American Gold Capital Corporation

Chesapeake Gold Corp.

Chesapeake Gold Corp.

January 17, 2007 09:17 ET

American Gold and Chesapeake Gold Announce American Gold Shareholder Approval of Business Combination

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 17, 2007) - American Gold Capital Corporation ("American Gold") (TSX VENTURE:AAU) and Chesapeake Gold Corp. ("Chesapeake") (TSX VENTURE:CKG) today announce that the previously announced proposed statutory plan of arrangement (the "Arrangement") involving American Gold and Chesapeake has been approved by American Gold shareholders.

At the extraordinary general meeting of shareholders held yesterday, January 16, 2007, approximately 62% of the shareholders of American Gold voted unanimously (100% in favour) to approve the Arrangement.

At the shareholders' meeting the shareholders also approved the de-registration of American Gold in the Cayman Islands and transfer by way of continuation (the "Continuation") of American Gold into British Columbia under the Business Corporations Act (British Columbia) (the "BCBCA"), which has now become effective.

The closing of the transaction remains subject to approval of the Supreme Court of British Columbia as well as satisfaction or waiver of other conditions of the Arrangement, including approval by the TSX Venture Exchange. Application for final court approval is scheduled to be heard by the Supreme Court on January 18, 2007. If court approval is obtained and the other conditions to closing are satisfied or waived, the transaction is expected to close prior to the end of January 2007.

As previously announced, under the Arrangement, Chesapeake will issue for every outstanding share of American Gold (i) 0.29 Chesapeake common shares, (ii) 0.145 Chesapeake common share purchase warrants and (iii) 0.029 Chesapeake Class A, Series 1 Restricted Voting shares. A detailed description of the proposed transaction, including the securities of Chesapeake proposed to be issued, is set out in the Information Circular of American Gold dated December 15, 2006 which was sent by American Gold to its shareholders, and filed on SEDAR.

Forward looking statements

This press release contains certain forward looking statements that may involve a number of risks and uncertainties. Actual results could differ materially from the Company's expectations and projections. In addition, the completion of the transactions contemplated by this release is conditional upon a number of factors, many of which are outside of American Gold's control. There is no assurance that the transactions will be completed at all or upon the same terms and conditions previously announced.

The TSX Venture Exchange has neither approved nor disapproved and does not accept responsibility for the adequacy or accuracy of the information contained in this press release.

Contact Information

  • Chesapeake Gold Corp.
    P. Randy Reifel
    (604) 731-1094
    American Gold Capital Corporation
    Chris K. Falck
    (604) 689-1765, ext. 1