TORONTO and VANCOUVER — Nuinsco Resources and Gold Hawk Resources have signed a binding letter of agreement to combine the two companies. The merged company will be led by the current Nuinsco management, and Gold Hawk will appoint two directors to the board.
Under the agreement, Nuinsco will acquire all of the issued and outstanding shares of Gold Hawk that it does not already own at an agreed-upon exchange ratio of 13.5 Nuinsco shares for each one Gold Hawk share. This is equivalent to approximately 0.074 of a Gold Hawk share for each Nuinsco share representing a value of $1.62 per Gold Hawk share, a 97.6% premium to Gold Hawk shareholders based on the closing price of both companies' common shares on Jan. 15, 2010. Based on the estimated net book value of Gold Hawk's liquid assets of $17.1 million, net of transaction costs, the transaction is equivalent to completing a financing at a price of $0.107 per Nuinsco share.
In addition, all convertible securities of Gold Hawk, consisting of 3,802,000 warrants and 515,000 stock options, will be exercisable for shares of Nuinsco based on the same exchange ratio.
The arm's length transaction is expected to close on or before April 15, 2010, and upon closing, Gold Hawk shareholders will hold approximately 40.9% of Nuinsco's then outstanding 390.6 million shares.