LIONGOLD CORP LTD COMPANY ANNOUNCEMENT

Transcription

1 LIONGOLD CORP LTD COMPANY ANNOUNCEMENT (I) PROPOSED SUBSCRIPTION OF 33,913,000 NEW SHARES CONSTITUTING APPROXIMATELY 12.82% OF THE EXISTING ISSUED AND PAID-UP SHARE CAPITAL OF CASTLEMAINE GOLDFIELDS LIMITED (II) PROPOSED ACQUISITION OF 100% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF CASTLEMAINE GOLDFIELDS LIMITED, INCLUDING ANY SHARE THAT MAY BE ALLOTED AND ISSUED AS A RESULT OF THE EXERCISE OF OPTIONS AND AS A RESULT OF ALLOTMENTS UNDER CASTLEMAINE GOLDFIELDS LIMITED S PERFORMANCE RIGHTS PLAN 1. INTRODUCTION LionGold Corp Ltd ( LGC or the Company ) wishes to announce that it had on 14 April 2012 entered into 2 agreements with Castlemaine Goldfields Limited ( CGT ) as follows: (a) (b) an agreement ( Subscription Agreement ) to subscribe for 33,913,000 new shares ( CGT New Shares ), constituting approximately 12.82% of the existing issued and paidup share capital of CGT (being approximately 11.37% of the enlarged issued share capital of CGT after the issue of the CGT New Shares) at a subscription price of A$0.115 ( Subscription Price ) (approximately S$0.1490, at an exchange rate of A$1.00 to S$1.2953) for each CGT New Share; and an Implementation Deed ( Implementation Deed ) under which the Company agrees to make an off-market takeover bid ( Takeover Bid ) for all the issued shares of CGT (except those already owned or controlled by the Company), including (i) any share of CGT that may, pursuant to the exercise of options granted, be allotted and issued by CGT, and (ii) any share that may, pursuant to the CGT Performance Rights Plan, be allotted and issued by CGT (collectively the CGT Shares ), at a bid price of A$ (approximately S$0.2386, at an exchange rate of A$1.00 to S$1.2953) for each CGT Share. The subscription for the CGT New Shares and the Takeover Bid for the CGT Shares is being made in the ordinary course of business and is in furtherance of the Company s strategy to Accelerate and Amass investments in the gold mining industry (please refer to the Company s Circular dated 14 February 2012). As at the date of the Implementation Deed and save for the CGT New Shares, the Company does not own or control (whether directly or indirectly) any CGT Share and none of the directors or substantial shareholders of the Company owns or controls any CGT Share. Prior to the Subscription Agreement and the Implementation Deed, neither the Company nor any of its directors or substantial shareholders had any dealings (business or otherwise) with CGT or any of the directors of CGT. To the best of the Company s knowledge and belief, none of the 1

2 directors and/or substantial shareholders of CGT have an interest in the shares of the Company. 2. ABOUT CGT (information relating to CGT has been extracted from publicly available sources) CGT is a company incorporated in Australia whose shares are listed and quoted for trading on the Australian Stock Exchange (ASX: CGT). As at the date of the Subscription Agreement and the Implementation Deed, CGT has (a) 264,603,503 ordinary fully paid shares in issue (excluding the CGT New Shares), (b) unlisted options of 290,000, which could result in the issue of up to 290,000 CGT Shares if the options were exercised, and (c) a maximum of 8,350,000 CGT Shares that may be allotted and issued pursuant to the CGT Performance Rights Plan (subject to the approval of CGT Shareholders at the CGT Annual General Meeting on 30 April and then subject to the satisfaction of certain milestones under the CGT Performance Rights Plan). As at the date of the Subscription Agreement and the Implementation Deed, CGT has a market capitalization of approximately A$30,085,418 based on the volume weighted average price of A$ as at the date of the Subscription Agreement and the Implementation Deed. CGT has its registered office at 10 Woolshed Gully Drive, PO Box 98, Mount Clear, Victoria, Australia The directors of CGT are: Name Gary Scanlan Matthew Gill Drew Henry Peter McCarthy Peter Lester Designation Non-Executive Chairman Managing Director and CEO Non-Executive Director Non-Executive Director Non-Executive Director CGT is a gold explorer and producer with exploration titles across 5 goldfields in Central Victoria, Australia, namely, Major Project Ballarat Gold Project 100% owned Regional Hub Projects Berringa Project 100% Castlemaine Project 100% Sebastian/Raydarra Project 100%, but subject to a farm-in agreement Tarnagulla Project 100% CGT has reported JORC Code (1) compliant Inferred (2) Resources (3) as follows: Ballarat Gold Project Castlemaine Project 160,000 tonnes at 9.5 g/t gold for 47,700 ounces of gold 2.1 million tonnes at 8.3 g/t gold for 574,000 ounces of gold at the Chewton Deposit 2

3 610,000 tonnes at 5.7 g/t gold for 112,000 ounces of gold in remnant areas of the adjacent Wattle Gully gold mine Notes: (1) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves promulgated by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (2) "Inferred Resource" is that part of a resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability. Mineral Resources which are not Ore Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, operational cost, metal price, mining control, dilution or other relevant issues. There has been insufficient exploration to define these Inferred Mineral Resources as an Indicated or Measured Mineral Resource, as there is insufficient close-spaced drill hole data to adequately define grade and geological continuity for this structurally complex deposit. It is uncertain if further exploration will result in upgrading the Inferred Mineral Resource to an Indicated or Measured Mineral Resource category or to Ore Reserves. (3) Please refer to the Statement on Resources appearing at the end of this announcement. Additional information relating to CGT may be obtained from: CGT s website at and ASX website at 3. SUBSCRIPTION Under the terms of the Subscription Agreement, the Company has agreed to subscribe for the CGT New Shares for cash. The aggregate Subscription Price is A$3,899,995 ( Placement Consideration ) (equivalent to approximately S$5,051,664 at an exchange rate of A$1.00 to S$1.2953). The Subscription Price is equivalent to the volume weighted average price of each CGT Share as traded on the ASX on the date the Subscription Agreement was entered into. The salient terms of the Subscription Agreement are: Time and place of Completion Completion will take place on the Completion Date (being seven (7) days from the date the Subscription Agreement is executed) at the offices of CGT at am, or at such other place and time as the parties may agree. Subscriber Obligations on Completion On or prior to Completion the Company must provide CGT with the Placement Consideration in immediately available funds by way of bank cheque or electronic transfer to an account previously nominated by CGT in writing. CGT Obligations CGT must: 3

4 (a) (b) (c) (d) (e) at Completion, allot and issue CGT New Shares and deliver an irrevocable direction to the CGT's share registry to promptly enter the Company's name in CGT s register of members as the holder of the CGT New Shares; as soon as practicable after Completion, take all steps to procure the delivery to the Company of confirmation through the "Issuer Online" system that the CGT New Shares issue and allotment process has commenced; on the day of Completion, apply for quotation for the CGT New Shares on the ASX and do all things reasonably necessary to ensure that the CGT New Shares are quoted as soon as practicable on such terms and conditions as are usual for quotation of securities; as soon as practicable after Completion, and in any event within 5 Business Days after the Completion Date, issue a notice which complies with section 708A(6) of the Corporations Act; and within 2 Business Days following Completion, take all steps to procure the delivery to the Company of a holding statement that the CGT New Shares have been issued and allotted to the Company with effect from the Completion Date. Obligations interdependent The obligations of the parties in respect of Completion are interdependent and all actions required to be performed will be taken to have occurred simultaneously on the Completion Date. Capital structure of the Company CGT will not, except with the prior written consent of the Company, from the date of the Subscription Agreement to the Completion Date: (a) (b) issue or agree to issue any CGT Share or other securities, other than upon exercise of any options on issue before the date of the Subscription Agreement or any performance rights as contemplated by CGT's announcement on 24 February 2012 and notice of meeting dated 26 March 2012; or implement a share consolidation or subdivision, a capital reduction or a share buy-back or any other capital reconstruction. Director Nomination Right The Company has the right but not the obligation at any time to nominate a person to be a director of CGT, provided that the Company provides the written consent of the nominee to do so and provided that this right is exercised no earlier than the Completion Date and no later than 6 months after the Completion Date. If the Company exercises this right, CGT agrees to procure the appointment of such person as a director of CGT. Warranties Mutual warranties 4

5 Each party warrants and represents to each other that each of the following statements is true, correct and not misleading on the date of the Subscription Agreement and will be so at all times before and including the Completion Date: (a) (b) (c) (d) (e) it has full and lawful authority to execute and deliver the Subscription Agreement and to perform or cause to be performed its obligations under the Subscription Agreement; the Subscription Agreement constitutes a full and binding legal obligation upon it; the Subscription Agreement does not conflict with or result in the breach of or default under any provision of its constituent documents or any material term or provision of any agreement, deed, writ, order, injunction, rule, judgment, law or regulation to which it is a party or is subject or by which it is bound; it has obtained all authorisations and approvals necessary for it lawfully to enter into and perform its obligations under the Subscription Agreement; and it is not subject to any Insolvency Event. CGT warranties CGT warrants and represents to the Company (and acknowledges that the Company is entering into the Subscription Agreement in reliance on such warranties and representations) that each of the following statements is true, correct and not misleading on the date of the Subscription Agreement and will be so at all times before and including the Completion Date: (CGT New Shares): (a) (b) (c) on their allotment and issue, the CGT New Shares will be fully paid ordinary shares in the capital of CGT and will rank equally in all respects with the then existing issued CGT Shares; the issue of the CGT New Shares will not breach ASX Listing Rule 7.1, or any other ASX Listing Rule; and there are no escrow or other provisions restricting the on-sale of all or any of the CGT New Shares by the Company; (CGT's Capital): (d) (e) the capital structure of CGT set out in Schedule 2 of the Subscription Agreement contains a true, complete and accurate description of all the issued shares, options and other securities in the capital of CGT as at the date of the Subscription Agreement; and other than as set out in Schedule 2 of the Subscription Agreement or as otherwise contemplated by the Subscription Agreement or disclosed to ASX prior to the date of the Subscription Agreement, there are no agreements, arrangements or understandings in force or securities issued for the present or future issue of, or which entitle any person to require the issue of, any CGT Share or other securities in CGT; 5

6 (No Insolvency Event) (f) neither CGT nor any of its Subsidiaries is subject to an Insolvency Event; (litigation): (g) (h) (i) there are no material actions, suits, arbitrations, legal or administrative proceedings pending or, so far as CGT is aware, threatened against CGT or any of its Subsidiaries; neither CGT nor any of its Subsidiaries is the subject of any material pending or, so far as CGT is aware, material threatened investigation; and neither CGT nor any of its Subsidiaries nor the respective assets, properties or business of CGT or any of its Subsidiaries is subject to any judgment, order, writ, injunction or decree of any court, Government Agency or arbitration tribunal; and (Compliance with law): (j) (k) CGT has complied with its obligations under ASX Listing Rule 3.1 and there is no information to which ASX Listing Rules 3.1A.1, 3.1A.2 or 3.1A.3 apply, other than market disclosures to be made by CGT contemporaneously with execution of the Subscription Agreement, drafts of which were provided to the Company prior to execution of the Subscription Agreement; and CGT and its Subsidiaries have complied in all material respects with all laws and regulations applicable to them and with all orders of Government Agencies having jurisdiction over them and have all material licenses, permits and franchises necessary for them to conduct their respective businesses as presently being conducted. The Placement Consideration of A$3,899,995 would be funded by the Company s internal resources. The Placement Consideration is intended to be applied towards the implementation of the Ballarat Mine Plan and regional exploration activities. The rationale for the Subscription is based on the appraisal of recent announcements by CGT that have shown that their operations are now performing to expectation. The CGT Ballarat operations appear to have reached a cash positive position and are significantly, but not completely de-risked, It is the Company s view that access to additional finance at this time, could allow management to develop additional ore sources and de-risk the operation further. The Company believes that management have demonstrated their ability to deliver on projections, although the Company believes that they will require further support at strategic level to ultimately unlock the potential of the mine and CGT in general. It is the Company s expectation that continued strong performance by the operations will result in growth in underlying value of the business and thus justifying the risk exposure of this investment ahead of the Takeover Bid. 4. TAKEOVER BID Under the terms of the Implementation Deed, the Company has agreed to make an off-market takeover bid under and pursuant to the provisions of the Corporations Act of Australia, to 6

7 acquire all the issued shares (except the CGT New Shares) of CGT at a bid price of A$ (approximately S$0.2386, at an exchange rate of A$1.00 to S$1.2953) ( Bid Price ) for each CGT Share. The Takeover Bid is unanimously recommended by the CGT directors in the absence of a superior proposal (4 ). The CGT directors also intend to accept the Takeover Bid for CGT Shares they own or control in the absence of a superior proposal (4). As the date of the Implementation Deed, the CGT directors have interests in CGT Shares as follows: Name No of CGT Shares No of Options Gary Scanlan 607, ,000 Matthew Gill Nil Nil Drew Henry Nil Nil Peter McCarthy 470,000 Nil Peter Lester Nil Nil Note: (4) Superior Proposal means a bona fide competing proposal which the CGT Directors have determined, in good faith, is: (a) (b) (c) reasonably capable of being valued, taking into account all aspects of the competing proposal and the person making it; reasonably capable of being completed on a timely basis; and is more favourable to the CGT shareholders than the Takeover Bid, taking into account all the terms and conditions of the competing proposal. As at the date of the Implementation Deed, approximately 74% of the CGT Shares are held by the top 20 shareholders of CGT. The Company has not requested for and CGT has not procured any pre-bid undertakings from any CGT shareholder. Based on an aggregate of (a) 264,603,503 CGT Shares, (b) 290,000 unlisted options that could be converted into a maximum of 290,000 CGT Shares, and (c) a maximum of 8,350,000 CGT Shares that may be allotted and issued pursuant to the CGT Performance Rights Plan (assuming that CGT Shareholders approve the plan at the CGT Annual General Meeting on 30 April and then subject to the satisfaction of certain milestones under the CGT Performance Rights Plan)., the maximum aggregate number of CGT Shares that the Company would make a bid for is 273,243,503 CGT Shares, and based on the Bid Price, the maximum aggregate consideration that would be payable by the Company (assuming that the Company acquires all of 273,243,503 CGT Shares under the Takeover Bid) is approximately A$50,337,352 ( CGT Consideration ) (equivalent to approximately S$65,201,972 at an exchange rate of A$1.00 to S$1.2953). The Bid Price represents a premium of approximately 62.02% of the volume weighted average price of CGT Shares as traded on the ASX on 13 April 2012, which is the full market day immediately preceding the date the Implementation Deed was entered into. The Bid Price was arrived at after taking into consideration the following factors: 7

8 CGT has traded at a major discount to its long term average share price since October 2011 Recent announcements by CGT have shown that their operations are now performing to expectation. The CGT Ballarat operations appear to have reached a cash positive position and are significantly, but not completely de-risked, It is the Company s view that access to additional finance at this time could allow management to develop additional ore sources and de-risk the operation further. The Company also believes that the accepting CGT shareholders will have the benefit of a more liquid share listed on the SGX, where the Company believes that a positive and receptive investor audience will rate such an asset with significantly higher value than that enjoyed by CGT on the ASX. The price offered is deemed by the Company to be an attractive premium offered to CGT shareholders given the market performance of the CGT shares in recent months and allowing the shareholders of CGT exposure to unrealized value in return for the issuance of CGT Consideration shares. Under the terms of the Implementation Deed, the CGT Consideration is to be satisfied by the allotment and issue of such number of new shares ( CGT Consideration Shares ) credited as fully paid in the issued and paid-up capital of the Company at an issue price of S$ ( Issue Price ) for each CGT Consideration Share and at the rate of nine (9) CGT Shares for two (2) CGT Consideration Share. The entitlement of the shareholders of CGT to the CGT Consideration Shares will be pro-rated according to the number of CGT Shares they own. Under the terms of the Implementation Deed, all fractional entitlements to the CGT Consideration Shares will be rounded upwards to the nearest whole. As such, the exact number of CGT Consideration Shares to be allotted and issued will depend on the level of acceptances received and the rounding upwards of fractional entitlements. The Company will make announcements of the exact number of CGT Consideration Shares to be allotted and issued subsequent to the close of the Takeover Offer. The Issue Price of the CGT Consideration Shares is the volume weighted average price of the Company s shares as traded on the SGX-ST on Friday, 13 April 2012, which was the full market day immediately preceding the date the Implementation Deed was executed. 8

9 Based on the rate of nine (9) CGT Shares for every two (2) CGT Consideration Share and subject to rounding, and assuming that all of the Options and Performance Rights (referred to above) are capable of exercise or conversion into ordinary shares and are, in fact, exercised or converted prior to the closing date of the Takeover Offer, the maximum number of CGT Consideration Shares the Company would be required to issue would be 60,720,779 CGT Consideration Shares, subject to rounding. The Company proposes to issue the CGT Consideration Shares under the general share issue mandate obtained in general meeting at the Company s Annual General Meeting on 30 July The Company is required to lodge and issue a Bidder s Statement ( Bidder s Statement ) to the CGT shareholders within 2 months from the date of the Implementation Deed. The Takeover Offer contained in the Bidder s Statement will be opened for acceptance for a period of not less than one (1) month ( Offer Period ) from or around the date the Bidder s Statement is lodged and issued. The Company intends to lodge and issue the Bidder s Statement within the time prescribed and will keep the Takeover Offer open for not less than one (1) month thereafter. The other salient terms of the Implementation Deed are: A. Offer Conditions (a) The Takeover Offer and any contract which results from its acceptance will be subject to the following Offer Conditions: 1 Minimum acceptance At or before the end of the Offer Period, the Company has a Relevant Interest (as defined in the Corporations Act of Australia) in such number of CGT Shares which represents at least 50.1% of the aggregate of all the CGT Shares on issue. 2 Renewal of Mining Interests Between the Announcement Date (being the date this announcement is made) and the end of the Offer Period (each inclusive), no mining or exploration agreement, right or licence to explore or mine or both a particular area or to construct, use or maintain infrastructure in connection with a mining operation, including an exploration licence or mining licence held by any member of CGT Group at the Announcement Date (Mining Interests), or any interest in any Mining Interest is revoked, terminated or expires (excluding for the avoidance of doubt relinquishment of parts of tenements in the ordinary course of business) or in the case of a renewal of a Mining Interest is not granted, provided that this does not apply if the relevant Mining Interest (or interest in the relevant Mining Interest) is not any of EL 3018, MIN 5396, MIN 4847, EL 3242 or MIN FIRB approval Before the end of the Offer Period, the Treasurer of the Commonwealth of Australia (Treasurer) either: 9

10 i. ceases to be empowered to make an order under the Foreign Acquisitions and Takeovers Act 1975 (Cth) in relation to the proposed acquisition by the Company of up to all of the CGT Shares it does not already hold; or given written advice on a decision by or on behalf of the Treasurer stating (either unconditionally or on the basis of conditions which are reasonably acceptable to the Company) that there is no objection to the proposed acquisition by the Company of up to all the CGT Shares it does not already hold. 4 No prescribed occurrences During the period from the date of the Bidder's Statement to the end of the Offer Period (each inclusive), none of the following occurrences (being the prescribed occurrences listed in section 652C of the Corporations Act) happens: i. CGT converts all or any of its shares into a larger or smaller number of shares under section 254H of the Corporations Act; i iv. CGT or a subsidiary of CGT resolves to reduce its share capital in any way; CGT or a subsidiary of CGT enters into a buy-back agreement or resolves to approve the terms of a buy-back agreement under section 257C (1) or 257D (1) of the Corporations Act; CGT or a subsidiary of CGT issues shares (other than as a result of the exercise of CGT Options or CGT Performance Rights) or grants an option over its shares, or agrees to make such an issue or grant such an option; v. CGT or a subsidiary of CGT issues, or agrees to issue, convertible notes; vi. v vi ix. CGT or a subsidiary of CGT disposes, or agrees to dispose, of the whole, or a substantial part, of its business or property; CGT or a subsidiary of CGT charges, or agrees to charge or encumber, the whole, or a substantial part, of its business or property; CGT or a subsidiary of CGT resolves to be wound up; a liquidator or provisional liquidator of CGT or of a subsidiary of CGT is appointed; x. a court makes an order for the winding up of CGT or of a subsidiary of CGT; 10

11 xi. x xi an administrator of CGT or of a subsidiary of CGT is appointed under section 436A, 436B or 436C of the Corporations Act; CGT or a subsidiary of CGT executes a deed of company arrangement; or a receiver, or a receiver and manager, is appointed in relation to the whole, or a substantial part, of the property of CGT or a subsidiary of CGT, each a Prescribed Occurrence. 5 No prescribed occurrences between Announcement Date and service of Bidder s Statement None of the Prescribed Occurrences happens during the period beginning on the Announcement Date and ending at the end of the day before the Bidder's Statement is given to CGT. 6 No action by Government Agency adversely affecting the Takeover Bid During the period from the Execution Date to the end of the Offer Period: i. there is not in effect any preliminary or final decision, order or decree issued by a Government Agency; i no action or investigation is instituted, or threatened by any Government Agency with respect to CGT or any subsidiary of CGT; or no application is made to any Government Agency (other than an application by the Company or any company within the Group, an application under section 657G of the Corporations Act, or an application commenced by a person specified in section 659B(1) of the Corporations Act in relation to the Takeover Bid), in consequence of. or in conjunction with, the Takeover Bid, which restrains or prohibits or threatens to restrain or prohibit, or may otherwise materially adversely impact upon, the making of the Takeover Bid or the completion of any transaction contemplated by the Bidder's Statement (including implementing the intentions expressed therein) or seeks to require the divestiture by the Company of any CGT Shares, or the divestiture of any assets by CGT or by any subsidiary of CGT or by any company within the Group. 7 Approvals by Government Agencies During the period from the Execution Date to the end of the Offer Period, the Company receives all approvals which are required by law or by any Government Agency: 11

12 i. to permit the Offers to be made to and accepted by CGT Shareholders; or as a result of the Offers or the successful acquisition of the CGT Shares and which are necessary for the continued operation of the business of CGT and its subsidiaries or of the Company and its subsidiaries, and those Approvals are on an unconditional basis and remain in force in all respects and there is no notice or indication of intention to revoke, suspend, restrict, modify or not renew those Approvals. This includes the Company receiving the approval of the SGX-ST for the listing and quotation of the CGT Consideration Shares to be issued as Offer Consideration. 8 No material acquisitions, disposals, etc. Except for any proposed transaction publicly announced by CGT before the Announcement Date, none of the following events occur during the period from that date to the end of the Offer Period without the written consent of the Company: i. CGT, or any subsidiary of CGT, acquires, offers to acquire or agrees to acquire one or more companies or assets (or an interest in one or more companies or assets) for an amount greater than A$500,000 or makes an announcement about such an acquisition; i iv. CGT, or any subsidiary of CGT, disposes, offers to dispose or agrees to dispose of, or creates, or offers to create an equity interest in one or more companies or assets (or an interest in one or more companies or assets) for an amount greater than A$100,000 or makes an announcement about such a disposal; CGT, or any subsidiary of CGT, enters into, offers to enter into or announces that it proposes to enter into any joint venture or partnership involving a commitment of greater than A$500,000 or dual listed company structure, or makes an announcement about such a commitment; or CGT, or any subsidiary of CGT, incurs or commits to, or grants to another person a right the exercise of which would involve CGT or any subsidiary of CGT incurring or committing to any capital expenditure or liability for one or more related items of greater than A$500,000 or makes an announcement about such a commitment. 9 No material failings in filings The Company does not become aware, during the period from the Execution Date to the end of the Offer Period, that: i. any document filed by or on behalf of CGT with ASX or ASIC contains a statement which is incorrect or misleading in any material respect or from which there is a material omission; or 12

13 CGT has not made an announcement in breach of its continuous disclosure obligations. 10 Non-existence of certain rights No person has any right (whether subject to conditions or not) as a result of the Company acquiring CGT Shares to: i. acquire, or require CGT or a subsidiary of CGT to dispose of, or offer to dispose of, any material asset of CGT or a subsidiary of CGT; i terminate or vary any material agreement with CGT or a subsidiary of CGT; or accelerate or adversely modify the performance of any obligations of CGT or any of its subsidiaries in a material respect under any material agreements, contracts or other legal arrangements. 11 No force majeure event During the period from the Execution Date to the end of the Offer Period, no outbreak of hostilities (whether war is declared or not) or terrorism, mobilisation of armed forces, civil or political unrest or labour disturbance, fire or natural disaster, material increase in the intensity of any of the above events or other event beyond the control of CGT or the relevant subsidiary occurs which affects or is likely to affect the assets, liabilities, financial position, performance, profitability or prospects of CGT or any of its subsidiaries. 12 No material adverse change to CGT During the period from the Execution Date to the end of the Offer Period, no CGT Material Adverse Change occurs. CGT Material Adverse Change means: i. any individual event, change or condition which is within the reasonable control and management of the CGT Group or its officers that has, or could reasonably be expected to have, a material adverse effect on: (i) (ii) the business, assets, liabilities, financial or trading position, profitability or prospects of the CGT Group, taken as a whole, by an amount of A$3 million or more; or the status or terms of any of the exploration or mining tenements owned by CGT or its subsidiaries; or any event, change or condition (whether individual or a combination or series of events, changes or conditions) which is not within the reasonable control and management of the CGT Group or its officers 13

14 that have, or could reasonably be expected to have, a material adverse effect on: (i) (ii) the business, assets, liabilities, financial or trading position, profitability or prospects of the CGT Group, taken as a whole by an amount of A$5 million or more; or the status or terms of any of the exploration or mining tenements owned by CGT or its subsidiaries, in either case, except for events, and conditions publicly announced by CGT or otherwise disclosed on ASX by CGT or any of its subsidiaries prior to the Execution Date provided that the relevant announcement or disclosure is not, and is not likely to be, incomplete, incorrect, untrue or misleading (B) Share Sale Facility Subject to compliance with any law and, where required, approval by ASIC or ASX or SGX-ST (or any other Government Agency), the Company agrees to use best endeavours to establish prior to the lodgement of the Bidder s Statement (and in any event intends to do so prior to Offers being sent to CGT Shareholders), as part of the Offer (but not, for the avoidance of doubt, as Offer Consideration), a share sale facility to CGT Shareholders (except Foreign Shareholders) who accept the Offer but do not wish to hold CGT Consideration Shares and wish to immediately liquidate the offer consideration they receive under the Offer (C) Foreign Shareholders The Company will, unless satisfied that the laws of a Foreign Shareholder s country of residence (as shown in the Register) permit the issue of the CGT Consideration Shares to the Foreign Shareholder (either unconditionally or after compliance with conditions which the Company regards as acceptable and not unduly onerous and not unduly impracticable), issue the CGT Consideration Shares to which a Foreign Shareholder would otherwise become entitled (including after exercise of any CGT Options or CGT Performance Rights to which the relevant Foreign Shareholder would otherwise be entitled), to a nominee appointed by the Company who will sell those CGT Consideration Shares and pay to that Foreign Shareholder the proceeds. The Company will be liable for any brokerage in connection with the sale of such CGT Consideration Shares. (D) Variation and waiver i. The Company may vary the terms and conditions of the Takeover Bid in any manner which is permitted by the Corporations Act. Subject to the Corporations Act, the Company may declare the Takeover Bid to be free from any Offer Condition or to extend the Takeover Bid at any time. 14

15 (E) Institutional Acceptance Facility The Company intends to establish an Institutional Acceptance Facility on terms which are reasonably acceptable to the Company and will include details on such facility in the Bidder's Statement. The Company intends to include a statement in the Bidder's Statement to the effect that acceptances by CGT Shareholders under the Institutional Acceptance Facility will count towards the 50.1% minimum acceptance condition. (F) Fall in Company s share price of 20% or more If there is any event or circumstance which results in the rolling 20 day volume weighted average price of the Company s shares ending on any trading day during the period from the Announcement Date to the Relevant Date falling to a level that is 20% below the price of the Company s shares as at the close of trading on last trading day before the Announcement Date, the Directors of CGT are able to withdraw their recommendation to CGT Shareholders to accept the Takeover Offer and, if the Takeover Offer has not already closed, CGT can terminate the Implementation Deed after 30 June However, this is not a condition of the Takeover Offer and therefore, even if such an event or circumstances were to occur, the Company would not (in the absence of any other condition of the Takeover Offer not being satisfied) be entitled to withdraw the Takeover Offer. For the purposes of this clause, the following definitions apply: Announcement Date means the date that the Takeover Offer is announced to the ASX and SGX, being the date of this announcement; and Relevant Date means the date the Offer is no longer subject to any Conditions and the Company has a Relevant Interest (as determined under the Corporations Act of Australia) (as extended to include any CGT Shares held under the Institutional Acceptance Facility) in such number of CGT Shares which represents at least 50.1% of the aggregate of all of the CGT Shares on issue. The rationale for the Takeover Bid is motivated by the Company s analysis that the combination of support from the Company s strategic management and access to stronger financial backing through the Company, the Ballarat mine will continue to grow and prosper. Accepting CGT shareholders will have continued exposure to this success via their CGT Consideration Shares that also offer higher liquidity Additional factors considered include: 1. CGT can provide a critical base for the Company to simultaneously build on all three of its key pillars of growth, being Resource, Reserve and Production growth. 2. The Company shares in CGT s belief that the steady, medium scale development at CGT s Ballarat Gold project, will be key to unlocking its full mineral potential. 3. The Castelmaine ore deposits present technical similarities to the Company s existing operations with high nugget effect ore deposits. 15

16 4. The ores at CGT s tenements are amenable to gravity concentration and thus low environmental impact metallurgical operations, which is a key strategic approach adopted by the Company from its early stages of involvement in the gold industry. 5. The Ballarat processing facility has to potential to be a regional hub, allowing the redevelopment of a number of satellite deposits which could truck ore, or concentrates to Ballarat for gold recovery. The Takeover Bid is not conditional upon completion of the subscription of the CGT New Shares and vice versa. The opportunities to subscribe for the CGT New Shares and to make the Takeover Bid were procured by the Company itself through an unsolicited approach. The Company has not agreed to remunerate any person, whether in cash or otherwise, in relation to the subscription for the CGT New Shares and the Takeover Bid. A copy of the Subscription Agreement and the Implementation Deed are available for inspection at the Company s office in Singapore at 38 Kallang Place, Singapore for a period of three (3) months from the date of this announcement. The Company will keep shareholders informed of developments by way of announcements on SGXNET. By Order of the Board Wong Choy Yin Executive Director LionGold Corp Ltd 16 April 2012 Statement on Resources The information in this announcement that relates to exploration results, mineral resources and exploration targets is based on information compiled by Mr Wessley Edgar. Mr Edgar is an employee of CGT, is a member of the Australian Institute of Mining and Metallurgy and The Society of Economic Geologists and is a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Resources (the JORC Code). The Exploration Potential described in this announcement is conceptual in nature, and there is insufficient information to establish whether further exploration will result in the determination of a mineral resource. Mr Edgar has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the JORC Code. Mr Edgar consents to the inclusion in this Announcement of the matters based on his information in the form and context in which it appears. 16