EDITOR: | November 1st, 2013

Chalice Gold Mines and Coventry Resources Agree to Revised Deal Structure

| November 01, 2013 | No Comments
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November 1, 2013 (Source: Marketwired) — Coventry Resources Inc. (ASX:CYY)(TSX VENTURE:CYY) (“Coventry”) and Chalice Gold Mines Limited (TSX:CXN)(ASX:CHN) (“Chalice”) advise that Chalice has completed due diligence to its satisfaction, and that the parties have agreed to amend the structure and terms of the proposed merger as announced on 30 September 2013.

Under the revised deal structure (the “Transaction”), which will proceed by a plan of arrangement under the British Columbia Business Corporations Act, Chalice will now issue 46 million shares to acquire a 100% interest in Coventry’s subsidiary companies (“Coventry Subsidiaries”) holding the Cameron Gold Project, the West Cedartree assets, the Rainy River Project and the Ardeen Gold Project (“the Transaction”), with the Chalice shares being distributed directly to Coventry shareholders on a pro rata basis.

The conditions precedent to completing the Transaction include the following:

  • The receipt of all necessary regulatory and other approvals, including those of the Toronto Stock Exchange, the TSX Venture Exchange and the Australian Securities Exchange and as may be required under appropriate mining legislation relevant to the projects of the Coventry Subsidiaries;
  • Shareholders of Coventry approving the Transaction by the affirmative vote of the holders of at least two thirds of eligible security holders present and voting in person or by proxy at a meeting of such security holders;
  • Shareholder approval of Chalice, if necessary;
  • The unanimous recommendation (of the Transaction) of the Coventry Board, in the shareholder meeting documents and at the appropriate shareholders’ meeting of Coventry (subject to any fiduciary duty carve-outs);
  • Court approval of the Transaction as required under the British Columbia Business Corporations Act;
  • Intercompany loan balances between the Coventry Subsidiaries and other entities within the Coventry group being settled or forgiven in the most tax effective manner;
  • Other customary conditions precedent, including the absence of a material adverse change in the business affairs and financial conditions of the Coventry Subsidiaries; and
  • The absence of a material adverse change in the business affairs, financial conditions and the like of Chalice and no prescribed occurrence in relation to Chalice having taken place.

If the conditions relating to regulatory and shareholder approvals are not obtained within 90 days of the date hereof then either Coventry or Chalice shall be at liberty to terminate the Arrangement Agreement (“AA”) by notice in writing to the other party.

The proposed Transaction has the unanimous support of the Board of Directors of both Coventry and Chalice. The Board of Directors of Coventry has advised Chalice that, in the absence of an unfavourable fairness opinion or a superior offer, it will unanimously recommend that its shareholders vote in favour of the proposed Transaction.

A formal AA will be signed in the immediate future. The AA will contain customary non-solicitation and right to match provisions. For further details on the Transaction please refer to the final Term Sheet (http://media3.marketwire.com/docs/908468.pdf).

This modified Transaction is a consequence of the previously disclosed contingent liability associated with a 2007 drilling contract in Paraguay, the subject of planned arbitration proceedings, remaining unresolved. Coventry’s legal advice is there is little merit to the claim and Coventry believes that it is in the best interest of Shareholders to proceed with this arrangement and not deny shareholders the benefits of the planned Transaction with Chalice. Coventry will continue to defend the claim, has adequate resources to do so and will continue to deal with the remaining assets of the Company in the best interests of Shareholders.

Following Completion of the Transaction Coventry will continue as a listed entity. In addition to receiving Chalice Shares, on Completion of the Transaction current Coventry Equity holders will retain identical equity interests in Coventry.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward Looking Statements

This news release may contain “forward-looking statements” and/or “forward-looking information” within the meaning of applicable securities regulations in Canada and the United States (collectively, forward-looking information”). Any forward-looking information contained in this news release is made as of the date of this news release. Except as required under applicable securities legislation, Coventry Resources Inc. (“Coventry”) does not intend, and does not assume any obligation, to update this forward-looking information. Forward-looking information includes, but is not limited to, statements with respect to completion of a Feasibility Study, completion of new resource estimates, construction or operation of a mine, mineral resource estimates, drill plans, planned work programs, future upgrading of mineral resources and expected outcomes. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes”, or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, or “will” be taken, occur or be achieved.

Any forward-looking information contained in this news release is based on certain assumptions that Coventry believes are reasonable, including, with respect to any mineral resource estimates, the key assumptions and parameters on which such estimates are based, that the current price of and demand for gold will be sustained or will improve, that general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed on reasonable terms, that supplies, equipment, personnel, permits and local community approval required to conduct Coventry’s planned exploration and development activities will be available on reasonable terms and that Coventry will not experience any material accident, labour dispute, or failure of equipment.

However, forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Coventry to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include, among others, risks and uncertainties relating to the actual results of exploration activities being different than anticipated, cost of labour increasing more than expected, cost of equipment or materials increasing more than expected, fluctuations in the price of gold and other commodities, currency fluctuations, mineral resources not being as estimated, unexpected variations in mineral resources, grade or recovery rates, risk of accidents, labour disputes and other risks generally associated with mineral exploration and unanticipated delays in obtaining or failing to obtain governmental or community approvals or financing. Although Coventry has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to not be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned not to place undue reliance on forward-looking information due to the inherent uncertainty thereof.


Raj Shah

Editor:

Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>


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