VANCOUVER — Fronteer Development Group has announced its intention to purchase all the outstanding common shares of Aurora Energy Resources that it does not already own. Aurora shareholders will receive 0.825 of a Fronteer share for each Aurora share they hold. The offer represents a premium of 166% over the Aurora closing price of $0.97 and Fronteer's closing price of $3.13 per share on Dec. 19, 2008.
Fronteer owns and controls approximately 42% of the outstanding common shares, making it Aurora's single largest shareholder. Certain institutional shareholders of Aurora have entered into lock-up agreements pursuant to which they have agreed to tender common shares to the proposed offer, representing 26% of the issued and outstanding Aurora share. The remaining 32% of the outstanding shares are widely held.
Completion of the deal offers several advantages to Fronteer. By combining the current cash and cash equivalents of the two companies, Fronteer will have a balance of $186 million, eliminating the need to seek equity financing or incur debt. The ownership of the Michelin uranium project in the Central Mineral Belt of coastal Labrador is simplified.
Aurora shareholders would benefit from an expanded focus that includes gold and copper-gold assets as well as uranium. That shift is significant in that the Michelin property is subject to a three-year uranium mining moratorium.
The formal takeover bid circular is to be mailed to all Aurora shareholders by the end of January 2009. More information is available at www.Aurora-Energy.ca and www.FronteerGroup.com.
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