Fronteer Development Group Inc. to Seek to Acquire NewWest Gold Corporation; Enters Into Agreement With Significant Shareholder
Lakewood, Canada (ots/PRNewswire) -
NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
Fronteer Development Group (TSX and AMEX - FRG)("Fronteer") and NewWest Gold Corporation (TSX- NWG)("NewWest") announced today that Fronteer has entered into a lock-up agreement (the "Lock-Up Agreement") with NWG Investments Inc. (the "Significant Shareholder"), the owner of approximately 86% of the outstanding common shares of NewWest, pursuant to which the Significant Shareholder has agreed to tender to and support a transaction (the "Proposed Transaction") whereby Fronteer would seek to acquire all of the outstanding common shares of NewWest on the basis of 0.26 of one common share of Fronteer for each common share of NewWest.
Fronteer and NewWest have entered into a mutual confidentiality agreement pursuant to which NewWest has granted to Fronteer a 30 day exclusivity period in which to complete due diligence and pursuant to which NewWest has agreed not to solicit other proposals. Fronteer and the Significant Shareholder have also entered into an exclusivity agreement pursuant to which the Significant Shareholder has agreed not to solicit other proposals for a 30 day period. The Lock-Up Agreement permits the Significant Shareholder to tender its NewWest common shares to a superior transaction in certain circumstances and subject to certain conditions, including offering Fronteer an opportunity to match any such proposal and the payment by the Significant Shareholder of a termination fee to Fronteer in the amount of C$5.6 million.
Fronteer's obligation to proceed with the Proposed Transaction is subject to a number of conditions including Fronteer being satisfied, in its sole and absolute discretion, with its due diligence investigations. The Significant Shareholder can terminate the Lock-Up Agreement in certain circumstances, including if Fronteer has not made an offer to all holders of NewWest common shares by August 17, 2007. Under the Proposed Transaction, the exchange ratio of 0.26 common shares of Fronteer for each issued share of NewWest represents a value of approximately C$3.20 per share based upon the closing price of Fronteer on the TSX on June 28, 2007. This represents a premium of 36.17% to the closing price of NewWest's shares on the TSX on June 28, 2007 and 37.93% based on the 20 day volume weighted average trading price of NewWest's common shares on the TSX.
There are currently 67,857,681 Fronteer common shares outstanding and 58,392,000 NewWest common shares outstanding. Should the Proposed Transaction be completed and Fronteer acquires 100% of the NewWest common shares, current Fronteer shareholders would own approximately 81.7% of Fronteer and current NewWest shareholders would own approximately 18.3% of Fronteer.
A special committee of the NewWest board of directors has been established to consider the transaction. The committee has not yet made any recommendation to the board of directors of NewWest in respect of the proposed transaction.
NewWest has engaged GMP Securities L.P. as its financial advisor and Stikeman Elliott LLP as its legal advisor. Fronteer's financial advisor is Canaccord Capital Corporation and its legal counsel is Cassels Brock & Blackwell LLP. The Significant Shareholder is being advised by Goodmans LLP.
No agreements have been reached between NewWest and Fronteer, other than the confidentiality agreements described above. There can be no assurances that any agreements will be reached or that a transaction will result.
Fronteer is an exploration and development company with a track record of making big discoveries. Not including the results of the above transaction, Fronteer will have exposure to approximately C$42 million in exploration/development expenditures and 130,000 metres of drilling throughout 2007. Fronteer has approximately $105 million in cash, no debt, and holds approximately a 46.8% interest in Aurora Energy Resources (AXU - TSX), a leading Canadian uranium company with a market valuation in excess of C$1.1 billion.
For further information on Fronteer visit www.fronteergroup.com
NewWest is one of the largest holders of precious metals mineral rights in Nevada's gold trends, spanning approximately 623,000 acres. NewWest holds 19 exploration projects, including advanced-stage projects with measured and indicated resources. NewWest's goal is to move its projects into production.
For further information on NewWest visit www.newwestgold.com
This news release includes certain "forward-looking statements" within the meaning of Canadian securities laws. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed in such forward-looking information. Forward-looking information in this news release includes but is not limited to, a transaction with Fronteer, economic performance, statements regarding potential mineralization and reserve exploration, and future plans and objectives of NewWest Gold Corporation including future exploration and development.
Any number of important factors could cause actual results to differ materially from these forward-looking statements, including those set out in the Company's Annual Information Form as of December 31, 2006, as well as future results. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed timeframes or at all. The Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
ots Originaltext: NewWest Gold Corporation
Im Internet recherchierbar: http://www.presseportal.ch
Fronteer contact: Camon Mak, Investor Relations, Glen Edwards, Media
Relations, PH) +1-604-632-4677 or Toll Free 1-877-632-4677,
email@example.com. NewWest Gold Corporation, Stephen Alfers,
President and Chief Executive Officer, PH) +1-303-425-7042