TORONTO, May 11, 2020 /CNW/ - Guyana Goldfields Inc.
(TSX: GUY) (the "Company", "we" or "our") acknowledges it has
received an unsolicited proposal from Gran Colombia Gold Corp.
("Gran Colombia") to acquire all of the issued and outstanding
common shares of the Company at a share exchange ratio of 0.142
Gran Colombia shares for each Guyana Goldfields share (the "Gran
Colombia Proposal"). The Gran Colombia Proposal, which was
announced today by Gran Colombia, is conditional upon the
completion of Gran Colombia's proposed concurrent acquisition of
Gold X Mining Corp. (TSXV: GLDX, OTCQX: SSPXF).
On April 27, 2020, the Company and
Silvercorp Metals Inc. ("Silvercorp") (TSX/NYSE American:
SVM) announced a definitive agreement (the "Arrangement
Agreement") pursuant to which Silvercorp has agreed to acquire all
of the issued and outstanding shares of Guyana Goldfields by way of
a plan of arrangement under the Canada Business Corporations
Act. Under the terms of the transaction, each holder of Guyana
Goldfields shares will have the option to receive, for each Guyana
Goldfields share held, C$0.60 in cash
or 0.1195 of a Silvercorp common share (valued at C$0.60 based on the volume weighted average price
for Silvercorp common shares for the 20 trading days ended
April 24, 2020), subject to a maximum
cash consideration of C$33.2 million.
If all Guyana Goldfields shareholders elect to receive cash,
consideration for each share will consist of C$0.20 in cash and 0.0796 of a Silvercorp common
share (valued at C$0.40 based on the
volume weighted average price for Silvercorp common shares for the
20 trading days ended April 24,
2020).
The Company's board of directors (the "Board"), in consultation
with its legal counsel and financial advisors, is reviewing the
Gran Colombia Proposal to determine if it constitutes a "Superior
Proposal" as defined in the Arrangement Agreement. The Board will
provide an update to shareholders regarding its determination in
due course and does not intend to provide further updates or
comments with respect to the foregoing except as required by the
terms of the Arrangement Agreement or by law.
The Arrangement Agreement remains in effect and the Board has
not changed its recommendation in support of the transaction with
Silvercorp. There can be no assurance that the Gran Colombia
Proposal will result in termination of the Arrangement Agreement
and the execution of a definitive agreement with Gran Colombia.
Shareholders who have questions regarding the Arrangement
Agreement with Silvercorp should contact the Company's strategic
shareholder advisor and proxy solicitation agent Kingsdale Advisors
at 1-800-775-1986, or collect call outside North America at 416-867-2272, or by e-mail at
contactus@kingsdaleadvisors.com.
Advisors and Counsel
RBC Capital Markets is acting as financial advisor to Guyana
Goldfields and Fasken Martineau DuMoulin LLP is acting as Guyana
Goldfields' legal advisor. Kingsdale Advisors is acting as
strategic shareholder and communications advisor and proxy
solicitation agent.
About Guyana Goldfields Inc.:
Guyana Goldfields Inc.
is a Canadian based gold producer primarily focused on the
exploration, development and operation of gold deposits in
Guyana, South America.
Website: www.guygold.com
Forward-Looking Information
This news release
contains "forward-looking information" and "forward-looking
statements" (together, "forward-looking statements") within the
meaning of applicable securities laws. Forward-looking statements
may include, but are not limited to, statements and information
with respect to the arrangement with Silvercorp and statements in
respect of the Gran Colombia Proposal. Often, but not always,
forward-looking statements can be identified by the use of words
and phrases such as "plans," "expects," "is expected," "budget,"
"scheduled," "estimates," "forecasts," "intends," "anticipates," or
"believes" or variations (including negative variations) of such
words and phrases, or state that certain actions, events or results
"may," "could," "would," "should", "might" or "will" be taken,
occur or be achieved. Forward-looking statements are based on the
opinions and estimates of management as of the date such statements
are made and are based on various assumptions.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Such
factors include, among others: the Company's ability to complete
the arrangement with Silvercorp and the conditions precedent
thereto; general business, economic, competitive, political, health
and social uncertainties; the actual results of exploration and
development activities; accidents, labour disputes and other risks
of the mining industry; political instability and Government
action; as well as those factors discussed in the sections entitled
"Risk Factors" in the Company's management discussion and analysis
for the year ended December 31, 2019,
and AIF for the year ended December 31,
2019, each available on SEDAR at www.sedar.com.
Although the Company has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events
or results to differ from those anticipated, estimated or intended.
Forward-looking statements contained herein are made as of the date
of this news release and the Company disclaims any obligation to
update any forward-looking statements, whether as a result of new
information, future events or results, except as may be required by
applicable securities laws. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements.
SOURCE Guyana Goldfields Inc.