PMI and Keegan Announce Interim Order for Merger of Equals

Thu Jan 17, 2013 5:30pm EST

* Reuters is not responsible for the content in this press release.


PMI Gold Corporation

January 17, 2013 - 05:30:00 PM

PMI and Keegan Announce Interim Order for Merger of Equals

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 17, 2013) - PMI Gold
Corporation ("PMI") (TSX:PMV)(FRANKFURT:PN3N)(ASX:PVM) and Keegan Resources
Inc. ("Keegan") (TSX:KGN)(NYSE MKT:KGN) are pleased to announce that further
to the previously announced merger of equals (the "Merger") between the two
companies (to be effected by means of a plan of arrangement (the
"Arrangement")), an interim order of the Supreme Court of British Columbia
(the "Interim Order")has been obtained. The Interim Order provides for, among
other things, the calling and the holding of a special meeting of shareholders
of PMI (the "PMI Shareholders") to consider and approve the Arrangement. The
granting of the Interim Order was a condition to the completion of the Merger.

The Shareholder Meetings

A special meeting of the PMI Shareholders is scheduled to be held at CWA
House, 1174 Hay Street, West Perth, Western Australia at 8:30 am (Perth time)
on February 20, 2013 to consider the Arrangement. The record date for the
special meeting was January 16, 2013. 

As well, a special meeting of the Keegan shareholders (the "Keegan
Shareholders") is scheduled to be held at Suite 1500 - Royal Centre, 1055 West
Georgia Street, Vancouver, British Columbia at 4:30 pm (Vancouver time) on
February 19, 2013 to consider certain resolutions required to give effect to
the Arrangement. The record date for the Keegan special meeting was also
January 16, 2013. 

Notices of Special Meetings and a Joint Management Information Circular
relating to both the PMI and Keegan shareholder meetings (the "Joint
Circular") will be mailed to shareholders of both companies shortly. A copy of
the Joint Circular will also be available on PMI's website at and on Keegan's website at It
will also be available under the profile of both companies on SEDAR at as well as at the Australian Securities Exchange ("ASX") website

The Merger

If approved by the PMI Shareholders and the Keegan Shareholders, and subject
to final court approval and the satisfaction or waiver of the conditions to
closing, Keegan will acquire all of the outstanding common shares of PMI. The
combined company will continue under the name "Asanko Gold Inc." ("Asanko"),
reflective of the West Ghana region in which the two companies hold their
principal gold projects. Asanko will be led by Peter Breese, the current
President and CEO of Keegan and Collin Ellison, the current Managing Director
and CEO of PMI. Under terms of the Merger, each PMI Shareholder will receive
0.21 (the "Exchange Ratio") common shares of Asanko for each PMI share
exchanged. In addition, all outstanding options and warrants of PMI that have
not been duly exercised prior to the effective time of the Arrangement (the
"Effective Time") will be exchanged for options and warrants, as the case may
be, of Asanko that will entitle the holders to receive, upon exercise thereof,
Asanko shares based upon the Exchange Ratio and otherwise on the same terms
and conditions as were applicable to such PMI options and warrants immediately
before the Effective Time. As Keegan is the surviving corporate entity,
existing Keegan security holders will not need to exchange their securities in
the Merger. 

Asanko will maintain its TSX and NYSE MKT listings, and has applied to list on
the ASX subject to completion of the Merger. In the United States the issuance
of securities of Asanko under the Merger will be conducted in reliance on the
exemption from registration found under section 3(a)(10) of the Securities Act
of 1933. Asanko will continue to be a foreign private issuer under United
States securities laws.

The Merger will create a combined company with an aggregate market
capitalization expected to be in the $700 million range. Existing Keegan
Shareholders and PMI Shareholders will each own approximately 50% of Asanko,
inclusive of currently in-the-money dilutive securities.

Benefits of the Merger 

There are many anticipated benefits of the proposed combination of PMI and
Keegan. It is anticipated that the formation of Asanko by the merger will
create one of the leading West African gold development companies within which
the expanded technical expertise will unlock the full value of PMI's Obotan
Gold Project and Keegan's Esaase Gold Project in Ghana. 

The key anticipated benefits of the Merger to PMI Shareholders and Keegan
Shareholders is summarized but not limited to the following:

--  Asanko is set to become the leading gold development company in West
    Africa with near term production expected from a unitized project
    comprised of two nearby gold deposits - the Obotan Gold Project and
    Esaase Gold Project; 
--  Asanko will have an enlarged, more diverse resource base; 
--  Asanko will be strongly capitalized with over $340 million in cash on
    hand and no debt outstanding; 
--  The Obotan Gold Project can proceed to construction quickly -
    approximately 200,000 ounces per year with first gold pour expected in
--  The development of the Esaase Gold Project can be funded from cash flow
    - additional 150,000 to 200,000 ounces per year; 
--  Asanko will be run by an experienced mine development and operational
    executive and management team; 
--  Asanko will have an enhanced capital markets presence - Asanko is
    expected to appeal to a broader shareholder base, increase analytical
    following and improve share trading liquidity; and 
--  The Arrangement is expected to be tax neutral or deferred for
    substantially all participants. 

About PMI Gold Corporation 

PMI is an international gold company which is focused on developing a
substantial West African gold business spanning three emerging mining centres
in south-west Ghana, one of the world's most prolific gold producing regions.
PMI has a strong portfolio of assets in Ghana, with a dominant 70km contiguous
landholding in the Asankrangwa Gold Belt with interests in 9 concessions which
comprises the 100% owned Obotan Gold Project and the 100% owned Asanko
Regional Exploration Project. PMI also holds 2 mining leases and 2 concessions
within the Ashanti Gold Belt which comprises the advanced exploration Kubi
Gold Project. The Obotan Gold Project (Measured Resources of 15.57Mt grading
2.47g/t Au for 1.23Moz; Indicated Resources of 29.21Mt grading 2.00g/t Au for
1.88Moz; and Inferred Resources of 21.91Mt grading 1.99g/t Au for 1.40Moz,
based on a 0.5g/t Au cut-off) is scheduled to start gold production in 2014
and expected to produce an average of 221,500 oz Au per year over the first
five years. Mineral Resources is based on a resource estimate audited by Mr
Peter Gleeson, who is a full time employee of SRK Consulting. Mr Gleeson is a
Member of the Australian Institute of Geoscientists (MAIG) with sufficient
experience relevant to the style of mineralization and type of deposit under
consideration and to the activity undertaken to qualify as a Competent Person
as defined in the 2004 Edition of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves' and as defined in
terms of NI43-101 standards for resource estimation of gold. Mr Gleeson has
more than 5 years' experience in the field of Exploration Results and of
resource estimation in general and consents to the inclusion of matters based
on information in the form and context in which it appears.

PMI trades on the TSX, the ASX and the Frankfurt Stock Exchange under the
symbols PMV, PVM and PN3N.F, respectively.

Collin Ellison, Bsc Mining, MIMMM, C.Eng is the Qualified Person within the
definition of that term under NI 43-101, who has assumed responsibility for
the technical disclosure relating to PMI in this release.

The NI 43-101 compliant technical report outlining the Obotan Project Mineral
Resources and Reserve Estimate and the results of the Feasibility Study on
September 17, 2012 was prepared by GR Engineering Services Limited, and
co-authored by P. Gleeson, B.Sc. (Hons), M.Sc, MAIGS, MGSA, J. Price,
FAusIMM(CP), FGS, MIE(Aust.), R Cheyne, BEng. (Mining), FAusIMM, CEng (IEI),
and G. Neeling, BAppSc. (Multidisciplinary) FAusIMM, each of whom is
independent for the purposes of NI 43-101. 

About Keegan Resources Inc. 

Keegan is a gold development company which has been focussing on near term
gold production at its high grade multi-million ounce Esaase gold project in
Ghana. Keegan offers investors the opportunity to share ownership in the rapid
exploration and development of high quality pure gold assets. Keegan is
focused on its wholly owned flagship Esaase gold project (3.83 million ounces
of gold in the Measured and Indicated category with an average grade of 1.73
g/t Au and 1.25 million ounces of gold in the Inferred category with an
average grade of 1.75 g/t Au, based on a 0.8 g/t Au cut-off) located in Ghana,
West Africa; a highly favourable and prospective jurisdiction. Managed by
highly skilled and successful technical and financial professionals, Keegan is
well financed with no debt. Keegan is also strongly committed to the highest
standards for environmental management, social responsibility, and health and
safety for its employees and neighbouring communities. 

Keegan trades on the TSX and the NYSE MKT under the symbol KGN. 

Greg McCunn, P.Eng. of Keegan Resources is the Qualified Person under NI
43-101 who has assumed responsibility for the technical disclosure relating to
Keegan in this release.

Charles J. Muller, B.Sc. Geology (Hons), Pr.Sci.Nat., MGSSA, a Director of
Minxcon Pty Ltd. of Johannesburg, South Africa and an independent Qualified
Person under NI 43-101 is responsible for any disclosure related to Keegan's
Mineral Resources in this release.

Cautionary Note Regarding Forward-Looking Statements and Information:

This PMI and Keegan joint press release contains "forward-looking
information", as such term is defined in applicable Canadian securities
legislation and "forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995. Such statements
concern PMI's and Keegan's future financial or operating performance, the
Merger, and other statements that express management's expectations or
estimates of future developments, circumstances or results. Generally,
forward-looking information can be identified by the use of forward-looking
terminology such as "expects", "believes", "anticipates", "budget",
"scheduled", "estimates", "forecasts", "intends", "plans" and variations of
such words and phrases, or by statements that certain actions, events or
results "may", "will", "could", "would" or "might", "be taken", "occur" or "be
achieved". Such forward-looking information may include, without limitation,
statements regarding the completion and expected benefits of the proposed
Merger and other statements that are not historical facts. Forward-looking
information is based on a number of assumptions and estimates that, while
considered reasonable by management based on the business and markets in which
PMI and Keegan operate, are inherently subject to significant operational,
economic and competitive uncertainties and contingencies. 

Assumptions upon which forward looking statements relating to the Arrangement
have been made include that PMI and Keegan will be able to satisfy the
conditions in the arrangement agreement dated December 5, 2012 between PMI and
Keegan, that ongoing due diligence investigations of each party will not
identify any materially adverse facts or circumstances, that the required
approvals will be obtained from the shareholders of each of PMI and Keegan,
that all required third party, and that regulatory and government approvals
will be obtained. PMI and Keegan caution that forward-looking information
involves known and unknown risks, uncertainties and other factors that may
cause PMI's and Keegan's actual results, performance or achievements to be
materially different from those expressed or implied by such information,
including, but not limited to: gold price volatility; fluctuations in foreign
exchange rates and interest rates; between actual and estimated reserves and
resources or between actual and estimated metallurgical recoveries; costs of
production; capital expenditure requirements; the costs and timing of
construction and development of new deposits and expansion of existing
operations; the success of exploration and permitting activities; parts,
equipment, labor or power shortages or other increases in costs; mining
accidents, labour disputes or other adverse events; and changes in applicable
laws or regulations. In addition, the factors described or referred to in the
section entitled "Risk Factors" in PMI's Annual Information Form for the year
ended June 30, 2012 or under the heading "Business Description - Risk Factors"
in Keegan's Annual Information Form for the financial year ended March 31,
2012, both of which are available on the SEDAR website at,
should be reviewed in conjunction with the information found in this press

Although PMI and Keegan have attempted to identify important factors that
could cause actual results, performance or achievements to differ materially
from those contained in forward-looking information, there can be other
factors that cause results, performance or achievements not to be as
anticipated, estimated or intended. There can be no assurance that such
information will prove to be accurate or that management's expectations or
estimates of future developments, circumstances or results will materialize.
As a result of these risks and uncertainties, the proposed Merger could be
modified, restricted or not completed, and the results or events predicted in
these forward looking statements may differ materially from actual results or
events. Accordingly, readers should not place undue reliance on
forward-looking information. The forward-looking information in this press
release is made as of the date of this press release, and PMI and Keegan
disclaim any intention or obligation to update or revise such information,
except as required by applicable law and neither Keegan not PMI assume any
liability for disclosure relating to the other company herein.

Cautionary Note to US Investors Regarding Mineral Reporting Standards:

PMI and Keegan prepare their disclosure in accordance with the requirements of
securities laws in effect in Canada, which differ from the requirements of US
securities laws. Terms relating to mineral resources in this press release are
defined in accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects under the guidelines set out in the Canadian
Institute of Mining, Metallurgy, and Petroleum Standards on Mineral Resources
and Mineral Reserves. The Securities and Exchange Commission (the "SEC")
permits mining companies, in their filings with the SEC, to disclose only
those mineral deposits that a company can economically and legally extract or
produce. PMI and Keegan use certain terms, such as, "measured mineral
resources", "indicated mineral resources", "inferred mineral resources" and
"probable mineral reserves", that the SEC does not recognize (these terms may
be used in this press release and are included in the public filings of each
of PMI and Keegan which have been filed with securities commissions or similar
authorities in Canada).


Shareholders who have questions regarding the Merger may contact the Proxy
Solicitation Agents below.

Laurel Hill Advisory Group 

Toll free at 1-877-452-7184 (416-304-0211 collect outside Canada and the US)
or by email at

For PMI Holders of ASX-listed CHESS Depositary Interests:

Orient Capital Pty Ltd. 

In Australia at 1-800-250-297 or outside of Australia by telephone at +61 2
8280 7610.

PMI Gold Corporation
Collin Ellison
Managing Director and CEO

Keegan Resources Inc.
Peter Breese
President and CEO
1-604-683-8193 or 1-800-863-8655

Keegan Resources Inc.
John Eren
VP Investor Relations
1-604-683-8193 or 1-800-863-8655

Fig House Communications
Rebecca Greco
1-416-822-6483 or 1-888-682-8089

Read Corporate
Nicholas Read
61-8-9388 1471
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.