26th Jan 2007 07:32
Galahad Gold Plc26 January 2007 26 January 2007 Galahad Gold plc (Galahad) Sale of half of Galahad's Northern Dynasty shareholding for C$94m On 30 November 2006, Galahad indicated its intention to evaluate optionsrelating to its 20.7% shareholding in Northern Dynasty Minerals Ltd (NDM). As a result of this initiative, today Galahad entered into an agreement to sella 10.3% stake in NDM to QIT-Fer Et Titane Inc, an affiliate of Rio Tinto plc,for C$94 m (£40.3 m) payable in cash on completion, which is expected to takeplace on 1 February 2007. The purchase price is equivalent to C$10 per share,which represents a premium of 5.5% to the NDM closing price as of 24 January2006. In addition, Rio Tinto has agreed in certain circumstances to pay incrementalconsideration to Galahad. If prior to 31 December 2008, Rio Tinto resells theshares purchased from Galahad in acceptance of an offer to acquire alloutstanding shares of NDM, it will pay Galahad half of the realised profit. Ifprior to 31 December 2008, Rio Tinto purchases additional shares at a pricegreater than C$10 per share from a third party other than NDM, Rio Tinto willpay to Galahad an amount equal to the price per share paid in such purchaseminus C$10 (to a maximum of C$2 per share) multiplied by the lesser of thenumber of shares so purchased from the third party or 9,400,000 shares (up to acumulative aggregate of C$18.8 m for all such purchases). Following this sale, Galahad will continue to explore options to realise valuefrom its remaining 10.4% stake in NDM and investigate optimal ways of returningthe net sales proceeds to shareholders. Galahad will also be using the proceedsof the disposal to repay part or all of a C$20 million debenture issued inSeptember 2006. NM Rothschild & Sons Limited acted as financial advisor to Galahad. Enquiries to: GALAHAD GOLD plcIan Watson Tel: +44 (0)20 7408 2002 PARKGREEN COMMUNICATIONSCathy Malins/Annabel Leather Tel: +44 (0)20 7581 7480 DRESDNER KLEINWORTChris Treneman Tel: +44 (0)20 7623 8000 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Rio Tinto