New Dawn gets nod to acquire Falgold

HARARE - Toronto Stock Exchange-listed miner New Dawn Mining Corporation was last week given the green light by the High Court to acquire all outstanding minority shares of its Falcon Gold (Falgold) subsidiary in Zimbabwe.

New Dawn conducts operations in the country through various subsidiaries, including Falcon Gold Zimbabwe Limited, a subsidiary in which New Dawn owns and controls approximately 85 percent of the equity.

Falgold had proposed a scheme of arrangement whereby all of the ordinary shares of Falgold, not otherwise owned or controlled by New Dawn, would be acquired by the parent company, either for cash or newly-issued common shares of New Dawn.

In September Falgold shareholders voted unanimously to approve the scheme.

“A hearing was held in the High Court of Zimbabwe on October 3, 2012, to consider sanctioning of the Scheme and as a result, the High Court of Zimbabwe issued an Order sanctioning the Scheme,” reported the miner.

There are approximately 17,5 million Falgold ordinary shares held by Falgold minority shareholders.

Under the scheme, all of those Falgold ordinary shares will be acquired by New Dawn, in exchange for either one New Dawn common share for every five Falgold shares or $0,20 for every one Falgold share.

In the event that a Falgold shareholder does not make an election regarding the form of consideration that they wish to receive, they will be paid in cash for their Falgold shares. Upon conclusion of the Scheme, Falgold will become a wholly-owned subsidiary of New Dawn.

“The Zimbabwe Stock Exchange (ZSE) has, subject to the fulfilment of the conditions precedent, granted approval for the termination of the listing of Falgold shares on the ZSE,” said New Dawn.

“Following the successful conclusion of the scheme and the delisting of the ordinary shares of Falgold and the fulfilment of the conditions precedent, the ZSE has granted approval for the listing of the common shares of New Dawn on the ZSE. New Dawn’s common shares will continue to trade on the Toronto Stock Exchange.”

The junior gold mining company said the scheme is conditional upon, and will not become effective until, the satisfaction of various conditions precedent, including the receipt of necessary regulatory approvals in Canada and Zimbabwe.

The central bank will require that the New Dawn common shares listed on the ZSE be endorsed for trade in Zimbabwe only, save with the consent of the RBZ. New Dawn currently has 43 612 383 common shares issued and outstanding.

“Some of the conditions include the acceptance by the Toronto Stock  Exchange and exchange control approval by the Reserve Bank of Zimbabwe (RBZ)  and approval of the transaction by the board of directors of New Dawn, during which time the shares of Falgold will continue to trade on the ZSE. The satisfaction of all of the conditions precedent could take up to several months,” said New Dawn.

A maximum of approximately 2 900 000 common shares of New Dawn are issuable pursuant to the Scheme.

However, a lesser amount of common shares may be issued, depending on how many Falgold shareholders elect to receive the cash alternative under the Scheme.

The central bank will require that the New Dawn common shares listed on the ZSE be endorsed for trade in Zimbabwe only, save with the consent of the RBZ. New Dawn currently has 43 612 383 common shares issued and outstanding.

New Dawn said management is continuing efforts to arrange suitable funding on acceptable terms for the cash portion that may be paid to the Falgold minority shareholders under the Scheme.

“The company will continue to advise New Dawn shareholders as to the status of this matter as significant developments occur,” said NewDawn. - John Kachembere

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