OBAN MINING TO ACQUIRE NIOGOLD MINING
Oban Mining Corp. (OBM.T) and Niogold Mining Corp. (NOX.V) have entered into a definitive arrangement agreement dated Jan. 11, 2016, pursuant to which Oban has agreed to acquire all of the issued and outstanding common shares of Niogold. The acquisition by Oban of all of the issued and outstanding NioGold Shares is expected to be completed by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia) (the “Arrangement”).
Particulars of the Transaction
Under the terms of the Arrangement Agreement, holders of NioGold Shares (“NioGold Shareholders”) will be entitled to receive 0.4167 common shares of Oban (“Oban Shares”) in exchange for each NioGold Share held, representing an implied offer price of $0.50 per NioGold Share and a premium of approximately 51.5% based on the closing price of Oban Shares on the Toronto Stock Exchange ($1.20) and NioGold Shares on the TSX Venture Exchange ($0.33) on January 8, 2016 (being the last trading day prior to the announcement of the Arrangement).
The Arrangement will require the approval of at least 66 2/3 percent of the votes cast by NioGold Shareholders at a special meeting expected to take place in March 2016 (the “NioGold Meeting”). NioGold Shareholders representing approximately 38.8% of the issued and outstanding NioGold Shares have entered into voting and support agreements with Oban in support of the Arrangement. The board of directors of NioGold, on the recommendation of its independent special committee (the “NioGold Special Committee”), has unanimously approved the Arrangement and will recommend that NioGold Shareholders vote in favour of the Arrangement.
The Arrangement will also require the approval of at least 50 percent of the votes cast by holders of Oban Shares (“Oban Shareholders”) at a special meeting expected to take place in March 2016 (the “Oban Meeting”). Oban Shareholders representing approximately 35.5% of the issued and outstanding Oban Shares have entered into voting and support agreements with Oban in support of the Arrangement. The board of directors of Oban, on the recommendation of its independent special committee (the “Oban Special Committee”), has unanimously approved the Arrangement and will recommend that Oban Shareholders vote in favour of the Arrangement.
The Arrangement Agreement includes covenants typical of transactions of this nature, including with respect to non-solicitation, a right granted to Oban to match superior proposals for NioGold and a provision entitling NioGold to a fiduciary-out. In addition, NioGold and Oban have each agreed to pay a termination fee to the other party upon the occurrence of certain events.
Full details of the Arrangement will be included in the joint management information circular of NioGold and Oban describing the matters to be considered at the NioGold Meeting and Oban Meeting, respectively, which is expected to be mailed to the NioGold Shareholders and Oban Shareholders in early February 2016 and made available on SEDAR under the issuer profiles of each of NioGold and Oban at www.sedar.com.