Subject to further adjustments at closing, XDM shareholders will receive approximately 0.175 Roxgold common shares for every one common share of XDM (the "Exchange Ratio") which represents a deemed issue price of approximately $0.55 per Roxgold share. Roxgold expects to receive net proceeds totaling approximately $7.5 million after transaction and severance costs.
Based upon the current Exchange Ratio, the Company anticipates issuing approximately 14 million common shares as consideration for the Acquisition, and reserving approximately an additional 1,850,000 common shares for issuance upon exercise of the existing convertible securities of XDM. Roxgold holds lock-up and share voting support agreements from XDM’s shareholders totalling approximately 43.2% of XDM’s outstanding common shares.
Mr. Oliver Lennox-King serves as the Chairman of both Roxgold and XDM. Accordingly, each of Roxgold and XDM formed a special committee comprised entirely of independent directors to consider and approve the terms of the Acquisition. Raymond James Ltd. was retained by Roxgold to evaluate the transaction and rendered a positive fairness opinion on the Acquisition, from a financial point of view. Haywood Securities Inc. was retained by XDM to evaluate the transaction and rendered a positive fairness opinion on the Acquisition.
"We are very pleased to announce this latest milestone in Roxgold’s development," said John Dorward , President and Chief Executive Officer. "This transaction will provide Roxgold with additional capital to advance its strategic development goals, including early stage site works at Yaramoko upon reaching a construction decision based on the completion of the Feasibility Study and obtaining relevant permits in the first half of next year."
The proposed Acquisition remains subject to, among other things, the receipt of applicable shareholder and regulatory approvals, including the approval of the TSX Venture Exchange.
"This transaction represents an attractive value proposition for both companies and an efficient mechanism to deliver the value of XDM’s net working capital to shareholders," commented Kevin Feeney , Chief Financial Officer and Company Secretary for XDM.
