Dec 17 2010
Fronteer Gold Inc. (TSX:FRG)(NYSE Amex:FRG) announces today it has entered into an Asset Sale Agreement under which Paladin Energy Ltd. (ASX:PDN)(TSX:PDN) will acquire 100% of the uranium assets of Aurora Energy Resources Inc., a wholly owned subsidiary of Fronteer Gold.
Under the terms of the Agreement, Fronteer Gold will receive 52.1 million common shares of Paladin valued at C$260.87 million, calculated using the recent five-day volume weighted average price of Paladin common shares on the TSX. Upon closing, Fronteer Gold will be the largest Paladin shareholder at approximately 6.7%. Closing of the transaction is expected in the first quarter 2011 and remains subject to applicable regulatory approvals, including approval of the TSX.
This transaction is consistent with Fronteer Gold's stated goal of becoming a significant gold producer in Nevada, and allows management to focus time and resources on advancing the company's recently consolidated flagship Long Canyon project and wholly owned Northumberland project.
"This transaction crystallizes significant value for Fronteer Gold's uranium assets," says Mark O'Dea, President and CEO of Fronteer Gold. "Paladin is uniquely positioned to advance Aurora's Michelin Project by virtue of their demonstrated development skills, excellent financial strength and strong track record of social and environmental stewardship in communities in which they operate. With this world-class project added to their development pipeline, we believe Paladin will have one of the most exciting production growth profiles in the uranium industry. This transaction gives us the option of maintaining exposure to the uranium price through a meaningful shareholding in a high-quality, diversified uranium producer. Ultimately, this capital will be deployed to build out our Nevada gold projects, leaving our company in an exceptionally strong strategic and financial position."
John Borshoff, Managing Director and CEO of Paladin comments: "We welcome Fronteer Gold as our largest shareholder and acknowledge the quality of work completed moving Aurora's uranium assets forward. Paladin remains one of the few independent global uranium producers and this acquisition provides geographic diversification and a world-class asset located in Canada, a leader in global uranium production. Paladin plans to advance these assets in accordance with our communicated growth strategies, thus benefiting all shareholders, customers and the stakeholders of Nunatsiavut, Newfoundland and Labrador."
Source: Fronteer Gold Inc