Brussels, Belgium, June 21, 2010 --(PR.com
)-- Please Note: All news in this release is summarized. To read the full report, go to www.caesarsreport.com, and sign up Free to receive the full report.
Apollo Gold Corp. and Linear Gold Corp. are ready to merge their respective businesses to create a new mid-tier gold player listed in Toronto and New York. The merged company will be rebranded as Brigus Gold Corp., taking effect when shareholders approve the business combination. A share consolidation of one Brigus Gold share for every four Apollo common shares will take place immediately prior to the merger.
Apollo offered 5.47 shares for every outstanding Linear Gold Corp. share. All matters relating to the merger, including the proposed share consolidation and name change, will be submitted to the Apollo shareholders for approval at the shareholder meeting.
After giving effect to the merger and the consolidation, Linear shareholders will receive approximately 1.37 Brigus Gold shares for each Linearshare on completion of the Merger (5.474 divided by 4).
Brigus Gold will focus on optimizing its key Black Fox gold operations in the Timmins gold mining district in Ontario and advancing the Box deposit towards production. Brigus Gold will also continue to strategically advance its Ixhuatan and Huizopa gold projects in Mexico.
For Apollo Gold, the main reason of the merger is Linear Gold's strong cash position to repay part of its US$70 million project facility for the Black Fox Project.
Since the merger announcement, Apollo has reduced indebtedness under the US$70 million Black Fox Project to US$51.8 million, using US$10 million from the proceeds of Linear's C$25 million private placement in Apollo and US$8.2 million from the closing out of in-the-money Canadian dollar hedges.
Upon closing of the merger, the combined company will repay an additional US$10 million of project debt and plans to reduce debt to US$27 million by the end of 2010.
Combined Proven and Probable Reserves will total 2.3 million ounces of gold. When adding M&I and Inferred resources, a total of 4.76M ounces of gold is reached. The combined company will have a broad range of value creating assets, ranging from early stage exploration projects to a producing mine, all of which are located in relatively low-risk operating jurisdictions.
Total expenses in 2010 are US$35M for the Black Fox underground development, and US$19M debt for repayment, totaling US$54M.
After adding US$11M for exploration and administrative costs, the total expense for 2010 results in US$65M.
Expected incoming cashflow from operating activities is US$40M. Together with the cash injection of Linear, Brigus should be able to spend U$67M throughout 2010. This means that there is not that much margin for operating errors.
Brigus has 104M warrants outstanding,...
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