Infinity Gold Mining Inc.

November 12, 2009 15:10 ET

Infinity Gold Mining Inc.: News Release

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 12, 2009) - Infinity Gold Mining Inc. ("Infinity" or the "Company") announces that it has today entered into an agreement with Wega Mining AS ("Wega") to acquire common shares of Wega in Merit Mining Corp. ("Merit").

Infinity has agreed to acquire 157,520 common shares in Merit from Wega and subject to (i) completion of satisfactory due diligence; (ii) obtaining satisfactory financing; and (iii) other usual conditions in a transaction of this nature, Infinity has the option over a 80 day period to acquire additional Merit common shares from Wega up to a total of 19.95% of the total Merit common shares. Subject to satisfaction of a number of conditions, Infinity has agreed to acquire all of the Merit common shares held by Wega, which totals approximately 58% of the outstanding Merit common shares, through a take over bid for all of the outstanding Merit common shares (as discussed below), and to acquire a convertible debenture issued to Wega by Merit in the amount of approximately $3 million. The share purchase price, subject to any adjustments required in the event of a conversion of existing convertible debentures issued by Merit, is $1.5871.

Merit has proposed that several convertible debentures, including that in favour of Wega, be converted for Merit common shares. In the event of that conversion, Wega would acquire an additional 12.6 million Merit common shares (approximately). If the conversion does occur as proposed by Merit, the purchase price for the shares will be adjusted to reflect and account for the increase in the number of issued and outstanding Merit common shares. If the conversion occurs on November 30, 2009, the number of shares acquired by Infinity will be adjusted such that share purchase price will be $0.4627 CDN per Merit common share. The actual adjustment will depend on the number of Merit shares issued on the conversion, which in turn depends on the date that the conversion occurs.

Subject to the fulfillment of conditions relating to due diligence, lock up agreements, obtaining satisfactory financing, satisfactory employment arrangements and a number of other conditions, Infinity has agreed to proceed with the commencement of a take over bid to acquire all of the common shares of Merit. If Infinity proceeds to make a take over bid for the Merit shares, an appropriate announcement will be made in the future. Any such take over bid will be subject to a number of conditions. Wega has agreed to tender its remaining Merit common shares to the bid, if made. 

Merit common shares are traded on the TSX Venture Exchange under the symbol "MEM".

All statements, trend analysis and other information contained in this press release relative to markets for Merit's trends in resources, recoveries, production and anticipated expense levels, as well as other statements about anticipated future events or results constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect" and "intend" and statements than an even or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. Forward-looking statements are subject to business and economic risks and uncertainties and other factors that could cause actual results of operations to differ materially from those contained in the forward-looking statements. Forward-looking statements are based upon estimates and opinions of management at the date the statements are made. Infinity does not undertake any obligation to update forward-looking statements even if the circumstances or management's estimates or opinions should change. Investors should not place undue reliance on forward-looking statements.

Infinity will be filing an Early Warning Report pursuant to National Instrument 62-103 in respect of this transaction on SEDAR. A copy of such Report will be mailed to all persons requesting such Report. A request for a copy of such Report can be made to the contact person identified below.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.

Contact Information

  • Infinity Gold Mining Inc.
    Toronto Star Building
    1 Yonge St., Suite 1801
    Toronto, Ontario M5E 1W7
    (416) 907-2723
    info@infinitygoldmining.com