Attached files
| file | filename |
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| 8-K - CAPITAL GOLD CORP | v174036_8k.htm |
| EX-2.1 - CAPITAL GOLD CORP | v174036_ex2-1.htm |
| EX-99.2 - CAPITAL GOLD CORP | v174036_ex99-2.htm |
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CAPITAL GOLD CORPORATION AND
NAYARIT GOLD INC.
ENTER INTO BUSINESS
COMBINATION AGREEMENT
NEW YORK and HALIFAX, NS – February
11, 2010 – Capital Gold Corporation (NYSE Amex: “CGC”/TSX:CGC) (“Capital
Gold”) and Nayarit Gold Inc. (TSX:NYG) (“Nayarit”) today
jointly announced that they have entered into an agreement (the “Agreement”)
with respect to a proposed business combination in an all-share transaction
subject to the completion of satisfactory due diligence, receipt of Nayarit and
Capital Gold shareholder approval, receipt by Nayarit of a fairness opinion,
regulatory approvals and the satisfaction of certain other
conditions. The transaction is expected to close in May
2010.
Capital
Gold is a gold production and exploration company with operations in
Mexico. Nayarit is a Canadian mineral exploration company with a NI
43-101 resource estimate and a preliminary economic analysis on its flagship
property in Nayarit, Mexico.
Pursuant
to the terms of the Agreement, subject to the satisfaction or waiver of all
conditions, all of the Nayarit common shares (the “Nayarit Common Shares”)
issued and outstanding immediately prior to the consummation of the business
combination (other than Nayarit Common Shares held by dissenting stockholders of
Nayarit) shall become exchangeable into the common stock of Capital Gold on the
basis of .134048 shares of Company common stock for each one (1) Nayarit Common
Share (the “Consideration”). Following the business combination, the
surviving entity (the “Combined Entity”) will be a wholly-owned subsidiary of
Capital Gold. Upon the consummation of the business combination,
Nayarit shareholders will own approximately 19.97% of the issued and outstanding
shares of Capital Gold common stock.
“We
anticipate that the proposed business combination will significantly strengthen
both companies and add shareholder value through additional mineral and human
resources, and synergies on many levels,” stated John Brownlie, President and
Chief Operating Officer of Capital Gold. Mr. Brownlie also stated,
“Nayarit has recently through SRK Consulting (US) Inc. of Lakewood CO completed
a preliminary economic assessment on its Orion property located in the state of
Nayarit Mexico and Capital Gold at its El Chanate mine through recent
enhancements increased its gold production. Capital Gold is also working to add
additional mineral resources through its exploration efforts at its Saric
properties located a short distance from its El Chanate mine in Sonora
Mexico.”
Upon the
consummation of the business combination, the board of directors of Capital Gold
shall consist of its existing directors and one nominee of Nayarit. John
Brownlie will continue to serve as President of Capital Gold and Bradley
Langille and Colin Sutherland will join Capital Gold as senior
officers.
“We
believe the combination with Capital Gold creates both near-term and long-term
value for our shareholders” Colin Sutherland, Nayarit’s President and Chief
Executive Officer said. “The quality of the respective assets, the
strength of the management teams, along with our combined proven track record of
building value creates an exciting platform for the future.”
Each of
Capital Gold and Nayarit intend to call a special meeting of their respective
stockholders to seek approval of the business combination.
The
Agreement includes customary representations, warranties and covenants as well
as various conditions including the following:
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That
each of the board of directors of Capital Gold and Nayarit shall have
recommended to its stockholders approval of the business
combination;
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Approval
by the stockholders of Capital Gold and Nayarit of the business
combination;
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Lockup
agreements from certain of the officers and directors of Nayarit and
Capital Gold;
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Receipt
of all requisite regulatory, third party and other approvals and consents;
and
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Other
customary terms and conditions, including but not limited to
non-solicitations provisions and the payment of a U.S.$1 million break fee
by either party upon the occurrence of certain
events
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Jennings
Capital Inc. is serving as financial advisor to Capital Gold with respect to the
business combination. Ellenoff Grossman & Schole LLP is serving as U.S.
counsel, Kutkevicius Kirsh, LLP is serving as Canadian counsel, Davis Graham
& Stubbs LLP is serving as special mining counsel and Tapia, Robles y
Cabrera S.C. is serving as Mexican counsel for Capital Gold. Peterson Law is
serving as Canadian counsel and Kavinoky Cook LLP is
serving as US counsel for Nayarit.
Additional
information regarding Nayarit, the business combination and the related
transactions will be available on a Form 8-K to be filed by Capital Gold, a copy
of which may be obtained without charge, at the Securities and Exchange
Commission’s website at http://www.sec.gov. Nayarit’s website is http://www.
nayaritgold.com.
With respect to disclosure related to
Nayarit, Mr. Jeffrey Volk,
P. Geo, Principal Resource Geologist with SRK Consulting (US) Inc., is a Qualified Person (QP) as defined
in NI 43-101 and has reviewed this release.
About Capital
Gold
Capital
Gold Corporation is a gold production and exploration company. Through its
Mexican subsidiaries and affiliates, it owns 100% of the El Chanate gold
property in Sonora, Mexico. Capital Gold has also begun exploration of 4,100
hectares of owned and leased concessions near the town of Saric, 60 miles from
El Chanate. Further information about Capital Gold and the El Chanate
Gold mine is available on Capital Gold’s website,
www.capitalgoldcorp.com.
About Nayarit Gold,
Inc.
Nayarit
Gold Inc. is a Canadian junior resource company with its flagship property in
the state of Nayarit, Mexico. The Orion District is in excess of 105,000
contiguous hectares, and contains a NI 43-101 compliant Preliminary Economic
Assessment showing the potential for the mining of 1.182 million tonnes
with a gold grade of 2.79 g/t and silver grade of 267.0 g/t. Management’s
goal is to build a profitable resource company and maximize shareholder value
through successful exploration programs and continued development. Further
information is available on Nayarit’s website, www.nayaritgold.com.
Forward Looking
Statements
This
press release may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 regarding Capital Gold,
Nayarit, and the Combined Entity’s business after completion of the proposed
transactions. Forward-looking statements are statements that are not historical
facts. Such forward-looking statements, which are based upon the current beliefs
and expectations of the management of Capital Gold and Nayarit, are subject to
risks and uncertainties, which could cause actual results to differ from the
forward-looking statements. The following factors, among others, could cause
actual results to differ from those set forth in the forward-looking statements:
changing interpretations of generally accepted accounting principles, continued
compliance with government regulations, changing legislation or regulatory
environments, requirements or changes affecting the business in which Capital
Gold, and Nayarit are, and the Combined Entity will be, engaged, management of
rapid growth, intensity of competition, general economic conditions, as well as
other relevant risks detailed in Capital Gold’s filings with the SEC and
Nayarit’s current filings and the filings to be made by the Combined Entity with
securities regulatory authorities in connection with the proposed transaction.
The information set forth herein should be read in light of such risks. None of
Capital Gold, Nayarit or the Combined Entity assumes any obligation to update
the information contained in this release.
Additional Information and
Where to Find It
This
press release is being made pursuant to and in compliance with Rules 145, 165
and 425 of the Securities Act of 1933, as amended, and does not constitute an
offer of any securities for sale or a solicitation of an offer to buy any
securities. Capital Gold, Nayarit, the Combined Entity and their respective
directors and officers may be deemed to be participants in the solicitation of
proxies for the special meetings of Capital Gold’s stockholders to be held to
approve the transactions described herein. In connection with the proposed
business combination, Capital Gold will file with the SEC a preliminary proxy
statement/prospectus and a definitive proxy statement/prospectus. Capital Gold’s
stockholders are advised to read, when available, the proxy statement/prospectus
and other documents filed with the SEC in connection with the solicitation of
proxies for the special meeting because these documents will contain important
information. The definitive proxy statement/prospectus will be mailed to Capital
Gold’s stockholders as of a record date to be established for voting on the
business combination. Capital Gold’s stockholders will also be able to obtain a
copy of the proxy statement/prospectus, without charge, by directing a request
to: Capital Gold Corporation, 76 Beaver St - 14th floor, New York, NY 10005. The
preliminary proxy statement/prospectus and definitive proxy
statement/prospectus, once available, can also be obtained, without charge, at
the SEC’s website at http://www.sec.gov.
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Contacts:
Capital
Gold Corporation
Kelly
Cody, Manager, Investor Relations
Capital
Gold Corporation
Tel:
(212) 344-2785
Fax:
(212) 344-4537
Email:
kelly@capitalgoldcorp.com
Nayarit
Gold Inc.
Colin
Sutherland, CA
President
& CEO
Nayarit
Gold Inc.
Tel:
902-252-3833