accumulating AAM Atacama Minerals
Mr. Lukas Lundin reports
ATACAMA APPOINTS NEW MANAGEMENT TEAM AND AGREES TO ACQUIRE SIROCCO GOLD
Atacama Minerals Corp. has appointed a new senior management team.
Richard Clark has been appointed chief executive officer of Atacama. Joining Mr. Clark on the senior management team will be Simon Jackson (president), Alessandro Bitelli (chief financial officer), Kevin Ross (chief operating officer) and Hugh Stuart (vice-president — exploration).
The new senior management team managed Red Back Mining Inc., a West African gold producer, until it was taken over by Kinross Gold Corporation in September, 2010, at a value in excess of $8-billion.
The chairman of the board, Lukas Lundin, commented: “We are very fortunate that Rick and his team have joined Atacama. Their significant experience and proven track record will ensure that the Aguas Blancas mine attains the world-class status it deserves. I very much look forward to reinvigorating the company and to its future success. I would like to thank outgoing management for their hard work and dedication over many years. In particular I wish Tim Miller (retiring president and CEO) and Wanda Lee (retiring CFO) well in their next endeavours.”
Mr. Miller has resigned as president and CEO and as a director of the company. Ms. Lee will retire as CFO of the company effective Nov. 30, 2011.
Mr. Clark stated: “We are excited about the future of Atacama and of the Aguas Blancas mine. Our team will immediately assume operational control at the mine. We have begun the process of improving operations with the aim of increasing production, reducing costs and increasing earnings per share. We aim to add further value for Atacama shareholders through future corporate M&A transactions and exploration, with particular emphasis on opportunities in West Africa and South America.”
In connection with the change in management, the company has agreed to acquire 100 per cent of the issued capital of Sirocco Gold Inc., a private company with exploration interests in West Africa for a consideration of 20 million shares in Atacama. Messrs. Clark, Jackson, Bitelli, Ross and Stuart, among others, are shareholders of Sirocco, as is Zebra Holdings and Investments Sarl, a company controlled by a trust, the settlor of which was the late Adolf H. Lundin.
The acquisition of Sirocco is conditional on the completion of a non-brokered private placement to the new management team and certain shareholders of Sirocco of a total of up to 10 million shares at a price of 50 cents per share for gross proceeds of $5-million. Proceeds of the private placement will be used to advance projects held by Sirocco and to pursue opportunities in West Africa and South America. The common shares to be issued in connection with this private placement will be subject to a four-month statutory hold period pursuant to applicable securities laws.
Mr. Clark is a director and shareholder of the company and of Sirocco, and will be subscribing to the private placement. Due to this relationship, that portion of the private placement is considered to be a related party transaction as defined under TSX Venture Exchange policy 5.9 — Protection of Minority Security Holders in Special Transactions and Multilateral Instrument 61-101. However, the private placement is exempt from the valuation and minority shareholder approval requirements of policy 5.9 and MI 61-101 for related party transactions as neither the fair market value of the securities to be distributed in the private placement nor the consideration to be received for those securities, insofar as the transaction involves interested parties, exceeds 25 per cent of Atacama’s market capitalization. It is anticipated that Mr. Clark will subscribe for 2.15 million common shares in the private placement.
The acquisition of Sirocco by the company is also considered to be a related party transaction as Mr. Clark is a director and shareholder of Atacama as well as Sirocco, and Zebra is a significant shareholder of both Atacama and Sirocco. Zebra and another company controlled by the same trust have direction or control over 19.19 per cent of the current issued and outstanding common shares of Atacama, and Zebra holds 28.9 per cent of the current issued and outstanding common shares of Sirocco. However, the acquisition is exempt from the valuation and minority shareholder approval requirements of policy 5.9 and MI 61-101 as the fair market value of the consideration for the acquisition, insofar as the acquisition involves interested parties, does not exceed 25 per cent of Atacama’s market capitalization.
Both the acquisition of Sirocco by the company and the private placement were approved by the independent directors of Atacama, having received a fairness opinion from an independent financial adviser addressed to its board of directors.
The acquisition of Sirocco and the private placement are contingent upon one another, and may close prior to the expiry of the 21-day period following the filing of the material change report respecting this announcement if management of the company determines it to be necessary for sound business reasons. Closing of the acquisition and the private placement is subject to receipt of regulatory approval.
