Endeavour to acquire Etruscan 45% minority interest with premium cash and
share offer to own 100%
HALIFAX and GEORGE TOWN, Grand Cayman, June 28 /CNW/ - Etruscan Resources Inc. ("Etruscan", TSX:EET) and Endeavour Financial Corporation ("Endeavour", TSX:EDV) are pleased to announce that they have entered into a definitive arrangement agreement by which Endeavour will acquire all of the shares of Etruscan that Endeavour does not already own. Endeavour currently owns 55% of Etruscan and will acquire the remaining 45% of Etruscan via a court-approved plan of arrangement (the "Arrangement").
Under the Arrangement, Etruscan shareholders will receive total consideration of C$0.48 per Etruscan share comprised of C$0.26 in cash plus 0.0932 of an Endeavour share, representing a premium of 33% using the 20-day volume weighted average prices of Endeavour and Etruscan on the TSX for the 20 trading day period ending June 25, 2010.
The cash component of this transaction will utilize approximately C$43 million of Endeavour's US$100 million revolving Acquisition Facility announced on June 25, 2010.
BOARD RECOMMENDATIONS & MANAGEMENT REMARKS
------------------------------------------
The boards of directors of both Etruscan and Endeavour have approved the transaction. GMP Securities L.P. is acting as financial advisor to Endeavour on this transaction. The Arrangement is a related party transaction under Multilateral Instrument 61-101 ("MI61-101"). Accordingly, the board of Etruscan struck an independent committee (the "Special Committee") of directors to review the Arrangement. The Special Committee retained Blake, Cassels & Graydon LLP as its independent legal advisors and Haywood Securities Inc. as its independent financial advisor. On the basis of advice received from its advisors and receipt of a formal valuation and fairness opinion from its independent financial advisor, the Special Committee has determined that the Arrangement is fair, from a financial point of view, and in the best interest of Etruscan's minority shareholders. Accordingly, the Special Committee and the non-Endeavour related members of the Etruscan board of directors unanimously recommend that Etruscan shareholders vote in favour of the Arrangement.
Gerald McConnell, Chairman of Etruscan and Chairman of the Special Committee that reviewed the Arrangement on behalf of the Etruscan board, commented, "This transaction gives Etruscan shareholders the opportunity to participate directly in Endeavour's broader growth strategy in the gold sector through exposure to additional gold assets and financial resources."
Neil Woodyer, CEO of Endeavour, commented, "The premium offer to the Etruscan shareholders provides compelling value and allows participation in Endeavour's value creating gold strategy. Acquiring the 45% minority interest in Etruscan is an exciting progression of our gold strategy. We have been active shareholders of Etruscan since October 2009 and have been pleased with the quality of Etruscan's producing and exploration assets and its management and operating teams."
BENEFITS TO ETRUSCAN'S 45% MINORITY SHAREHOLDERS
------------------------------------------------
In addition to an immediate premium for Etruscan shares, payable in both cash and Endeavour shares, the Arrangement provides other benefits to the Etruscan shareholders, including:
- Participation in a gold company with increased operating
diversification and increased leverage to rising gold prices
- 13.6% ownership of Endeavour on a pro forma basis
- Exposure to Crew Gold's unhedged LEFA gold production and restarted
exploration program
- Significantly increased share liquidity
- Endeavour has 14 times more daily-value traded than Etruscan, over
the last 6 months
- Combined, improved financial strength and access to finance
- Endeavour has a US$100 million revolving Acquisition Facility
recently provided by Unicredit AG that is available to fund new
gold acquisitions or capital investments in present or potential
operations
- Endeavour's on-going operating revenue
- Near-term valuation upside as Endeavour continues to grow as a gold
company
- The growth and success of Endeavour's gold strategy is positioning
Endeavour for inclusion in the gold producer peer group
- Experienced company building and financing team with a successful
growth strategy
- Endeavour and its exclusive advisor, Frank Giustra of Fiore
Financial Corporation, have launched and helped build numerous
companies, including several gold producers that now rank among the
leading intermediates in the sector
- Endeavour, through its general merchant banking and advisory
business, has the manpower, skills and market & industry
intelligence to drive the growth of the gold business.
SUMMARY OF THE TRANSACTION
--------------------------
Endeavour's acquisition of Etruscan will be completed via a court-approved plan of arrangement under Nova Scotia law whereby:
(a) each Etruscan shareholder will receive 0.0932 of an Endeavour share
plus C$0.26 in cash for each Etruscan share;
(b) each Etruscan warrant will be replaced with a new warrant entitling
the holder to receive 0.0932 of an Endeavour share plus C$0.26 in
cash on exercise of such warrant, at the same aggregate exercise
price of the original Etruscan warrant, and otherwise on the same
terms as the existing Etruscan warrant; and
(c) each Etruscan option will be replaced with a new option entitling the
holder to receive that number of Endeavour shares equal to the
relative trading prices of Etruscan to Endeavour shares on the 5
trading days leading up to the effective date of the Arrangement,
with the exercise price adjusted on the same basis, and otherwise on
the same terms as the existing Etruscan option.
A special meeting of Etruscan's shareholders is expected to be held in Halifax in August 2010 to obtain necessary shareholder approval including approval by greater than 50% of Etruscan shareholders (excluding Endeavour's 55% and shares held by Endeavour's affiliates) present in person or by proxy voting at the special meeting as required by MI61-101. The Arrangement Agreement requires Endeavour to apply to the TSX to list the replacement warrants issued in respect of currently listed Etruscan warrants. Endeavour's shares will remain the same and no action is required by its shareholders. Completion of the Arrangement is subject to the satisfaction of certain conditions, including the approval of the TSX, approval of the Etruscan shareholders and approval of the Nova Scotia Supreme Court. It is anticipated that the Arrangement will be concluded in the third calendar quarter of 2010. The Arrangement may be terminated if certain conditions are not met, with a termination fee payable in certain circumstances.
A management information circular containing details of the Arrangement is expected to be mailed prior to July 15, 2010.
ENDEAVOUR'S GOLD OPERATIONS
---------------------------
On completion of the Arrangement, Endeavour will own 100% of Etruscan and 43.21% of Crew Gold Corporation ("Crew Gold"). Endeavour's gold operations will have the following profile:
- The combined Youga and LEFA Mines will produce 350,000 ozs of annual
production, with approximately 189,000 ozs attributable to Endeavour
- 270,000 ozs from Crew Gold's LEFA Mine, Guinea, West Africa, based
on Crew Gold's public guidance of 20,000 to 25,000 ozs per month
averaged at 22,500 ozs per month.
- 80,000 ozs from Etruscan's Youga Mine, Burkina Faso, West Africa,
based on Etruscan's public guidance, of which 90% is attributable
to Etruscan.
- Etruscan and Crew Gold's combined gold resources (measured and
indicated) are 6.5 million ozs, with approximately 3.9 million ozs
attributable to Endeavour
- Crew Gold's Measured and Indicated resources amount to 4.6 million
ounces. Inferred resources amount to 0.59 million ounces
- Etruscan's attributable Measured and Indicated resources amount to
1.9 million ozs. Inferred resources amount to 0.80 million ounces
- Etruscan and Crew Gold's combined gold reserves (proven and probable)
are 4.0 million ozs, with approximately 2.3 million ozs attributable to
Endeavour
- Crew Gold's Proven and Probable reserves amount to 3.0 million
ounces
- Etruscan's Proven and Probable reserves amount to 1.0 million
ounces
The above resource and reserve estimates were derived from the public disclosure records of each of Crew and Etruscan. Further information regarding these estimates (including a presentation of the estimates broken down by each of the resource and reserve categories required by NI 43-101) is included in the appendix to this news release. Stephen Stine P.E., the Chief Operating Officer of Etruscan, is the Qualified Person overseeing Etruscan's production and development projects and Kirk Woodman, P.Geo., Etruscan's Chief Geologist, is the Qualified Person overseeing Etruscan's exploration projects. Both Mr. Stine and Mr. Woodman have reviewed this press release.
CONFERENCE CALL - Wednesday, June 30, 2010 at 1pm Eastern / 10am Pacific
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Gerald McConnell, Chairman of Etruscan and Neil Woodyer, CEO of Endeavour will host a special joint web cast and teleconference call on Wednesday, June 30, 2010 at 1pm Eastern time, 10am Pacific time to discuss the transaction. The web cast can be webcast by V-Call and can be accessed through Etruscan's website at www.etruscan.com and Endeavour's website at www.endeavourfinancial.com or by calling the operator at (201) 689-8567 or toll free 1-877-407-0782 prior to the scheduled start time.
About Etruscan Resources Inc.
Etruscan is a gold-focused Canadian mining company with dominant land positions in West Africa. Etruscan's principal mine projects include the Youga Gold Mine in Burkina Faso; the Agbaou Gold Project in Côte d'Ivoire; and the Finkolo Gold Project in Mali. Exploration programs and initiatives are on-going in Burkina Faso, Mali, Côte d'Ivoire, Ghana and Namibia. The common shares of Etruscan are traded on the Toronto Stock Exchange under the symbol "EET".
For additional information, please visit our corporate website, www.etruscan.com
About Endeavour Financial Corporation
Endeavour is a gold company with active, strategic investments in gold producing companies. Endeavour also has a merchant banking business that adds the manpower, skills and market & industry intelligence to drive the primary gold business. The merchant banking business offers financial advice (debt, equity, M&A and strategic business development) and financings to natural resource clients. Accessing its global industry networks, Endeavour creates and launches new growth companies as both an advisor and investor.
For additional information, please visit our corporate website, www.endeavourfinancial.com
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. The foregoing information may contain forward-looking information relating to the future performance of Endeavour Financial Corporation. Forward-looking information, specifically, that concerning future performance, is subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties are detailed from time to time in the Corporation's filings with the appropriate securities commissions.
APPENDIX
ETRUSCAN AND CREW GOLD - RESERVE AND RESOURCES
This press release references certain reserve and resource amounts for both Etruscan and Crew Gold. Mr. David Laing, a Qualified Person as defined under NI 43-101, has reviewed the disclosure contained in this news release on behalf of Endeavour. Mr. Laing is employed by Endeavour in the capacity of Director of Mining.
The tables below are extracted from Etruscan and Crew Gold's current public disclosure with respect to their NI 43-101 compliant reserves and resources. Additional information is available under Etruscan and Crew Gold's profiles at www.sedar.com
Crew Gold - Reserves
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Estimated mineral reserves on the LEFA Concession (31 August 2009)
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Proven Probable Total
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Deposit kt g/t k oz kt g/t k oz kt g/t k oz
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LEFA
Corridor
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Lero-Karta 17,697 1.7 941 8,092 1.7 453 25,789 1.7 1,394
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Fayalala 21,822 1.2 844 566 1.2 21 22,388 1.2 865
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Kankarta 1,911 1.7 106 544 1.6 28 2,455 1.7 134
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Firifirini 4,041 1.7 219 4,041 1.7 219
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Banko 334 3.2 34 34 2.7 3 368 3.2 37
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Folokadi 395 1.8 23 1,072 2.1 72 1,467 2 95
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Toume Toume 258 1.5 12 258 1.5 12
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Stockpiles/HL
Pads 6,784 0.9 187 2,307 0.7 54 9,091 0.8 241
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TOTAL 48,943 1.4 2,136 16,914 1.6 862 65,858 1.4 2,998
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Crew Gold - Resources
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Estimated mineral resources on the LEFA Concession (31 August 2009)
Measured Indicated
Deposit kt g/t k oz Kt g/t k oz
-------------------------------------------------------------------------
LEFA Corridor
Lero-Karta 26,819 1.4 1227 13,065 1.5 639
Fayalala 46,390 1 1465 5,042 1 155
Kankarta 2,844 1.4 129 1,171 1.3 48
Firifirini 3,779 1.6 188 1,951 1.4 85
Banko 975 1.9 58 446 1.3 18
Folokadi 545 1.5 27 1,746 1.7 93
Toume Toume 218 1.4 10 497 1.3 21
Sanou Kono 1,629 1.2 60
Stockpiles 6,801 0.9 197
Heap Leach 2,313 0.8 57
Sub-total 88,371 1.2 3,300 27,860 1.3 1,177
Regional
Banora 2,196 1.7 119 598 1.5 29
Diguili
Bougoufe
Dar Salaam
Diguili North
Banora West
Hansaghere
Sikasso
Solabe
Sub-Total 2,196 1.7 119 598 1.5 29
TOTAL 90,567 1.2 3,419 28,458 1.3 1,206
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Measured + Indicated Inferred Cutoff
Deposit
kt g/t k oz kt g/t k oz g/t
-------------------------------------------------------------------------
LEFA Corridor
Lero-Karta 39,884 1.4 1866 2,784 1.3 117 0.5
Fayalala 51,432 1 1620 3,877 1.1 132 0.5
Kankarta 4,015 1.4 177 99 1.3 4 0.5
Firifirini 5,730 1.5 273 1,084 1.6 54 0.5
Banko 1,421 1.7 76 223 0.9 6 0.4
Folokadi 2,291 1.7 120 689 2 45 0.4
Toume Toume 715 1.3 31 512 1.3 22 0.5
Sanou Kono 1,629 1.2 60 0.7
Stockpiles 6,801 0.9 197
Heap Leach 2,313 0.8 57
Sub-total 116,231 1.2 4,477 9,268 1.3 380
Regional
Banora 2,794 1.7 148 330 1.6 17 0.7
Diguili
Bougoufe 273 2.1 18 0.8
Dar Salaam 522 1.1 18 0.8
Diguili North 1,782 1.4 78 0.8
Banora West 432 1.5 21 0.8
Hansaghere 511 1.1 18 0.8
Sikasso 584 1.4 26 0.8
Solabe 371 1.5 18 0.8
Sub-Total 2,794 1.7 148 4,805 1.4 214
TOTAL 119,025 1.2 4,625 14,073 1.3 594
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1. Mineral resources are not mineral reserves and do not have
demonstrated economic viability. The estimate of mineral resources may
be materially affected by environmental, permitting, legal, title,
socio-political, marketing, or other relevant issues.
2. The quantity and gold grade of reported inferred resources in this
estimation are uncertain in nature, and there has been insufficient
exploration to define these Inferred resources as an Indicated or
Measured mineral resource. Further exploration drilling is required to
determine whether they can be upgraded to an Indicated or Measured
mineral resource category.
3. The Measured and Indicated Mineral Resources are inclusive of those
Mineral Resources modified to produce Mineral Reserves.
The information regarding Crew Gold's resources and reserves has been derived from the report titled "Disclosure of Mineral Resources and Reserves, Lefa Gold Mine, Northeast Guinea Technical Report Update" dated November 2009 by Messrs. Neil Hepworth, Edgar Urbaez, Kevan Walton, and Nicolas Johnson which is available under Crew Gold's profile at www.sedar.com
Etruscan Resources
Reserves and Resources
Updated as of December 31, 2009
Reserves (oz) - Gold
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Proven & Price
Project Proven Probable Probable (USD)
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Youga(1) 280,000 193,000 474,000 US$700
Total Attributable - 90% 252,000 174,000 427,000
Agbaou(2) 731,000 731,000 US$1,000
Total Attributable - 85% 621,000 621,000
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Total 280,000 924,000 1,205,000
Total Attributable 252,000 795,000 1,048,000
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Resources (oz) - Gold
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Measured &
Project Measured Indicated Indicated Inferred Cutoff
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Youga(1) -
Total 302,605 406,165 708,770 111,386 0.5 g/t
Attributable -
90% 272,000 366,000 638,000 100,000
Agbaou(2) -
Total 1,015,000 1,015,000 272,000 0.5 g/t
Attributable -
85% 862,750 862,750 231,200
Finkolo(3) -
Total 242,000 445,000 687,000 301,000 0.5 g/t
Attributable -
40% 96,800 178,000 274,800 120,400
Youga Satellite
(4,5) - Total 128,000 128,000 62,000 0.5 g/t
Attributable -
90% 115,200 115,200 55,800
Ouare(6) -
Total 323,000 0.5 g/t
Attributable -
90% 290,700
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Total 544,605 1,994,165 2,538,770 1,069,386
Total
Attributable 368,800 1,521,950 1,890,750 798,100
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(1) Youga Mining Study - October 2006 Update, Youga Gold Project, Burkina
Faso, West Africa, dated October 2006, prepared by RSG Global (Pty)
Ltd. and MDM Ferroman (Pty) Ltd. dated May 2009, updated by Etruscan
as of December 2009
(2) Feasibility Study Report on the Agbaou Gold Project, Cote d'Ivoire,
West Africa for Etruscan Resources Inc, dated November 2008, prepared
by MDM Engineering International Ltd. and Coffey Mining Pty Ltd.
updated by MDM Engineering International Ltd., September 2009
(3) Technical Report, Tabakoroni Gold Deposit, Mali, West Africa, dated
July 31, 2009 prepared by K. Kirk Woodman, P. Geo.
(4) Nanga Deposit, Etruscan Internal Resource Estimate, dated May 2008,
prepared by A. Mouton, P.Geo.
(5) Tail Deposit, Etruscan Internal Resource Estimate, dated November
2008, prepared by A. Mouton, P.Geo.
(6) Ouare Deposit, Etruscan Internal Resource Estimate, dated September
2008, prepared by A. Mouton, P.Geo.
For further information: ETRUSCAN: Renmark Financial Communications Inc.: Maurice Dagenais, [email protected]; Barry Mire, [email protected], Tel: (514) 939-3989 or (416) 644-2020; Etruscan Resources Inc.: Dr. Sally Eyre, President and CEO, Tel: (902) 832-6700, [email protected]; ENDEAVOUR: Bill Koutsouras, Executive Vice President and CFO, +377 97 98 7130, [email protected]; Stephen Roberts, Director - Investor Relations & Business Development, (604) 609-6130, [email protected]; Vanguard Shareholder Solutions: 1-866-341-4111, (604) 608-0824, [email protected]
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