AXMIN Inc.
TSX VENTURE : AXM

AXMIN Inc.

November 09, 2009 09:34 ET

AXMIN and Toro Gold Enter Into Exclusive Negotiations

TORONTO, ONTARIO--(Marketwire - Nov. 9, 2009) –

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

AXMIN Inc. ("the Company") (TSX VENTURE:AXM) is pleased to announce that it entered into a letter agreement dated October 16, 2009 (as amended on November 9, 2009) with respect to a non-binding proposal that provides for, among other things, a binding provision with respect to exclusive negotiations (subject to customary exceptions which allow the Board of Directors of AXMIN to consider any superior proposal) until November 20, 2009 with Toro Gold Ltd. ("Toro Gold"), a private company incorporated under the laws of Guernsey, to acquire all of the outstanding common shares of AXMIN at a purchase price of C$0.14 in cash per common share (the "Transaction").

The Transaction is expected to be completed by way of a statutory plan of arrangement under the Canada Business Corporations Act, pursuant to which a finance subsidiary of Toro Gold would acquire 100% of the common shares of AXMIN.

The Transaction is and will be subject to a number of conditions including the completion by Toro Gold of an equity financing (on terms and conditions satisfactory to AXMIN) in order to allow Toro Gold to satisfy the aggregate cash purchase price under the Transaction, execution of a definitive arrangement agreement, execution of an irrevocable voting agreement by the Addax & Oryx Group Limited and the receipt of all required board, regulatory and shareholder approvals.

Assuming a definitive agreement in respect of the Transaction is executed, AXMIN will be required to, among other things, mail an information circular to shareholders and call and hold a meeting of shareholders to approve the Transaction.

Assuming satisfaction of all conditions to the Transaction it is anticipated that the Transaction will close in January 2010. There can be no assurance that the Transaction or any other transaction will be completed by such date or at all.

The exclusive negotiations arise from the formal strategic review process undertaken by the Board of Directors which began on March 19, 2009. This strategic review process encompassed a thorough analysis and evaluation of the prospects and options available to AXMIN, including the potential sale of AXMIN or its assets, the acquisition by AXMIN of another company or business, a business combination, merger or amalgamation, or any other alternative that may be identified.

On March 19, 2009, AXMIN retained Paradigm Capital Inc. as its financial advisor to provide strategic advice in connection with the review of strategic alternatives in order to enhance shareholder value.

AXMIN has been advised by Toro Gold that:

BMO Capital Markets is acting as Toro Gold's exclusive financial advisor and sole bookrunner in connection with the Transaction. The syndicate, which also includes Wellington West Capital Markets as a co-lead and Ocean Equities, has agreed to carry out a brokered private placement of subscription rights ("Subscription Rights") to be issued by a finance subsidiary of Toro Gold on a reasonable endeavours basis ("Financing"). The proceeds of the Financing will be held in escrow and will be used to satisfy the aggregate cash purchase price under the Transaction.

Subscription Rights will represent an exchange right to receive rights of Toro Gold ("Toro Rights"), where the Toro Rights will automatically be exchanged into common share ("Common Share") of Toro Gold, without payment of additional consideration, upon the closing of the Transaction with such Common Shares not being subject to a hold period under Canadian securities law.

The use of proceeds from the Financing will be for the acquisition of AXMIN and for general corporate purposes. Closing of the Financing is expected to occur immediately prior to the signing on the definitive agreement in respect of the Transaction, subject to customary conditions and approvals.

The Subscription Rights will be offered pursuant to prospectus exemptions in certain provinces of Canada, in Europe and in the United States on a private placement basis pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended.

The Subscription Rights, the Toro Rights and the Common Shares have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States to any person absent registration or an applicable exemption from registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy the Subscription Rights, Toro Rights or Common Shares in the United States.

The description of the Financing is a summary only and is preliminary in nature. As the terms and conditions of the Financing have yet to be determined by Toro and BMO Capital Markets, the description of the Financing herein is incomplete and the actual terms and conditions of the Financing may contain different and/or additional terms and conditions, some of which may not be acceptable to AXMIN. There is no assurance that the Financing will be completed by Toro, or if completed, such Financing will be on terms and conditions satisfactory to AXMIN.

About AXMIN

AXMIN is a Canadian exploration and development company with a strong focus on central and west Africa. AXMIN has projects in Central African Republic, Mali, Sierra Leone and Senegal. For more information regarding AXMIN visit our website at www.axmininc.com.

About Toro Gold

Toro Gold Ltd. is a private gold exploration and development company focussed on sub-Saharan Africa with a specific emphasis in equatorial Africa. Toro Gold Ltd has been established around an experienced management team with significant pan-African exploration, development and operational success. Toro Gold is seeking to establish a mid-tier gold development and production company through a combination of acquisition and organic growth. Toro Gold Ltd. has its registered address at PO Box 100, Sydney Vane House, Admiral Park, Guernsey. GY1 3EL. and is registered in Guernsey under registered number: 50076. More information can be found at www.torogold.com.

This press release includes certain "Forward-Looking Statements." All statements, other than statements of historical fact, included herein, including without limitation, statements regarding the completion of the Transaction and the Financing, the anticipated and actual terms and conditions of the Transaction, the Financing and any definitive agreements entered into in connection with the Transaction or the Financing, potential mineralization and reserves, exploration results and future plans and objectives of AXMIN, are forward-looking statements that involve various risks and uncertainties.

There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from AXMIN's expectations are disclosed under the heading "Risk Factors" and elsewhere in AXMIN documents filed from time-to-time with the TSX Venture Exchange and other regulatory authorities. AXMIN disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • AXMIN Inc.
    Mario Caron
    President & CEO
    416 368 0993 ext 223
    or
    AXMIN Inc.
    Judy Webster
    Manager Investor Relations
    416 368 0993 ext 221
    ir@axmininc.com