligible High River shareholders who tendered their High River Shares to the Offer could elect to receive either: (i) 0.285 Nordgold global depositary receipts for each High River Share tendered; or (ii) CA$1.40 in cash for each High River Share tendered. The Offer was originally open for acceptance until November 27, 2012, but was extended until December 8, 2012.
Nordgold acquired an aggregate of 192,039,770 High River Shares under the Offer, representing approximately 91.6% of the High River Shares held by shareholders other than Nordgold as of the commencement of the Offer. As a result, Nordgold’s total ownership stake in High River is now 822,667,242 High River Shares, representing approximately 97.9% of the issued and outstanding High River Shares.
On December 21, 2012, Nordgold and High River announced that they had entered into an arrangement agreement (the Arrangement Agreement) setting out their intention to complete a statutory plan of arrangement under the Business Corporations Act (Yukon) that will allow Nordgold to acquire all of the High River Shares not already owned by Nordgold. The consideration payable under the proposed Arrangement will be identical to the consideration offered under the Offer. Thus, subject to the terms of the Arrangement, each holder of a High River Share (other than Nordgold) will be entitled to receive, at the election or deemed election of the holder, either (i) 0.285 Nordgold global depositary receipts or (ii) CA$1.40 per High River Share. The Arrangement Agreement also provides that each of the outstanding options to acquire High River Shares will be terminated as part of the Arrangement in exchange for the greater of (i) CA$1.40 less the exercise price of the option or (ii) CA$0.
An interim court order setting out the procedure for approval of the Arrangement was obtained on January 23, 2013 and the Special Meeting has been called for February 25, 2013 to approve the Arrangement.
The proposed Arrangement is expected to be completed in early March 2013 and is subject to certain conditions, including receipt of all necessary court and securityholder approvals.
In connection with the Special Meeting, Canadian law requires that High River publish and send to its securityholders an information circular providing prescribed details regarding the Arrangement, including, because High River shareholders have the option to receive Nordgold global depositary receipts as consideration under the Arrangement, prospectus-level disclosure regarding Nordgold. To comply with such mandated prospectus-level disclosure, Nordgold was required to prepare special purpose IFRS consolidated interim condensed financial statements of Nordgold as at and for the three and nine months ended September 30, 2012 (the Special Purpose Accounts) and High River was required to include such Special Purpose Accounts in the Circular.
The Special Purpose Accounts are not a restatement of Nordgold’s previously published financial statements. They are accounts specifically prepared for the purpose of complying with the applicable Canadian disclosure rules, and for no other purpose. The Special Purpose Accounts incorporate the events after the reporting, that occur between the end of the reporting period and the date when the financial statements were authorized for issue. Events after reporting date included two types of events: (a) those that provide evidence of conditions that existed at the end of the reporting period (adjusting events after the reporting period); and (b) those that are indicative of conditions that arose after the reporting period (non-adjusting events after the reporting period). The Special Purpose Accounts included non-cash adjustments for goodwill and exploration and evaluation assets resulting from the regular procedure of impairment testing conducted for the purposes of preparation of the annual accounts. The following non-cash adjustments were included in the Special Purpose Accounts: profit from operations and a net profit of USD 148,929,000 and USD 79,659,000, respectively, for the nine months ended September 2012, as compared to USD 192,484,000 and USD 123,214,000, respectively, as published in Nordgold’s 2012 Q3 financial and operating results published on November 16 2012 (the 2012 Q3 results). The difference relates to a USD 34.8 million decrease in goodwill from the acquisition of Celtic Resources Holdings Plc, a USD 6.8 million decrease in exploration and evaluation assets for the Balazhal exploration, and a USD 2.0 million decrease in mineral rights relating to the Ostantsovy mineral deposit. These are all non-cash items and, other than consequential changes to intangible assets and retained earnings, there are no other changes to the financial statements for that period: The Special Purpose Accounts report intangible assets of USD 1,208,359,000 and retained losses of USD 571,035,000, respectively, for the nine months ended September 2012 as compared to USD 1,251,914,000 and USD 473,480,000, respectively, as published in the 2012 Q3 results. See note 6. to the Special Purpose Accounts for further details of such decreases.
The Circular and related materials for the Special Meeting are being mailed to High River shareholders and optionholders. They have also been filed with Canadian securities regulators and are available to the public on the SEDAR website (www.sedar.com) under High River’s profile.
A copy of the Special Purpose Accounts has been submitted to the National Storage Mechanism and will shortly be available for inspection at: http://www.Hemscott.com/nsm.do. A copy of the Special Purpose Accounts and the Circular will also be available on Nordgold’s website at: http://nordgold.com.
This announcement may contain, in addition to historical information, certain forward-looking statements. Often, but not always, forward looking statements can be identified by the use of words such as plans, expects, expected, scheduled, estimates, intends, anticipates, or believes, or variations of such words and phrases or state that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Such forward looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements of Nordgold to differ materially from any future results, performance or achievements expressed or implied by such forward looking statements. Many of these risks and uncertainties relate to factors that are beyond Nordgold’s ability to control or estimate precisely, such as court approval of the plan of arrangement, future market conditions, changes in regulatory environment and the behaviour of other market participants. Nordgold cannot give any assurance that such forward-looking statements will prove to have been correct. The reader is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this announcement. Nordgold disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.The Nordgold global depositary receipts to be issued pursuant to the Arrangement and the Nordgold ordinary shares represented thereby (together, the Securities) have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the U.S. Securities Act). Accordingly, the Securities may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into the United States, absent registration under or an applicable exemption from the U.S. Securities Act. It is expected that the Securities will be issued in the United States in reliance upon the exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10) thereof. The Securities have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission in the United States or any other U.S. regulatory authority. Any representation to the contrary is a criminal offense in the United States.This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial performance of Nordgold or High River unless otherwise stated.