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Baffinland’s Board Approves Adoption Of Shareholder Rights Plan |
01/16/2006 |
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January 16, 2006 – Toronto, Ontario - Baffinland Iron Mines Corporation (TSX – V: BIM) (the “Company”) today announced that its Board of Directors has approved the adoption of a shareholder rights plan (the “Plan”) as part of its process in dealing with potential parties who may wish to acquire control of the Company by way of a take-over bid or other transaction consistent with the Company’s mandate to maximize shareholder value. Although the Company is not in any change of control discussions at this time, the Plan is intended to ensure all shareholders of the Company are treated fairly in any transaction involving a change of control of the Company.
The Plan has been adopted in order to provide the Company’s Board of Directors and shareholders with sufficient time to assess and evaluate any take-over bid or other control transaction and, in the event that a bid is made or other control transaction is proposed, to provide the Board of Directors with an appropriate period of time to explore and develop alternatives which maximize shareholder value.
Although the Plan will take effect immediately, the Company’s intention is to ask its shareholders to ratify the Plan at its next annual meeting of shareholders and the Plan will expire if that ratification is not obtained within six months. If approved, the Plan will continue in effect until the annual meeting of shareholders in 2009.
The Plan is similar to other shareholder rights plans adopted by Canadian corporations. Until the occurrence of certain specific events, the rights will trade with the common shares of the Company and be represented by the share certificates for such shares. The rights become exercisable only when a person, including any party related to it or acting jointly with it, acquires or announces its intention to acquire 20 percent or more of the outstanding common shares of the Company without complying with the “Permitted Bid” provisions of the Plan. Should a non-permitted acquisition occur, each right would entitle each holder of common shares (other than the offeror or certain parties related to it or acting jointly with it) to purchase additional common shares of the Company at a 50 percent discount to the market price at the time.
It is not the intention of the Plan to prevent take-over bids. Under the Plan, a Permitted Bid is a bid made to all shareholders on identical terms and conditions that is open for at least 60 days. If at the end of 60 days more than 50% of the outstanding shares, other than those owned by the offeror or certain parties related to it or acting jointly with it, have been tendered, the offeror may take up and pay for the shares but must extend the bid for a further 10 business days to allow all other shareholders to tender.
In other business, Baffinland is pleased to announce that it has received payment in full, amounting to $1,166,998.76, from Apollo Gold Corp. relating to the former Glimmer Mine and subsequently has satisfied Baffinland’s obligations in this regard by making payments of $566,890.90 to certain current and former members of management and certain companies related to the Company, as per Note 11, Contingencies and Commitments, to the Company’s 2004 audited Financial Statements. Consequently, the Company’s net cash balance has increased by $600,107.86 and the Company will record this amount as other income in the first quarter of 2006.
Certain information in this press release may contain forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict, including risks relating to the exploration and development of the Company’s iron ore deposits. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements. Additional information identifying risks and uncertainties is contained in the Company’s filings with the Canadian securities regulators, which filings are available at www.sedar.com.
THE TSX VENTURE EXCHANGE INC. HAS NEITHER APPROVED NOR DISAPPROVED THE CONTENTS OF THIS PRESS RELEASE.
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