By Lisa Kerner
Charlotte, N.C., May 3 - The boards of directors of Coeur d'Alene Mines Corp., Bolnisi Gold NL and Palmarejo Silver and Gold Corp. unanimously approved a merger of the three companies to create one of the world's largest primary silver producers, according to a company news release.
Agreements call for Coeur d'Alene to acquire all of the shares of Bolnisi, as well as all of the shares of Palmarejo not owned by Bolnisi, in a transaction valued at about $1.1 billion and slated to close in the third quarter of 2007.
Bolnisi shareholders will receive 0.682 of a Coeur d'Alene share, or about $2.76, for each Bolnisi share they own, or may elect to receive CHESS Depositary Interests representing Coeur d'Alene shares.
Palmarejo shareholders will receive 2.715 Coeur d'Alene shares, or about $11.00, for each Palmarejo share they own.
Bolnisi and Palmarejo shareholders will also receive a cash payment equal to $0.003 per Bolnisi share and $0.003 per Palmarejo share. The companies currently own 100% of the Palmarejo Project, a silver project located in Mexico, which Coeur d'Alene plans to leverage.
Coeur d'Alene expects to issue a total of 271.3 million new shares.
The Bolnisi and Palmarejo transactions are each conditioned on the consummation of the other. However, Coeur d'Alene may waive this condition if the Palmarejo transaction does not proceed and still proceed with the Bolnisi transaction.
"With this transaction we are establishing Coeur d'Alene as the clear leader in the silver mining industry," Coeur d'Alene chairman, president and chief executive officer Dennis E. Wheeler said in the release.
"Coeur d'Alene will have an unrivaled platform of silver mines and projects, which we expect to provide substantial growth at low cost. In addition, we have performed substantial due diligence on the Palmarejo Project and are pleased to be making a substantial strategic investment in Mexico."
CIBC World Markets is acting as financial adviser to Coeur d'Alene, with Freehills, Gibson, Dunn & Crutcher LLP, Goodmans LLP and Rubio Villegas y Asociados, SC acting as legal counsel. Cormark Securities Inc. is acting as financial adviser to Bolnisi and Minter Ellison and Dorsey & Whitney LLP are acting as legal counsel. Dundee Securities Corp. is acting as financial adviser to Palmarejo's special committee and Westwind Partners Inc. has provided a formal valuation to the Special Committee of independent directors of Palmarejo and Stikeman Elliott LLP and Dorsey & Whitney LLP are acting as Palmarejo's legal counsel.
Coeur d'Alene Mines is a Coeur d'Alene, Idaho-based silver and gold producer with mining interests in Alaska, Nevada, Argentina, Australia, Bolivia, Chile and Tanzania.
Bolnisi Gold is a Sydney, Australia-based gold mining and exploration company.
Longueuil, Quebec-based Palmarejo is a silver and gold exploration company with operations in the Temoris District of Chihuahua, Mexico.
| Acquirer: | Coeur d'Alene Mines Corp.
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| Targets: | Bolnisi Gold NL and Palmarejo Silver and Gold Corp.
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| Transaction total: | $1.1 billion
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| Price per share: | Bolnisi shareholders: 0.682 of a Coeur d'Alene share or CHESS Depositary Interests representing Coeur d'Alene shares, or about $2.76, plus $0.003
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| Palmarejo shareholders: 2.715 Coeur d'Alene shares, or about $11.00, plus $0.003
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| Announcement date: | May 3
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| Expected closing: | Summer of 2007
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| Stock price for acquirer: | NYSE: CDE; $4.05 on May 2
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| Stock price for target: | ASX: BSG; A$3.30 on May 2
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| Stock price for target: | TSX Venture: PJO; C$8.69 on May 2
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