Kinbauri Gold Corp. Strongly Recommends that Shareholders Reject
Kinbauri Gold Corp. Strongly Recommends that Shareholders Reject
TORONTO, ONTARIO--(Marketwire - June 09, 2009) - Kinbauri Gold Corp.
(TSX VENTURE: KNB)(FRANKFURT: 3KG.DE)
A conference call with Management and members of the Board will be
held on Tuesday June 9, 2009 at 10:30 a.m. EDT
Presentation available at www.kinbaurimaximized.com,
Call in number: 416-644-3424 or 1-800-732-0232
Kinbauri Gold Corp. (TSX VENTURE: KNB)(FRANKFURT: 3KG.DE)
("Kinbauri") today announced that its Board of Directors has
unanimously recommended that Kinbauri shareholders REJECT the
unsolicited offer to purchase all of the outstanding Kinbauri shares
made by Orvana Minerals Corporation (TSX: ORV) ("Orvana") as
described in a take-over bid circular dated May 25, 2009, and that
shareholders NOT TENDER their Kinbauri shares to the Orvana offer.
The Board's recommendation, Kinbauri's Special Committee's assessment
of the Orvana offer and the reasons for the recommendation to reject
the Orvana offer are set out in a Directors' Circular which has been
mailed to Kinbauri shareholders and may be viewed in its entirety on
www.sedar.com and on Kinbauri's newly launched website
"After a full and thorough review by our Board, our Special Committee
and our financial and legal advisors, our Directors were unanimous in
recommending rejection of the Orvana offer," said Brian McEwen,
Director and member of the Special Committee. "Our Board believes the
Orvana offer is inadequate and fails to reflect the true value of
Kinbauri and its flagship El Valle Project."
The Special Committee has initiated a process that it believes should
crystallize superior value for all shareholders. The strong interest
that has been expressed to date demonstrates that Kinbauri has a
superior asset and an excellent future. The Committee intends to
surface all expressions of interest and present shareholders with a
transaction that clearly maximizes shareholder value.
Kinbauri's Board of Directors cited the following reasons to reject
- The Orvana offer significantly undervalues Kinbauri's advanced
stage El Valle Project, and its growth potential. A recent scoping
study assigned a net present value to the El Valle Project of $237
million - Orvana is offering only $33 million for the entire company.
- The EL Valle Project is expected to begin production in 2010 with
an anticipated annual output of approximately 145,000 of gold
equivalent ounces. The project is located in a highly prospective
gold region with many opportunities to expand our current resource
base. Orvana is pressuring Kinbauri shareholders to tender their
shares before we reach production and generate greater value for our
- The El Valle Project has infrastructure in place with a replacement
cost of over $100 million and an experienced mining team on the
ground in Spain. This team is familiar with the assets and is skilled
at advancing projects and operating mines. By tendering to the Orvana
offer you may forego significant value upside.
- The Orvana offer is financially inadequate. Gryphon Partners Canada
Inc. has provided an opinion that, as of June 5, 2009, the
consideration under the Orvana offer is inadequate from a financial
point of view to Kinbauri's shareholders.
- The Orvana offer is conditional and not a firm offer.
- The Orvana offer is not a "Permitted Bid" under Kinbauri's
shareholder rights plan.
- Kinbauri's officers and directors are rejecting Orvana's offer.
None of Kinbauri's directors and officers will tender their common
shares to the Orvana offer. A major independent shareholder, holding
approximately 8 percent of the common shares outstanding, has
communicated to the Board that they will not tender their shares to
the Orvana offer.
If you agree with the Board's recommendation, you do not need to take
any action. For assistance in withdrawing any shares already
tendered, or other questions, please contact Laurel Hill Advisory
Group, the Information Agent retained by Kinbauri in connection with
the Orvana Offer, toll free at 1-888-812-9184 from anywhere in Canada
or the United States and collect at 416-637-4661 from outside North
Kinbauri also announces today the launch of the website
www.kinbaurimaximized.com which provides presentations and documents
that explain why Kinbauri shareholders should reject the inadequate
hostile takeover bid from Orvana Minerals.
Note Regarding Forward-Looking Statements
This press release and other written or oral communication from the
Company may include certain statements that may be considered
"forward-looking statements" within the meaning of that phrase under
Canadian securities laws. Statements other than historical facts that
address possible future events, plans or developments are
forward-looking statements. Such statements may be identified by the
use of words such as "will", ""may", "expects", "estimate", "intend"
or the use of the future or conditional tense. Certain material
factors or assumptions were applied in drawing our conclusions and
making those forward-looking statements. Forward-looking statements
reflect management's current views with respect to possible future
events and conditions and, by their nature, are based on management's
beliefs and assumptions and subject to known and unknown risks and
uncertainties, both general and specific to the Company. Although the
Company believes the expectations expressed in such forward-looking
statements are reasonable, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those in our forward-looking statements. Readers are
cautioned that risks may change or new risks may emerge. Additional
information regarding the material factors and assumptions that were
applied in making these forward looking statements as well as the
various risks and uncertainties we face are described in greater
detail in the "Risk Factors" section of our annual and interim
Management's Discussion and Analysis of our financial results and
other continuous disclosure documents and financial statements we
file with the Canadian securities regulatory authorities which are
available at www.sedar.com and available on the Company's website at
www.kinbauri-gold.com. The Company undertakes no obligation to update
this forward-looking information except as required by applicable
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this news release.
Kinbauri Gold Corporation
Dr. Vern Rampton, P. Eng.,
Barnes McInerney Inc.
416-367-5000 ext. 248
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.