VANCOUVER,
May 27, 2011 /PRNewswire/ - Radius
Gold Inc. (TSX-V: RDU) is pleased to announce that the Board of
Directors of the Company has unanimously approved a spin out
transaction (the "Spin Out") whereby Radius will transfer all of
its Yukon and Alaskan property
assets and $1.0 million in cash to a
new company ("Newco") in return for Newco shares and warrants, the
majority of which will then be distributed to Radius shareholders
by way of a plan of arrangement. The implementation of the
Spin Out is subject to, among other things, Radius shareholder
approval, court approval and TSX Venture Exchange ("Exchange")
approval, including Exchange approval of the listing of the common
shares of Newco on the Exchange.
The objective of the Spin Out is to maximize
shareholder value by allowing the market to independently value
geographically separate property portfolios. The Spin Out will
result in two strategically positioned companies, one focused on
Latin America and the other
focused on the Yukon.
Asset Split
Radius will retain ownership of all Latin American
property and royalty interests, including the HB Project and
geothermal licences in Guatemala,
and its Nicaraguan portfolio currently under option to B2Gold
Corp., plus shares owned in other companies acquired in relation to
the Latin American properties. Newco will hold all of the
staked and optioned properties of Radius located in the
Yukon and Alaska, including the Sixty Mile district and
Rackla Belt properties, and shares owned in other companies
acquired pursuant to existing Yukon option agreements.
Spin Out Terms
The Spin Out will result in Radius shareholders
receiving Newco common shares and warrants based on the number of
Radius shares held. Radius will retain an approximately 19.9%
ownership interest in Newco. An application will be made to
have the Newco warrants listed on the Exchange and listing will be
subject to meeting the Exchange listing requirements.
Radius shareholder approval will be sought at a
shareholders' meeting expected to be held in the fall of 2011. An
Information Circular containing full details of the Spin Out will
be sent to Radius shareholders prior to the meeting.
Simon Ridgway, the
Chief Executive Officer of Radius, stated: "The management
and Board of Directors of Radius believe that the proposed
separation of assets should facilitate independent financing and
exploration strategies, resulting in an excellent opportunity for
shareholders to maximize the value of their Radius holdings."
About Radius
Radius has been exploring for gold in Latin America for nearly a decade, and has
assembled interests in a portfolio of promising gold projects
throughout the region, including carried stakes in two small-scale
developing gold projects in Guatemala and Nicaragua. Radius also has
a number of 100% owned exploration plays, including the HB property
in Guatemala and several
properties in the Rackla Belt and Sixty Mile placer gold district
in the Yukon.
ON BEHALF OF THE BOARD
"Simon Ridgway"
Simon Ridgway, President &
CEO
Investor relations: Ralph Rushton / Erin
Ostrom
Symbol: TSXV-RDU; OTCBB-RDUFF
Shares Issued: 79.9-million
Forward-Looking
Statement
Information set forth in this news release may
involve forward-looking statements under applicable securities
laws. Forward-looking statements are statements that relate to
future, not past, events. In this context, forward-looking
statements often address expected future business and financial
performance, and often contain words such as "anticipate",
"believe", "plan", "estimate", "expect", and "intend", statements
that an action or event "may", "might", "could", "should", or
"will" be taken or occur, or other similar expressions. All
statements, other than statements of historical fact, included
herein including, without limitation, statements about the expected
benefits of the proposed Spin Out, the completion of the Spin Out,
the receipt of shareholder and regulatory approvals for the Spin
Out and statements regarding Newco, are forward looking statements.
By their nature, forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause our
actual results, performance or achievements, or other future
events, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Such factors and risks include, among
others, the receipt of the necessary shareholder and regulatory
approvals for the Spin Out, risks associated with mineral
exploration, fluctuations in commodity price, economic conditions
and title matters. Forward-looking statements are made based on
management's beliefs, estimates and opinions on the date that
statements are made and the Company undertakes no obligation to
update forward-looking statements if these beliefs, estimates and
opinions or other circumstances should change, except as required
by applicable securities laws. Investors are cautioned against
attributing undue certainty to forward-looking statements.
Neither the TSX Venture Exchange nor the
Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy
or accuracy of this release.
SOURCE Radius Gold Inc.
