Netherlands-based Nordgold agrees to pay more to buy out Northquest
Last updated 6/5/2016 at Noon
Northquest Ltd. May 26 said it has agreed to accept an increased offer by Nordgold to buy all of the Northquest shares the Netherlands-based gold producer does not already own.
In April, Nordgold, which already owns more than half of Northquest's outstanding shares, offered to buy all of the remaining shares at C25.3 cents each.
Northquest countered with an offer of C26 cents per share, which has been accepted by Nordgold.
The Northquest board of directors has recommended that shareholders accept the increased offer and tender their shares.
Concurrent with entering into a support agreement, each of the directors and officers of Northquest entered into lock-up agreements with Nordgold to tender all common shares beneficially owned by them, or over which they exercise control.
Additionally, Northquest has agreed to accelerate the expiry date of all options to acquire common shares such that all options shall have been exercised or shall have terminated by the expiry time of the offer.
Northquest also has agreed to attempt to convince the holders of outstanding in-the-money warrants to exercise such warrants in accordance with their terms.
Jon North has resigned as a director of Northquest but will continue to act as president and CEO of the company.
Upon receipt of TSX Venture Exchange approval, Northquest will obtain the resignations of two of the four remaining directors and shall appoint Nordgold's nominees as directors of the company.
The first business day following the expiry date of the offering (June 15), Northquest will offer the resignations of North as CEO and any directors Nordgold may request.
Nordgold is a Netherlands-based gold producer with operations in Russia, Kazakhstan and western Africa.
Northquest's primary asset is the Pistol Bay gold property in Nunavut, an extensive land package blankets a 90-kilometer (55 miles) west-trending series of surface gold occurrences and zones.
Based on 69 holes drilled, the Vickers zone at Pistol Bay hosts 7.79 million metric tons of inferred resource averaging 2.95 g/t (739,000 ounces) gold, according to a maiden resource published in April.
In addition to the initial resource, the technical report also describes in 16 other gold occurrences on the Pistol Bay property for which there has been a minor amount of drilling.