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Golden China (AUC.v) : Gold in China & bioprocessing


drbubb

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Good News, eh?

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13 August 2007

SINO GOLD AND GOLDEN CHINA ANNOUNCE SIGNING OF AGREEMENT

REGARDING PROPOSED TAKEOVER OFFER FOR GOLDEN CHINA

Sino Gold Mining Limited (“Sino Gold”) (ASX: SGX, SEHK:1862 ) and Golden China

Resources Corporation (“Golden China”) (TSX/ ASX: GCX) today announced that they have

entered into an agreement (the “Agreement”) regarding a proposed offer (the “Offer”) by

Sino Gold for all of the outstanding common shares of Golden China.

 

The Agreement, which values Golden China at A$80.7 (C$73.0) million, has the unanimous

support of the Golden China board of directors. Under the proposed Offer, Golden China

shareholders would receive one Sino Gold share for every 4.5 Golden China common

shares they hold. Following successful completion of the Offer, should Sino Gold acquire all

of the currently outstanding Golden China shares, Golden China shareholders would

collectively hold an interest of approximately 6.5%1 in Sino Gold.

 

The Offer values Golden China at a 51% premium over the TSX closing price on 10th August

2007, and a 48% premium over the 10 day TSX volume weighted average trading price of

the Golden China common shares.

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http://www.asx.com.au/asxpdf/20070813/pdf/313y57w350k0wn.pdf

 

Question: What's going to happen to the warrants? Do we get shares for those or would it be advisable to exercise the warrants now?

 

The warrants wont have much value now. Usually (but not always) they stay alive

I woudl recommend holding them

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In addition to the proposed Offer for Golden China’s common shares, the Agreement

contemplates that each outstanding Golden China option, warrant and convertible

security would be proposed to be amended so as to provide that the holder would be

entitled to receive, upon the exercise or conversion thereof, in lieu of a Golden China

common share, for every 4.5 held, one Sino Gold ordinary share on substantially the

same terms and conditions as the outstanding Golden China security, except that the

exercise price will reflect the Exchange Ratio.

 

I read that as we will get equivalent warrants in Sino Gold.

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Calculation ::

 

A$ (SGX.au) : A$6.41 x0.845 = us$5.42

divided by... : US$5.42 / 4.5 = us$1.203 ,

 

C$ ... 0.95 ... so us$1.203 / 0.95 = c$1.267

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