14th May 2007 07:02
Kazakhmys PLC14 May 2007 14 May 2007 Kazakhmys PLC announces offer to acquire Eurasia Gold Inc. Kazakhmys PLC ("Kazakhmys") (LSE: KAZ) today announces its take-over bid offer(the "Offer") to acquire all of the outstanding ordinary shares of Eurasia GoldInc. ("Eurasia Gold") (TSX: EGX) at a price of C$0.85 in cash per Eurasia Goldshare. The Offer values Eurasia Gold at approximately C$288 million, equivalentto approximately US$260 million based on the closing CAD/USD exchange rate as at11 May 2007. Based on the TSX closing price of C$0.76 for a common share ofEurasia Gold as at 11 May 2007, the proposed Offer price represents a premium of12%. Kazakhmys intends to formally commence the Offer on or about 15 May 2007. TheOffer will be fully financed from Kazakhmys' existing cash balances. Mr Kumar Mukashev, Chairman of Eurasia Gold, TKA Corporation and certain othershareholders controlled by Mr Kumar Mukashev which, in aggregate, hold orcontrol approximately 79% of the common shares of Eurasia Gold, have enteredinto lock-up agreements with Kazakhmys pursuant to which they have agreed totender all of their shares in Eurasia Gold to the Offer. Eurasia Gold has estimated resources of approximately 1.9 Moz of gold and goldequivalent (Measured & Indicated by JORC and C1 Former Soviet Union standard).Approximately half of these resources are located in Kazakhstan, with theremaining resources located in Kyrgyzstan. In addition, there is a high-gradesilver deposit in Tajikistan. Eurasia Gold offers a well-balanced portfolio of commercial mining, newdevelopment and exploration opportunities, as well as a proven track record ofbringing development assets into production. Eurasia Gold will put newdevelopment assets into construction in 2007/2008, with first productionexpected in 2009/2010. According to its public disclosure record, Eurasia Goldsold 44,989 oz of gold in 2006. The proposed acquisition is the latest step in Kazakhmys' strategy of building adiversified natural resources company in Kazakhstan and neighbouring countries.Kazakhmys continues to evaluate a wide range of opportunities to pursue thisstrategy. The transaction is expected to generate synergies by combining thecompanies' operations in the region. Vladimir Kim, Kazakhmys' Executive Chairman said: "This acquisition is an exciting step in delivering on our diversificationstrategy. As well as offering excellent growth potential in its own right,Eurasia Gold will also act as a stepping stone for Kazakhmys in neighbouringcountries where there is potential for further expansion." Oleg Novachuk, Kazakhmys' Chief Executive said: "We believe the gold industry has a number of attractive characteristics andoffers the potential to deliver substantial returns to our shareholders. Inparticular, the gold industry in Kazakhstan and the neighbouring states is inthe early stages of a major expansion both in exploration and extraction. Thispresents an outstanding opportunity for a company with Kazakhmys' skills andexpertise. The acquisition of Eurasia Gold creates a strong platform for futuredevelopment and we will continue to pursue other opportunities in the sectorwhere we believe the prospects and returns on investment are appropriate." Full details of the Offer will be included in the formal offer and take-over bidcircular to be filed with the regulatory authorities and mailed to Eurasia Goldshareholders in accordance with applicable securities laws. The Offer willremain open for 35 days following the mailing date and will be subject tocertain specified conditions, including among other things: (a) at least 75 percent of the Eurasia Gold shares, on a fully-diluted basis, being validlydeposited and not withdrawn; (b) receipt of all necessary regulatory approvals;and (c) no material adverse change having occurred in the business of EurasiaGold. Subject to applicable laws, Kazakhmys reserves the right to withdraw theOffer and not to take up and pay for any Eurasia Gold shares deposited undersuch Offer unless each of the conditions of the Offer is satisfied or waived byKazakhmys prior to the expiry of the Offer. For further information please contact: Jinsoo Yang, Head of Investor RelationsSergei Stephantsov, Deputy Head of Investor RelationsKazakhmys PLC Tel:+44 20 7901 7800 Robin WalkerFinsbury Tel:+44 20 7251 3801 - ends - Notes to Editors About Kazakhmys Kazakhmys is a London listed natural resources company with primary operationsin Kazakhstan and Germany. Kazakhmys' operations are vertically integrated andits principal business is the mining, processing, smelting, refining and sale ofcopper and copper products as well as various by-products such as zinc, gold andsilver. Kazakhmys operates 19 open pit and underground mines and two smeltingand refining complexes in Kazakhstan and a copper products fabrication companyin Germany. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
KAZ.L