VANCOUVER, Sept. 17 /PRNewswire-FirstCall/ - Continental
Minerals Corporation (TSX-V:KMK, OTCBB:KMKCF) ("Continental" or the
"Company") announces that it has signed a letter agreement to be
acquired (the "Acquisition") by Jinchuan Group Ltd ("Jinchuan"), a
large China-based mining group for
aggregate cash consideration of approximately C$432 million pursuant to an arrangement under
the Business Corporations Act (British
Columbia) (the "Arrangement").
The letter agreement provides for the acquisition of 100% of
Continental's approximately 166 million common shares on a fully
diluted basis for C$2.60 per share.
The Acquisition price of $2.60 per
share to be paid to Continental securityholders represents a 13%
premium to the closing trading price of Continental's common shares
on September 14, 2010, the last
trading day prior to this announcement, and an 18% premium to the
volume weighted average trading price of Continental's common
shares over the last 30 trading days ending on September 14, 2010.
Each Continental stock option currently outstanding that is
exercised by the record date for participation in the Arrangement
(which date will be announced in a future news release), will
participate fully in the Arrangement. Option holders will be
entitled to vote on the Arrangement with common shareholders on an
as-if exercised basis (as a single class) at the special meeting of
Continental securityholders to be convened to consider the
Arrangement.
The Board of Directors of Continental is also proposing to
include in the Arrangement a special cash distribution of up to
C$0.10 per Continental share
outstanding immediately prior to completion of the Acquisition.
The Board, having extensively discussed the Acquisition terms
with its financial and legal advisors, has determined that the
Arrangement is fair to the Company's securityholders and is in the
best interests of the Company. Therefore, the Board will be
recommending that Continental securityholders vote in favour of the
Arrangement. The letter agreement is binding in certain respects
only and therefore completion of the Arrangement is subject to the
execution of definitive agreements and other conditions, including
approval of Continental's securityholders, approval of the
Arrangement by the British Columbia Supreme Court, certain Chinese
and Canadian regulatory approvals and customary closing conditions
for transactions of this nature.
The definitive agreements in respect of the Arrangement will
include an arrangement agreement and voting lock-up agreements with
each of the directors and officers of the Company and certain
shareholders of the Company pursuant to which such persons will
agree to support the Arrangement.
The definitive agreements will contain customary
representations, warranties and covenants of each of Jinchuan and
Continental. In addition, Continental has agreed in the letter
agreement that it will not solicit or initiate discussions
regarding any other business combination or sale of its shares or
material assets until thirty days from the date of execution of the
letter agreement, except in respect of unsolicited proposals that
the Continental Board of Directors in good faith determines could
reasonably be expected to result in a superior offer. Continental
has also granted Jinchuan a right to match competing unsolicited
proposals. The arrangement agreement will provide for a
$13.4 million break fee which could
be payable by either party in certain events. The fee would be
payable by Jinchuan to Continental if the Arrangement is not
completed by Jinchuan as a result of a breach by it of certain of
its obligations under the arrangement agreement. The break fee
would be payable by Continental to Jinchuan in certain customary
events such as the withdrawal by the Continental board of support
for the Acquisition, if the board recommends an alternative
transaction or if an alternative transaction completes within 12
months of termination of the Acquisition, if Continental breaches
certain non-solicitation covenants or it fails to timely convene a
Continental securityholders meeting to consider the Arrangement.
Jinchuan has further agreed that, after receipt of Chinese
regulatory approval of the Acquisition and prior to the Continental
securityholders meeting at which the Arrangement is to be
considered, it will transfer the entire aggregate cash
consideration payable under the Arrangement to Canada.
After execution of the definitive agreements in respect of the
Arrangement, Continental will be convening a special meeting of its
securityholders to consider the Arrangement. To meet a Jinchuan
condition of the Acquisition, the Arrangement will also accelerate
the redemption or exchange of Continental's class of preferred
shares for certain underlying marketable securities valued at
approximately $25 million.
Continental currently anticipates that the special meeting will be
held in November 2010 and that an
information circular containing detailed disclosure regarding the
Arrangement will be mailed to Continental's securityholders during
October 2010. The Arrangement will
require the approval of securityholders of Continental at the
meeting in accordance with the terms of the orders to be granted by
the Supreme Court of British
Columbia, Business Corporations Act (British Columbia) and Multilateral Instrument
61-101 "Protection of Minority Security Holders in Special
Transactions". The information circular will be filed and available
for public download at www.sedar.com and in the United States at www.sec.gov concurrently
with mailings to securityholders.
Advisers
BMO Capital Markets is sole financial advisor to Continental in
connection with the proposed Arrangement. McCarthy Tétrault LLP
acts as counsel to the special committee of the Board and Lang
Michener LLP acts as general counsel to Continental.
Sino Resources Capital Pty Ltd. and Blake, Cassels & Graydon
LLP are the financial and legal advisors to Jinchuan respectively
in respect of the Arrangement.
About Continental
Continental is a TSX Venture Exchange listed resource company
associated with the Vancouver-based Hunter Dickinson Group of
mining companies. Since 2005, Continental has focused on exploring
and unlocking the value of its large Xietongmen copper-gold
property in Tibet Autonomous Region, PRC.
About Jinchuan
Jinchuan Group is a large integrated non-ferrous metallurgical
and chemical engineering enterprise engaged in mining,
concentrating, metallurgy and chemical engineering. It produces
nickel, copper, cobalt, rare and precious metals and also some
chemical products such as sulfuric acid, caustic soda, liquid
chlorine, hydrochloric acid and sodium sulfite, together with some
further processed nonferrous metals products. The output of nickel
and platinum group metals respectively accounts for more than 90%
of the total in China. Jinchuan
Group Ltd. is the largest producer of nickel-cobalt in China.
THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER
(AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE
EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF
THIS NEWS RELEASE.
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of applicable Canadian securities laws concerning the
likelihood of the Arrangement completing. Although Continental has
attempted to identify important factors and conditions that could
prevent the Arrangement from completing there may be other
conditions or factors that are yet to be determined based in part
on the present need to negotiate definitive agreements, regulatory
filings and Court documents. There can be no assurance that
Continental's identification of conditions and completion factors
will prove to be complete or accurate, as future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements.
SOURCE Continental Minerals Corporation
Copyright . 17 PR Newswire