St Andrew Goldfields Ltd.
TSX : SAS

St Andrew Goldfields Ltd.

April 21, 2008 18:30 ET

St Andrew Announces Debt Conversion Agreement With Technifund Inc.

OAKVILLE, ONTARIO--(Marketwire - April 21, 2008) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

St Andrew Goldfields Ltd. (TSX:SAS) ("St Andrew" or the "Company") announces that it has reached an agreement with Technifund Inc. and Herbert Abramson, the Chairman of the Company's Board of Directors (collectively "Technifund") pursuant to which St Andrew will issue common shares valued at $0.55 per share in full satisfaction of $42 million aggregate principal amount of indebtedness held by Technifund. Technifund is a private company controlled by Herbert Abramson. Pursuant to the terms of the transaction, which is subject to the approval of the Toronto Stock Exchange and to the approval of the minority shareholders of St Andrew, St Andrew will issue 76,363,636 common shares, being approximately 32.4% of St Andrew's current issued capital, to Technifund in satisfaction of $15 million principal amount 10% secured debentures and $27 million principal amount 10% notes. As a result of the share issuance, Technifund's share ownership in St Andrew will increase from 15.1% to approximately 35.9%. Prior to completion of the transaction with St Andrew, Technifund which presently holds $4 million of the $15 million outstanding debentures, will acquire the remaining $11 million from Trapeze Asset Management Inc., an insider of St Andrew. The proposed share issue price of $0.55 per share is at a 38% premium to the last closing price for the Company's shares and is equal to the price at which the Company completed its $14.75 million private placement in January 2008. Minority shareholders of St Andrew will be asked to approve the transaction at the annual and special meeting of shareholders to be held on June 23, 2008.

In January 2008, the Board of Directors formed an independent committee of directors, namely Bernard Kraft, Stephen Burns and Louis Gignac to assist management of St Andrew with gathering and reviewing possible financing alternatives available to St Andrew. The independent committee retained GMP Securities L.P. ("GMP") as its financial advisor and retained independent legal counsel to assist it in discharging its responsibilities. GMP has advised the independent committee that the proposed transaction is fair, from a financial point of view, to minority shareholders of St Andrew. A copy of the fairness opinion will be included in the Management Information Circular to be mailed to shareholders in connection with the annual and special meeting. The Board of Directors of St Andrew, based on the recommendations of the independent committee, has concluded that the proposed transaction is in the best interests of St Andrew and is fair to the minority shareholders of St Andrew. In reaching this conclusion, the independent committee and the Board considered numerous factors, including that the proposed transaction will enable St Andrew to eliminate a significant portion of its outstanding indebtedness by issuing shares at a premium to the existing market price for its shares. By eliminating such indebtedness, St Andrew will have significantly strengthened its balance sheet and will eliminate $4.2 million of annual debt service obligations.

The transaction constitutes a "related party transaction" under Multilateral Instrument 61-101. Minority shareholder approval of the transaction will be sought at the June 23rd meeting of St Andrew's shareholders, excluding the votes of shares beneficially owned or over which control or direction is exercised by any of Herbert Abramson, Technifund and Randall Abramson, as well as Trapeze Capital Corp. and Trapeze Asset Management Inc., corporations controlled by Randall Abramson, and each of their respective affiliates and associates. An exemption from the requirement to prepare a formal valuation in respect of the transaction will be relied upon on the basis that the consideration in respect of the transaction consists solely of securities of St Andrew and that St Andrew, and to its knowledge, Technifund and Herbert Abramson, have no knowledge of any undisclosed material information concerning St Andrew or its securities.

For further information about St Andrew Goldfields Ltd., please contact Investor Relations toll free at 1-800-463-5139 or email investor@standrewgoldfields.com or contact Tel: (905) 815-9855 Fax: (905) 815-9437

FORWARD LOOKING STATEMENTS

The information in this release may contain forward-looking information under applicable securities laws. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied by the forward-looking information. Factors that may cause actual results to vary material include, but are not limited to, inaccurate assumptions concerning the exploration for and development of mineral deposits, political instability, currency fluctuations, unanticipated operational or technical difficulties, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions or conditions in the financial markets and the inability to raise additional financing. Readers should refer to the Company's Annual Information Form filed at www.sedar.com for a further discussion of such risks, uncertainties and factors. Readers are cautioned not to place undue reliance on this forward-looking information. St Andrew does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.

Contact Information

  • St Andrew Goldfields Ltd.
    Don Shaxon
    Investor Relations Manager
    (905) 815-9855 or Toll Free: 1-800-463-5139
    Email: dshaxon@standrewgoldfields.com
    or
    St Andrew Goldfields Ltd.
    Jacques Perron
    President and CEO
    (905) 815-9855 or Toll Free: 1-800-463-5139
    Email: jperron@standrewgoldfields.com
    or
    St Andrew Goldfields Ltd.
    Ben Au
    CFO and VP Finance & Administration
    (905) 815-9855 or Toll Free: 1-800-463-5139
    (905) 815-9437 (FAX)
    Email: bau@standrewgoldfields.com