NEWS 12/29/2008: Linear Gold and Central Sun Mining Announce Business Combination
TORONTO, ONTARIO--(Marketwire - Dec. 29, 2008) -
The Combined Company will have:
- Initial Production of Approximately 45,000 Ounces of Gold per Year Increasing to 130,000 Ounces of Gold per Year Following Completion of the Orosi Mill Installation in 2009; and
- Approximately US$20.0 Million in Cash and Cash Equivalents
- 726,700 ounces of gold in Proven and Probable Reserves, 1,114,000 ounces of gold in Measured and Indicted, and 861,200 ounces of gold in Inferred Resources
Linear Gold Corp. (TSX:LRR) ("Linear Gold") and Central Sun Mining Inc. (TSX:CSM)(NYSE ALTERNEXT US:SMC)("Central Sun" or "CSM") are pleased to announce that they have signed a letter agreement whereby Linear Gold will acquire all of the outstanding common shares of Central Sun in exchange for common shares of Linear Gold (the "Transaction"). Pursuant to the Transaction, CSM shareholders will receive 0.4 Linear Gold common shares for each CSM common share held.
Wade Dawe, President and Chief Executive Officer of Linear Gold, stated, "We believe this transaction is an attractive opportunity to acquire a portfolio of gold assets which includes the Limon Mine, currently producing approximately 45,000 ounces of gold per year, the Orosi Mine, with planned production of approximately 85,000 ounces of gold annually following a nine month construction period, and the highly prospective Mestiza-La India Property, which represents a potential high grade development opportunity for the future. Together, Linear and Central Sun plan to pursue a growth strategy focused on building an aggressive and very profitable gold producer."
Stan Bharti, the Chairman of Central Sun, commented, "We believe that the combination of Central Sun and Linear Gold will form the basis for the next intermediate gold producer. The combined company brings together gold production, potential near-term production expansion, financial resources and an experienced management team. The combined company will be well positioned to leverage continued strength in the price of gold in 2009."
