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Petroleum

Glamis Gold Ltd. Acquires Rayrock Resources Inc.

Strategic Insights

— 1 min read

Glamis Gold Ltd. has announced that it has entered into a definitive agreement to acquire all of the outstanding shares of Rayrock Resources Inc. through a statutory plan of arrangement. The acquisition is subject to several conditions, including formal documentation, regulatory and shareholder approvals, and approval from the Ontario Court of Justice. Rayrock has agreed to support the arrangement, and its shareholders will be entitled to elect to receive either common shares of Glamis or a combination of common shares and cash for each of their Rayrock shares.

Key Takeaways:

  • The Arrangement is subject to a number of conditions, including the finalization of formal documentation, receipt of required regulatory and shareholder approvals, and approval from the Ontario Court of Justice.
  • Glamis has received signed "lock up" letters representing over 34 percent of the subordinate voting shares in favor of the Glamis proposal.
  • The lock up would be released upon receipt of a superior proposal exceeding CDN$8.25 per share (including cash of at least CDN$3.00 per share).
  • Rayrock has agreed to pay a CDN$2 million fee to Glamis if the Arrangement does not complete with Glamis.
  • The Board of Directors of BlackRock Ventures Inc. has agreed to vote in favor of the Arrangement, and BlackRock will acquire Rayrock's entire shareholding in Magin Energy Inc. in lieu of a portion of the Glamis shares.
  • The Magin share exchange transaction between Glamis and BlackRock is subject to all necessary regulatory approvals.
  • Rayrock's assets include interests in the Marigold, Daisy, and Dee operating gold mines in Nevada, a 100 percent interest in the Ivan copper mine and nearby Sierra Valenzuela property in Chile, a significant cash position, realizable investments, and interests in BlackRock and Magin.

Statistics:

  • Over 34% of subordinate voting shares of Rayrock have signed in favor of the Glamis proposal.
  • The lock up would be released upon receipt of a superior proposal exceeding CDN$8.25 per share (including cash of at least CDN$3.00 per share).
  • CDN$2 million fee to Glamis if the Arrangement does not complete with Glamis.
  • CDN$2 million break-up fee to be paid to Viceroy Resource Corporation as a result of terminating the agreement.
  • 2.9 million shares of Glamis to be owned by BlackRock upon conclusion of the Arrangement.

Sources:

  • Business Wire, "Glamis Gold Ltd. Announces Acquisition of Rayrock Resources Inc." (Jan. 25, 1999)
  • Business Wire, "Rayrock Resources Inc. Terminates Agreement with Viceroy Resource Corporation" (Jan. 25, 1999)

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