VANCOUVER, April 1, 2016 /PRNewswire/ — Tahoe Resources Inc. (“Tahoe”) (TSX: THO, NYSE: TAHO) and Lake Shore Gold Corp. (“Lake Shore Gold”) (TSX, NYSE MKT: LSG) are pleased to announce that the business combination between Tahoe and Lake Shore Gold by way of a plan of arrangement (the “Arrangement”) has been concluded with effect April 1, 2016.
Pursuant to the Arrangement, Tahoe acquired all of the issued and outstanding common shares of Lake Shore Gold (“Lake Shore Gold Shares”) for consideration consisting of 0.1467 common shares of Tahoe (“Tahoe Shares”) for each outstanding Lake Shore Gold share (the “Exchange Ratio”), so that Lake Shore Gold is now a wholly owned subsidiary of Tahoe. Upon closing of the Arrangement, Tahoe issued a total of 69,239,629 Tahoe Shares to former Lake Shore Gold Shareholders, who now own approximately 23.32% of the 296,900,457 issued and outstanding Tahoe Shares, on an unpaid basis. diluted.
In addition, outstanding options to acquire Lake Shore Gold shares have been exchanged for Tahoe options and will entitle the holders to receive Tahoe shares upon exercise based on the exchange ratio.
Lake Shore Gold shares are expected to be delisted from the Toronto Stock Exchange and NYSE MKT as soon as possible. The exceptional $103,181,000 Lake Shore Gold’s 6.25% convertible unsecured debentures (“Debentures”) will continue to trade on the Toronto Stock Exchange under the symbol “LSG.DB”.
Lake Shore Gold Convertible Debenture Deed dated September 7, 2012 (the “Indenture”) governs the terms of the Debentures. Following the Arrangement and pursuant to the terms of the Indenture, upon conversion of the Debentures, each Debentureholder will be entitled to receive Tahoe Shares (in lieu of Lake Shore Gold Shares), the exchange ratio. Tahoe and Lake Share Gold have entered into a Supplemental Indenture with Computershare Trust Company of Canadaas trustee, to, among other things, evidence Tahoe’s agreement to issue Tahoe shares to any Debenture holder upon conversion of the Debentures.
Completion of the Arrangement constitutes a Change of Control under the Indenture. Pursuant to its obligations under the Indenture, Lake Shore Gold has today given notice of its offer to purchase all Debentures at 100% of the principal amount plus accrued and unpaid interest, subject to the conditions set out in the Indenture (the “Change of Control Offer”). Pursuant to the terms of the Indenture, the Change of Control Offer will expire on 5:00 p.m. (Toronto It’s time April 18, 2016and Debentureholders who accept the Change of Control Offer will be paid on May 13, 2016.
In addition, since the current market price of Lake Shore Gold shares is greater than 130% of the conversion price (as determined pursuant to the Indenture), Lake Shore Gold has today given notice of its election to redeem the debentures on May 16, 2016 (the “Redemption Date”) at a price equal to their principal amount plus accrued and unpaid interest up to, but not including, the Redemption Date. Pursuant to the Indenture, Lake Shore Gold has elected to discharge its obligation to repay the principal amount of the Debentures by issuing shares of Tahoe to the holders of the Debentures. The number of Tahoe shares to be issued will be determined by dividing the aggregate principal amount of the outstanding debentures to be redeemed by 95% of the volume-weighted average trading price of Tahoe shares for the 20 trading days ending on and including May 9, 2016. Accrued and unpaid interest on the Debentures will be paid in cash.
Debentureholders retain the right to convert the Debentures at any time prior to 5:00 p.m. (Toronto It’s time May 13, 2016 at a conversion price of $9.5433 by Share Tahoei.e. a conversion rate of 104.7856 Tahoe shares per $1,000 principal of the debentures. If all of the outstanding Debentures are converted by Debentureholders at such conversion price, an aggregate of approximately 10,811,895 Tahoe Shares will be issued upon conversion.
For full details of the terms and conditions of the Change of Control Offer and Debenture Redemption, Debentureholders should refer to the Notice of Change of Control and Redemption mailed to them, a copy of which is available under Lake Shore Gold’s SEDAR profile. at www.sedar.com.
Contacts for more information:
Tahoe Resources Inc.
About Tahoe Resources Inc.
Tahoe’s strategy is to responsibly mine precious metals in the Americas and deliver long-term shareholder value through share price appreciation, shareholder dividends and earnings growth. . Tahoe is a member of the S&P/TSX Composite and TSX Global Mining indices and the Russell 3000 on the NYSE. Tahoe is listed on the TSX as THO and on the NYSE as TAHO.
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SOURCE Tahoe Resources Inc.