Intrepid/Emperor Merger Update
Intrepid Mines Limited (TSX: IAU)(TSX: IXN)(ASX: IAU), an international gold and silver production, development and exploration company is pleased to announce that proposed merger partner Emperor Mines Limited (Emperor) has on February 6, 2008 announced the execution of a binding agreement for the sale of its Tolukuma Gold Mine in Papua New Guinea (PNG).
The sale to Petromin PNG Holdings Ltd (Petromin) is for all of the issued share capital of Emperor’s PNG incorporated indirect subsidiary, Tolukuma Gold Mines Limited (TGM), which is the owner of the Tolukuma Gold Mine and other exploration licences in PNG.
Whilst the Company’s Information Circular dated January 24, 2008 highlighted Emperor’s intention to retain ownership of the PNG regional exploration tenements held, including the IPI River property and the Aikora Project, all PNG exploration licences will now be sold together with the Tolukuma Gold Mine with Emperor retaining a pre-emptive first right of refusal over these regional exploration licences for a period of 5 years from completion of the sale.
The material terms of the share sale agreement include:
– All shares in TGM will be transferred to, and all net outstanding debt owing by TGM to the Emperor group (after set-off) will be assigned to, Petromin for a nominal purchase price.
– All assets and liabilities of TGM will remain with TGM.
– The sale is conditional upon, if required, approval of the Minister of Mining PNG being received prior to February 14, 2008 and the sale is scheduled for completion on 21 February 2008.
– Emperor, and its subsidiary DRD (Isle of Man) Limited, has provided various warranties to Petromin in connection with the sale that are customary or usual to a sale transaction of this nature. The agreement provides that any claim by Petromin for breach of warranty must be made, amongst other things, within 12 months of completion. The maximum aggregate claim is limited to A$5 million.
– Following the sale, Petromin shall indemnify Emperor or a related company of Emperor for liability arising from mine remediation or liability arising by virtue of the fact that Emperor or a related company of Emperor is or was related to TGM.
A copy of Emperor’s announcement to ASX regarding the share sale agreement for its Tolukuma Gold Mine is available at www.asx.com.au (ASX Code: EMP).
As set out in the Company’s Information Circular dated January 24, 2008, there are various performance, environmental and social risks associated with the Tolukuma Gold Mine. These risks are significantly reduced by the sale of TGM, but such risks may not be eliminated entirely.
Based on the terms of the share sale agreement with Petromin, TGM is scheduled to be divested prior to implementation of the merger of Intrepid and Emperor, which implementation remains subject to various conditions precedent, including the approval of Intrepid shareholders (meeting on March 3, 2008) and Emperor shareholders (meeting on February 28, 2008), satisfaction or waiver of the condition precedent relating to the ‘Net Cash’ position of Emperor and approval of the merger by the Federal Court (Brisbane Registry).
Emperor has noted that the sale constitutes the last phase of its restructure allowing resources to be focused on its Indonesian opportunities. The sale represents a significant positive step forward towards completion of the proposed merger.
About Intrepid Mines:
Intrepid Mines Limited has an international production, development and exploration profile, and holds interests in several gold-silver and silver-base metal properties in Australia, Argentina, Central America and Canada, either directly or through joint venture partnership. The issued capital is 181,783,419 shares comprised of 166,457,266 ordinary shares of Intrepid Mines Limited quoted on the TSX:IAU and ASX:IAU and 15,326,153 Exchangeable Shares of Intrepid NuStar Exchange Corporation quoted on the TSX:IXN.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This release contains certain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company’s expectations and projections. The TSX & ASX has neither approved nor disapproved the information contained in this press release. Except for statements of historical fact relating to the Corporation, certain information contained herein constitutes “forward-looking statements”. Forward-looking statements are frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other ecological data, fluctuating metal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future and other factors. Circumstances or management’s estimates or opinions could change. The reader is cautioned not to place undue reliance on forward-looking statements.
CUSIP: Q4968A
ABN: 11 060 156 452
Contacts: Intrepid Mines Limited – Toronto, Canada Ann Candelario VP Investor Relations (416) 368-4525 Email: acandelario@intrepidmines.com Intrepid Mines Limited – Perth, Australia Derek Humphry Chief Financial Officer +61 8 9346 0000 Email: perth@intrepidmines.com.au Website: www.intrepidmines.com
SOURCE: Intrepid Mines Limited