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Proxy advisory firms support Lake Shore Gold’s Temex takeover offer

2nd September 2015

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Independent proxy advisory firms Institutional Shareholder Services (ISS) and Glass, Lewis & Co have backed Lake Shore Gold’s binding proposal to buy project developer Temex Resources.

The company explained on Wednesday that under the terms of the proposal, Temex shareholders would receive, for each Temex share, 0.105 of a Lake Shore Gold share, having a value of $0.13 based on the closing price of Lake Shore Gold's shares on the TSX.

ISS recommended that Temex shareholders vote for the arrangement resolution at the company’s annual and special meeting scheduled for September 14, citing the significant premium offered to Temex shareholders and the absence of substantial governance concerns under the arrangement, as well as the favourable market reaction to the arrangement.

Temex shareholders would receive a premium of 106% to the 15-day volume-weighted average trading price of the Temex common shares on the TSX, should the Lake Shore Gold proposal be implemented.

Glass Lewis recommended that Temex shareholders vote for the arrangement resolution, given that the arrangement did not deviate from standard industry practice and reasonably reflected current market conditions, and provided Temex shareholders with a compelling opportunity to convert their equity into equity of a larger, more diverse and better capitalised mining entity.

"We believe there are strong synergies between Temex and Lake Shore Gold and the combination of Temex with Lake Shore Gold will create a leading and focused gold exploration and development company based in the Timmins gold camp and within north-eastern Ontario.

“Lake Shore Gold has ample capital and resources to rapidly advance their exploration-stage portfolio to which our Whitney and Juby projects add substantial upside,” Temex president and CEO Ian Campbell stated.

"Our proposed acquisition of Temex provides an attractive opportunity to increase our asset base in the Timmins camp. The transaction is very complementary to our ongoing efforts to sustain and extend our current operations in Timmins and aggressively advance our very exciting organic growth opportunities in the area,” Lake Shore Gold president and CEO Tony Makuch said.

Temex held a 60% interest in a joint venture with Goldcorp Canada on the Whitney property, which was immediately next to Lake Shore Gold's Bell Creek mine and mill. Whitney included the past producing Hallnor, Broulan Reef and Bonetal mines.

Temex had issued resource estimates for Whitney that included 970 000 t at a grade of 7.02 g/t for 218 100 oz of gold in the measured category, 2.3-million tonnes at a grade of 6.77 g/t for 490 500 oz of gold in the indicated category and one-million tonnes at a grade of 5.34 g/t for 170 700 oz of gold in the inferred category.

Temex also held a 100% interest in the Juby gold project, in the Shining Tree Area of Ontario. Resource estimates at Juby included 26.6-million tonnes at a grade of 1.28 g/t for 1.09-million ounces in the indicated category and 96.2-million tonnes at a grade of 0.94 g/t in the inferred category.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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