Gold Wheaton Gold Corp.

Gold Wheaton Gold Corp.

March 12, 2010 08:00 ET

Gold Wheaton Supports First Uranium Convertible Note Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 12, 2010) - Gold Wheaton Gold Corp. (TSX:GLW) ("GWC") announces that it has entered into an agreement to participate in a financing to be completed by First Uranium Corporation ("FIU"). The financing will consist of a private placement offering (the "Offering") of a minimum of C$125 million and maximum of C$150 million in senior secured convertible notes (the "Notes") due March 31, 2013. GWC has agreed to purchase up to C$20 million of the Notes, subject to certain conditions. Simmer and Jack Mines Ltd. ("Simmer and Jack"), FIU's largest shareholder, has agreed to purchase C$40 million of the Notes (the Simmer and Jack portion of the Notes to be denominated in South African Rand). An additional minimum C$65 million and maximum C$110 million Notes will be offered to accredited investors by RBC Capital Markets Inc. who have been retained as exclusive placement agent for FIU. GWC may, at its election, reduce its C$20 million commitment to the extent that the Offering to accredited investors exceeds C$65 million in gross proceeds.

Each Note will have a principal amount of C$1,000 and will be convertible into 769.2307 common shares of FIU representing a conversion price of C$1.30 per share, an 13% discount to the 5-day volume weighted average price of the common shares of FIU (the "Common Shares").

The Notes will be guaranteed by the subsidiaries of FIU, secured by second ranking security over all assets currently encumbered by GWC except for the pledge of gold production and first ranking security over all other current and future assets of FIU, will not be redeemable until maturity and will be subject to typical anti-dilution protections. Appropriate intercreditor arrangements will be entered into.

Subject to completion of the Offering, Simmer and Jack has agreed to exchange its US$21.2 million loan due and owing by FIU plus accrued and unpaid interest for an equivalent value of Notes (the "Debt Payment"), which is in addition to the Offering. In addition, GWC has agreed to settle in part the US$42 million completion potential penalty due pursuant to its gold stream transaction with FIU for 14 million Common Shares and a deferred commitment to complete construction of the third gold plant module and satisfaction of the technical completion tests prior to September 1, 2011 (the "Penalty Payment"). In the event that the construction and technical completion tests are not met by such date, a US$1.5 million payment shall be payable by FIU to GWC on the first day of each of September, October, November and December, 2011, unless such tests have been met prior to each such date. In the event that these commitments are not met prior to December 1, 2011, a remaining penalty of US$30 million will be payable.

The commitments of GWC and Simmer and Jack are conditional upon, among other things, FIU raising a minimum of C$125 million under the Offering, granting of security, the Common Shares remaining listed on the Toronto Stock Exchange (the "TSX"), regulatory approval, settlement of definitive documentation and settlement of an anti-dilution agreement permitting Simmer and Jack to retain its pro rata holding in FIU.

Changes to management and the board of directors of FIU are proposed, including the appointment of Deon van der Mescht as Interim Chief Executive Officer. The board will consist of seven members consisting of three nominees of Simmer and Jack. If GWC subscribes for a minimum of C$10 million of the Notes, then GWC will be entitled to nominate one director.

The securities issuable pursuant to the Offering will be subject to applicable regulatory hold periods. Proceeds of the Offering will be used for MWS capital expenditures including completion of the first module uranium plant, new tailings facility, phase 2 gold plant, restructuring, financing and interest expenses and for general corporate purposes.

GWC was advised by Paradigm Capital Inc. and Cassels Brock & Blackwell LLP on this transaction.

Cautionary Note Regarding Forward-Looking Statements

Safe Harbor Statement under the United States Private Securities Litigation Reform Act of 1995: Except for the statements of historical fact contained herein, the information presented constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including but not limited to those with respect to the price of gold, platinum or palladium, the timing and amount of estimated future production, costs of production, reserve determination and reserves conversion rates involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of GWC or FIU to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among other risks, risks related to the integration of acquisitions, risks related to international operations, risks related to joint venture operations, the actual results of current exploration activities, actual results of current reclamation activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of gold, platinum or palladium, as well as those factors discussed in the section entitled "Description of Business - Risk Factors" in GWC's Annual Information Form dated December 10, 2009 as filed on SEDAR. Although GWC has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Contact Information

  • Gold Wheaton Gold Corp.
    David Cohen
    Chairman and Chief Executive Officer
    +1 (778) 373-0107