Penmont Proposes to Acquire C

RNS Number : 6158E

Fresnillo PLC

23 December 2009

 



December 23, 2009  

Penmont Proposes to Acquire Canplats Resources Corporation for C$4.40 per Share

London, Mexico City; December 23, 2009 - Fresnillo plc announces that Minera Penmont S. de R. L. de C.V., its 56% owned joint venture with Newmont Mining Corporation (44%), has submitted a binding proposal to Canplats Resources Corporation for the acquisition of all of the common shares of Canplats for C$4.40 per share.

Under the terms of the proposal Canplats shareholders would receive, for each Canplats share, C$4.20 in cash and a share in a new exploration company with a notional value of C$0.20. 

The proposal by Minera Penmont follows the announcement in November that Canplats had entered into an agreement with Goldcorp Inc. (the "Goldcorp Agreement") for the acquisition by Goldcorp of all of the Canplats common shares.

Canplats has disclosed that its Board of Directors has determined, after receiving a recommendation to such effect from its Special Committee and the advice of the financial and legal advisors to the Company, that the proposed agreement with Penmont is a "superior proposal" for the purposes of the Goldcorp Agreement and has provided notice of such determination to Goldcorp.

The consideration that would be received by Canplats shareholders were the Minera Penmont proposal to be implemented by Canplats represents a premium of 84% to the 20-day volume weighted average trading price of the Canplats common shares on the TSX Venture Exchange prior to the announcement by Canplats that it had entered into the Goldcorp Agreement and a premium of 38% to the implied value of the proposed Goldcorp transaction based on the closing price of the common shares of Goldcorp on the Toronto Stock Exchange on December 22, 2009.

Canplats' main focus is the development of Camino Rojo, a new gold and polymetallic discovery in Zacatecas state, Mexico. The 339,000 hectare (1,309 square mile) project is wholly-owned by Canplats. The Represa deposit at Camino Rojo hosts 3.44 million ounces gold and 60.7 million ounces silver in measured and indicated resources with additional inferred resources of 0.55 million ounces gold and 7.6 million ounces silver and remains open along strike and to depth. A positive preliminary assessment has been returned for Camino Rojo and a prefeasibility study is currently underway.

The new exploration company, all of the shares of which would be distributed to Canplats shareholders, would hold interests in certain early-stage exploration properties located in Durango and Chihuahua states, Mexico and C$10 million to fund its activities.

The proposed agreement with Canplats includes a break fee, payable to Penmont in certain circumstances, of C$9.3 million.

Under the terms of the Goldcorp agreement, Goldcorp has a period of five business days expiring on Thursday, December 31, 2009 (the "Response Period") to offer to amend the terms of that agreement.

If, within the Response Period, Goldcorp offers to amend the Goldcorp Agreement such that the Canplats Board determines that the proposed agreement with Penmont is no longer a superior proposal, Canplats will be required to enter into an amendment to the Goldcorp Agreement and implement the amended agreement. In that circumstance, no agreement will be entered into between Canplats and Penmont with respect to the transaction proposed by Penmont.

Canplats has disclosed that if, within the Response Period, Goldcorp does not offer to amend the Goldcorp Agreement, or if the proposed Penmont transaction continues to be superior to an amended transaction proposed by Goldcorp, Canplats intends to pay Goldcorp the agreed termination payment of C$7.2 million, terminate the Goldcorp Agreement, and enter into an agreement with Penmont to complete a transaction on the terms proposed by it. In that event, the directors and officers of Canplats will enter into lock-up agreements with respect to the transaction with Penmont on substantially the same terms as the agreements entered into with Goldcorp and pursuant to which, among other things, they will agree to vote their Canplats common shares, options and warrants in favour of the Penmont transaction at a meeting of shareholders of Canplats to be called to consider such transaction. 

Penmont's financial advisor is Scotia Capital and its legal advisors are Goodmans LLP in Canada and Wachtell, Lipton, Rosen & Katz in the United States.

For further information, contact:

Fresnillo plc
London Office Tel: [phone]
Octavio Alvidrez, Head of Investor Relations

Mexico City Office
Gabriela Mayor Tel: [phone]

Brunswick Tel: [phone]
Carole Cable
David Litterick

About Fresnillo plc 

Fresnillo Plc is the world's largest primary silver producer and Mexico's second largest gold producer, listed on the London Stock Exchange under the symbol FRES. 

Fresnillo has three producing mines, all of them in Mexico - Fresnillo, Ciénega and Herradura; two development projects - Saucito, Soledad & Dipolos; and three exploration prospects - San Juan, San Julian, Orysivo, as well as a number of other long term exploration prospects and, in total, has mining concessions covering approximately 1.75 million hectares in Mexico. 

Fresnillo has a strong and long tradition of mining, a proven track record of mining development and reserves replacement, and a low cost of production, being in the lowest quartile of the cost curve for both silver and gold. 

Fresnillo intends to maintain its position as the world's largest primary silver producer with the aim of approximately doubling production, on a silver equivalent ounce basis by 2018 and increasing its gold production.

---

 

END

 

 

MSCEAXADASANFEE