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Scorpio Announces Signing of
Arrangement Agreement with Platte River Gold Inc.
Vancouver, January 13, 2010 – Scorpio Mining
Corporation (TSX: SPM) ("Scorpio" or the "Company")
announces that it has signed an arrangement agreement (the “Arrangement
Agreement”) with Platte River Gold Inc.
(“Platte River”) dated January 7,
2010 for the acquisition of Platte River and all its assets, including the La
Verde Project and its significant polymetallic deposits located near the
Company’s Nuestra Senora mine in Mexico (the “Acquisition”), which will be
completed by way of a court-approved plan of arrangement (the “Arrangement”)
under the Business Corporations Act (Yukon).
The purpose of the Arrangement is to effect
the acquisition by the Company of all of the issued and outstanding common
shares of Platte River (the “Platte River Shares”) from the holders thereof
(the “Platte River Shareholders”) in exchange for the issuance by the Company
to the Platte River Shareholders of common shares of the Company (“Company
Shares”). If the Acquisition is approved at the Company’s special meeting (the
“Company Meeting”) of shareholders to be held on February 5, 2010 and all
other conditions precedent under the Arrangement Agreement are satisfied or
waived, on the effective date of the Arrangement (the “Effective Date”), the
following transactions will be deemed to occur:
· each outstanding Platte River
Share, other than Platte River Shares held by Platte River Shareholders
exercising dissent rights under applicable corporate laws (“Dissenting
Shareholders”), will be deemed exchanged by the holder thereof for Company
Shares based on a share exchange ratio (the “Share Exchange Ratio”) which will
result in Platte River Shareholders holding 40% of all outstanding Company
Shares upon the completion of the Arrangement (expected to be approximately
3.53 Company Shares for each Platte River Share held); and
· each Platte River Share held by
a Dissenting Shareholder will be deemed to have been transferred to Platte
River and cancelled, and such Dissenting Shareholder will be entitled to be
paid the fair value of its Platte River Share.
Following the completion of the Acquisition,
outstanding Platte River incentive stock options and share purchase warrants
will become, by their own terms, exercisable by the holders thereof to acquire
Company Shares, with the number of Company Shares to be acquired and the
exercise price per Company Share adjusted in accordance with the Share Exchange
Ratio.
Full particulars of the Acquisition are contained in the Plan of
Arrangement attached to the Arrangement Agreement.
A copy of the Arrangement
Agreement has been filed on SEDAR at www.sedar.com under the Company’s profile.
Assuming there are no Dissenting Shareholders
and no convertible securities of the Platte River or the Company are exercised
during the period between January 7, 2010 and the Effective Date, on the
completion of the Acquisition, 74,832,046 Company Shares will be issued to
Platte River Shareholders pursuant to the Arrangement. As a result there would
be 187,080,115 Company Shares outstanding on the Effective Date with Platte
River Shareholders holding 40% of the total number of issued and outstanding
Company Shares. It is anticipated that a further 9,960,398 Company Shares will
become issuable upon the exercise of outstanding Platte River convertible
securities.
A special meeting of the Platte River
Shareholders (the “Platte River Meeting”) will be held on or about February 23,
2010 in order to approve the Arrangement. Certain shareholders of Platte
River, holding an aggregate of 18,234,535 Platte River Shares, representing
86.06% of the outstanding Platte River Shares, have entered into support
agreements with the Company, pursuant to which such Platte River Shareholders
have agreed to take certain actions in support of the Acquisition, including
attending the Platte River Meeting in person or by proxy and voting in favour
of the Arrangement.
Pursuant to the Arrangement Agreement, the
completion of the Arrangement is subject to the fulfilment or waiver of several
conditions precedent, including, but not limited to the approval of the
Acquisition by the Company’s shareholders at the Company Meeting, the approval
of the Arrangement by the Platte River Shareholders at the Platte Meeting,
receipt of necessary court approvals, the final approval of the TSX Venture
Exchange, and Dissenting Shareholders not exercising applicable dissent rights
in respect of more than 5% of all Platte River Shares. Provided all condition
precedents set out in the Arrangement Agreement are fulfilled or waived, the
Effective Date of the Acquisition is expected to occur on or about February 25,
2010 or such earlier or later date as the Company and Platte River may agree.
Immediately following the Effective Date, Platte River will become a wholly‑owned
subsidiary of the Company.
The Company also announces that it has mailed
its proxy materials prepared in connection with the Company Meeting.
The proxy
materials have been filed on SEDAR at www.sedar.com under the Company’s
profile.
Further information is available on the
Company’s web site at: www.scorpiomining.com.
ON BEHALF OF SCORPIO MINING CORPORATION
Peter J.
Hawley
Chairman & CEO
This news release includes certain
statements that may be deemed “forward-looking statements” within the meaning
of the United States Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities legislation.
Forward-looking statements include,
but are not limited to, statements with respect to completing and optimizing
the Platte Rive acquisition.
Generally, these forward-looking statements can be
identified by the forward-looking terminology such as “plans”, “expects” or
“does not expect”, “is expected”, “budget”, “scheduled”, “estimates”,
“projects”, “intends”, “anticipates”, or “does not anticipate”, or “believes”,
or “variations of such words and phrases or state that certain actions, events
or results “may”, “can”, “could”, “would”, “might”, or “will” be taken”,
“occur” or “be achieved”.
Forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause the actual
results, level of activity, performance or achievements of Scorpio Mining
Corporation to be materially different from those expressed or implied by such
forward-looking statements, including but not limited to: risks related to the
exploration and development and operation of the mineral projects, risks
related to international operations, construction delays and cost overruns, the
actual results of current exploration, development and construction activities,
conclusions of economic evaluations, changes in project parameters as plans
continue to be refined, future prices of silver, zinc, copper, lead and gold,
as well as those factors discussed in the sections relating to risk factors of
our business filed in Scorpio Mining Corporation’s required securities filings
on SEDAR, including its Annual Information Form dated March 27, 2009.
Although
Scorpio Mining Corporation has attempted to identify important factors that
could cause results to differ materially from those contained in
forward-looking statements, there may be other factors that cause results to be
materially different from those anticipated, described, estimated, assessed or
intended.
There can be no assurance that any
forward-looking statements will prove accurate, as actual results and future
events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements.
Scorpio Mining Corporation does not undertake to update any
forward-looking statements that are incorporated by reference herein, except in
accordance with applicable securities laws.
For further information: Rich Kaiser, YES International:
1-800-631-8127, 001-757-306-6090 (outside North America), Email:
WWW.SCORPIOMINING.COM
If you
have received this email in error or would like to be removed from this news
distribution list on SPM, send ‘REMOVE-SPM’ to or call
757-306-6090.
TSX.SPM
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