Levon Resources Ltd. ("Levon") (TSX VENTURE: LVN)(BERLIN:
LO9)(FRANKFURT: LO9) and Valley High Ventures Ltd. ("Valley High")
(TSX VENTURE: VHV) announced today they have entered into a
definitive arrangement agreement under which Levon will acquire
100% of the outstanding common shares of Valley High by way of a
plan of arrangement.
Under the plan of arrangement, Valley High shareholders will
receive 1.0 share of Levon and 0.125 of a share in a new
exploration company ("SpinCo") for each Valley High share.
Excluding the SpinCo consideration, the offer represents premiums
of approximately 6% and 19% based on the volume-weighted average
prices of Valley High and Levon shares on the TSX Venture Exchange
("TSX-V") for the 20 and 60 trading days ended on January 14,
2011.
On completion of the transaction, Valley High shareholders will
hold approximately 43% and Levon shareholders will hold
approximately 57% of the pro forma outstanding shares of Levon on a
fully-diluted basis. Valley High shareholders will own 100% of the
SpinCo shares and SpinCo will own all of Valley High's exploration
assets outside of the Cordero Project and will have $1.8 million in
cash.
The board of directors of Valley High unanimously approved the
transaction and all directors and senior officers of Valley High,
as well as Coro Mining Corp. ("Coro"), collectively holding
approximately 10.5% of the number of Valley High shares anticipated
to be entitled to vote at the meeting, have agreed to vote their
securities in favour of the transaction.
Levon is currently the 51% owner and operator of the Cordero
Project, an advanced stage exploration project in Mexico. With this
transaction, Levon is acquiring the remaining 49% interest in
Cordero as well as Valley High's cash other than the $1.8 million
to SpinCo.
"This acquisition consolidates ownership of our flagship Cordero
Project and creates a dominant position in the Cordero Porphyry
Belt," says Ron Tremblay, Levon President and CEO. "This is a
strategic combination that will enhance long-term shareholder value
and consolidate ownership of the Cordero Project in Mexico into one
public company. Both shareholder groups will have an unparalleled
opportunity to maximize the growth potential of one of the most
exciting silver/gold/lead/zinc exploration properties in the world.
We will continue to aggressively pursue exploration on the property
and target completing a 43-101 Resource Estimate in Q2 2011 and a
Preliminary Economic Assessment (PEA) by Q3 2011. Our goal is to
create an exciting long term future for all shareholders. The
transaction leaves Levon well funded to complete the 59,000 metre
Phase 3 drill program. We look forward to having the Valley High
shareholders in Levon."
Rob Cameron, CEO of Valley High stated: "This transaction
simplifies the ownership structure of the Cordero
silver/gold/lead/zinc discovery in Mexico. Through the combination
of Levon and Valley High's interests in Cordero, shareholders will
benefit from a unified presence in the marketplace. No longer will
the two companies need to compete for shareholders or project
funding. At the same time, Valley High shareholders will have the
opportunity to participate in SpinCo, an exploration company with
an attractive portfolio of assets located in British Columbia, the
Yukon and Mexico. We believe this unbundling of Cordero and Valley
High's other exploration assets will ultimately create the greatest
value for our shareholders. Valley High will continue to have input
into the exploration and development of Cordero through
representation on Levon's Board of Directors."
TRANSACTION DETAILS
The transaction will be carried out by way of a court-approved
plan of arrangement and will require the approval of at least 2/3
of the votes cast by the shareholders and optionholders voting as a
single class at Valley High's special meeting of shareholders
expected to take place at the end of March 2011. The transaction is
also subject to applicable regulatory approvals, including approval
of the TSX-V, and the satisfaction of certain closing conditions
customary in transactions of this nature.
If the transaction is completed, Valley High shareholders will
receive, for each Valley High share, 1.0 Levon share and 0.125 of a
SpinCo share. Options of Valley High not exercised prior to
completion of the arrangement will be deemed to have been exercised
on a cashless basis for Levon shares, but the holders shall not be
entitled to receive any SpinCo shares. In accordance with their
terms, any outstanding warrants will automatically be adjusted so
that, upon exercise subsequent to completion of the transaction,
for each Valley High share that would previously have been issued,
the warrantholder will receive 1.0 of a Levon share but, instead of
receiving 0.125 of a share of SpinCo, the exercise price of the
warrant will be reduced by the fair value of that SpinCo
consideration as determined by the directors of SpinCo.
Valley High will be entitled to nominate two directors to join
Levon's Board of Directors.
Upon the recommendation of an Independent Special Committee
established to review the transaction and the verbal opinion of
National Bank Financial Inc. that the consideration to be received
by the Valley High shareholders under the terms of the transaction
is fair from a financial point of view, Valley High directors have
determined that the transaction is in the best interest of Valley
High and its shareholders and have unanimously approved the
transaction. The directors intend to recommend, in the information
circular for the shareholder meeting, that Valley High shareholders
vote in favor of the transaction.
After taking into consideration, among other things, the
recommendation of a Special Committee of Levon directors
established to review the transaction and the verbal opinion of
Canaccord Genuity Corp. that the consideration to be offered by
Levon under the transaction is fair, from a financial point of
view, to the Levon shareholders, the Levon directors have
determined that the transaction is in the best interests of Levon
and is fair to Levon shareholders and have unanimously approved the
transaction.
All directors and senior officers of Valley High, as well as
Coro, collectively holding approximately 10.5% of the number of
Valley High shares anticipated to be entitled to vote at the
meeting (assuming the exercise of options and warrants) have
entered into voting agreements with Levon under which they agree to
vote in favour of the transaction. The voting agreements
automatically terminate upon termination of the arrangement
agreement. Subject to Levon's right to match, the board of Valley
High may terminate the arrangement agreement in favour of an
unsolicited superior proposal upon payment of a $4.8 million break
fee to Levon.
ADVISORS
Levon's financial advisor is Canaccord Genuity Corp. and its
legal counsel is Stikeman Elliott LLP. Valley High's financial
advisor is National Bank Financial Inc. and its legal counsel is
Blake, Cassels & Graydon LLP.
A presentation can be downloaded at Levon's website:
http://www.levon.com
ABOUT LEVON
Levon is a junior gold and precious metals exploration company
exploring the Cordero silver, gold, zinc and lead project near
Hidalgo Del Parral, Chihuahua, Mexico. The Norma Sass and Ruf
claims located near the Pipeline gold deposit, which is being mined
and explored by Barrick Gold Corporation in the heart of the Cortez
Gold Trend in Lander County, Nevada, USA. The Company also holds
key land positions at Congress, BRX, and Wayside in the productive
Bralorne Gold camp of British Columbia, Canada.
ABOUT VALLEY HIGH VENTURES LTD.
Valley High is a Canadian based precious and base metal
exploration company with projects located in Mexico, British
Columbia and Yukon. The Cordero project in Mexico (49% interest) is
being evaluated for large bulk mineable silver, gold, zinc and lead
deposits. The Mount Polley project is located in British Columbia
adjacent to Imperial Metals Corporation's ("Imperial") Mt. Polley
copper-gold mine and includes a production royalty on the Boundary
Property, with Imperial. In the Yukon, Valley High has an option to
acquire a 100% interest in the Flume gold property which is located
within the newly recognized White Gold District. Valdez Gold Inc.
has been granted a right to earn up to 75% interest in Valley
High's interest in the Flume property.
For further information log onto our website www.levon.com.
LEVON RESOURCES LTD.
Ron Tremblay, President and CEO
For further information please visit Valley High's website at
www.valleyhighventures.com.
VALLEY HIGH VENTURES LTD.
Geoff Chater, President
This release contains statements that are forward-looking
statements and are subject to various risks and uncertainties
concerning the specific factors disclosed under the heading "Risk
Factors" and elsewhere in the Company's periodic filings with
Canadian securities regulators. Such information contained herein
represents management's best judgment as of the date hereof based
on information currently available. The Company does not assume the
obligation to update any forward-looking statement.
Neither 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 release.
Contacts: Levon Resources Ltd. (604) 682-3701 www.levon.com
Valley High Ventures Ltd. Geoff Chater (604) 614 7830
www.valleyhighventures.com
Levon Resources Ltd. (TSXV:LVN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Levon Resources Ltd. (TSXV:LVN)
Historical Stock Chart
From Sep 2023 to Sep 2024