Forsys Update on Plan of Arrangement
1:06 PM ET, March 13, 2009
TORONTO, ONTARIO, Mar 13, 2009 (MARKET WIRE via COMTEX) -- Forsys (FSY)(FRANKFURT: F2T)(NSX: FSY) announces that it has agreed in principle with a written proposal from George Forrest International Afrique S.P.R.L. ("GFI") to extend the closing date of the proposed plan of arrangement involving Forsys and GFI to a date still to be determined but not later than July 31, 2009.
Under the terms of the in principle agreement, the purchase price remains at CAD$7.00 per Forsys common share and all of Forsys' outstanding "in-the-money" options and warrants, but the reverse break fee for which GFI would be liable in the event that it breaches the arrangement agreement would increase from CAD$11,412,000 to CAD$20,000,000. By March 31, 2009 GFI would also have to provide security for the entire amount of such fee in the form of a cash escrow deposit or letter of credit or other form agreed by Forsys.
Although Forsys does not foresee needing additional working capital prior to July 31, 2009 given its current cash position and budget forecasts, the CAD$20 million break fee security deposit would also be available for general operating or capital expenditures by Forsys subject to GFI's prior written approval. Forsys will also have an opportunity to terminate the arrangement agreement and collect the existing reverse break fee of CAD$11,412,000 if GFI is not able to demonstrate by March 31, 2009 that it will be able to complete the plan of arrangement by the extended date.
In its proposal, GFI said it remained committed to the transaction but in the current economic climate needed the additional time to complete the financing including the future investments from its preferred source of financiers. During the period prior to closing, GFI will have input into Forsys' operations at the Valencia mine.
Duane Parnham, Forsys' President and CEO said "It was always Forsys' full expectation that we would conclude this transaction by March 18, 2009 having obtained all shareholder and regulatory approvals, however, the relationship that has developed between GFI and Forsys during the bid process should be of benefit to Forsys in the short term. Development of Valencia will continue as planned whilst the GFI offer remains current. Valencia, a permitted uranium mine in Namibia continues to display robust and improved economics from increased resources and grade. Capital cost estimates are being lowered due to lower input costs across the board together with optimization improvements from the engineering team. We will continue with the development of Valencia for the benefit of all stakeholders utilizing our existing resources in cooperation with GFI."
The agreement in principle is subject to the satisfactory completion of legally binding documentation, court approval and any other necessary approvals. Further announcements will be made as developments warrant and discussions progress.
On Behalf of the Board of Directors of Forsys Metals Corp
Duane Parnham, President and CEO
For further information visit our website at www.forsysmetals.com.
Sedar Profile #00008536
Shares Outstanding: 78,935,231
Forward-Looking Information
This news release contains projections and forward looking information that involve various risks and uncertainties regarding future events. Such forward looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of the Corporation. These risks and uncertainties could cause actual results and the Corporation's plans and objectives to differ materially from those expressed in the forward looking information. Actual results and future events could differ materially from anticipated in such information. These and all subsequent written and oral forward looking information are based on estimates and opinions of management on the dates they are made and expressed qualified in their entirety by this notice. The Corporation assumes no obligation to update forward looking information should circumstances or management's estimates or opinions change.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Contacts:
Forsys Metals Corp.
Duane Parnham
President and CEO
(905) 844-4646
Email: info@forsysmetals.com
In Namibia
Forsys Metals Corp.
+264 61 219 462
Email: vul@forsysmetals.com
Website: www.forsysmetals.com |
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