NEWS
RELEASE
Nord Resources Corporation
1 Wetmore Road, Suite 203
Tucson, Arizona 85705
Tel: (520) 292-0266 Fax: (520) 292-0268
Nord Resources enters into Cash Merger Agreement with Platinum Diversified
Mining, Inc.
Monday, October 23, 2006
SOURCE: Nord Resources
Corporation
TUCSON, Ariz., October 23, 2006
- Mr. Ronald Hirsch, Chairman of the board of Directors, announced that Nord
Resources Corporation (Other OTC:NRDS.PK
- News) has entered into
an agreement whereby Nord Resources Corporation (“Nord Resources”)
will be acquired by Platinum Diversified Mining, Inc. (“Platinum”)
in an all cash merger transaction. The merger will be subject to the approval
of the stockholders of each of Nord Resources and Platinum. Nord Resources
has agreed to call a special meeting of its stockholders for the purpose of
approving the merger and the merger agreement. Additional information regarding
this meeting of stockholders will be included in a proxy statement to be filed
by Nord Resources with the Securities and Exchange Commission (the “SEC”).
Nord Resources and Platinum have agreed to use their best efforts to complete
the merger as early as possible, and in no event later than February 15, 2007.
The merger has been approved by a special committee of independent directors
of Nord Resources who considered a fairness opinion of an independent financial
advisor in reaching their determination.
The Merger Agreement
The merger will be completed pursuant to an agreement and plan of merger dated
October 23, 2006 (the “Merger Agreement”) between Nord Resources,
Platinum, Platinum Diversified Mining USA, Inc. (“Platinum USA”),
and PDM Merger Corp. (“Merger Sub”). Merger Sub is a wholly-owned
subsidiary of Platinum USA, which in turn is a wholly-owned subsidiary of
Platinum. If the merger is completed, Merger Sub will merge with and into
Nord Resources, with Nord Resources continuing as the surviving corporation
and a wholly-owned subsidiary of Platinum USA (the “Merger”).
The aggregate merger consideration to be paid by Platinum and Platinum USA
will be calculated in accordance with the merger agreement based on the following
formula:
• the amount of $60,000,000; less
• a holdback amount of $3,000,000; less
• certain liabilities of Nord Resources as of the effective time of
the merger, including liabilities on account of Nord Resources’ corporate
debt, certain deferred payments on account of salaries, consultant fees and
severance payments and transaction expenses associated with the merger that
Platinum has not agreed to reimburse; plus
• the amount of Nord Resources’ cash on closing, plus
• certain expenses for which Platinum has agreed to reimburse Nord Resources,
including expenses associated with completing the merger transaction, subject
to specified limits, and expenses associated with the maintenance of Nord
Resources’ interest in its Coyote Springs property.
Nord Resources estimates that the per share merger consideration
will equal $1.20 per share. Nord Resources estimates that the per share net
holdback consideration will equal $0.07 per share, prior to deduction of fees
and expenses associated with the escrow arrangement for the holdback, if there
are no claims for damages made against the holdback amount.
The holdback amount of $3,000,000 will be held in trust for a holdback period
of six months. During the holdback period, the holdback amount will be available
to indemnify, defend and hold harmless Platinum from and against damages arising
from certain breaches by Nord Resources of the merger agreement and expenses
associated with Nord Resources’ options and certain other matters. Payment
of the per share net holdback consideration will be made upon expiry of the
holdback or upon resolution of all claims for damages, if there are any claims
for damages outstanding when the holdback period expires.
Platinum has paid a deposit of $500,000 upon signing of the merger agreement,
which will be held in trust pending completion of the merger.
Completion of the Merger will be subject to satisfaction or waiver (if applicable)
of a number of conditions, including:
• the merger agreement and the merger shall have been adopted by the stockholders
of Nord Resources, including approval by the majority of stockholders who attend
and are entitled to voted at the stockholders’ meeting, exclusive of the
shares held by Ronald A. Hirsch and Stephen Seymour; and
• the merger agreement and the merger will have been approved and adopted
by the shareholders of Platinum by a resolution passed by 80% or more of the
Platinum shares voted at such general meeting. In addition, new shareholders
of Platinum holding 20% or more of the issued ordinary shares of Platinum shall
not have voted against approving the merger agreement or the merger.
In addition, each party’s obligation to consummate the Merger is subject
to the accuracy of the representations and warranties of the other party and
material compliance of the other party with its covenants.
Ronald A. Hirsch, chairman of Nord Resources, and Steven Seymour, a director
of Nord Resources, have each entered into voting agreements with Platinum whereby
they have agreed to vote their shares in favor of the merger. These shares represent
approximately twenty six percent (26%) of Nord Resources’ currently outstanding
shares.
The foregoing description of the Merger and the Merger Agreement is not complete
and is qualified in its entirety by reference to the Merger Agreement. Nord
Resources plans to file a copy of the merger agreement as an exhibit to the
Current Report on Form 8-K to be filed by Nord Resources with the SEC in connection
with execution of the merger agreement.
Platinum Diversified Mining, Inc. (or Platinum)
Platinum Diversified Mining, Inc. is a Cayman Islands corporation listed on
the AIM stock market in the United Kingdom. Platinum was formed as a special
purpose acquisition corporation for the purpose of effecting one or more business
combinations with unidentified operating businesses in the metals and mining
industries. Platinum’s stated investment strategy is to invest in the
mining industry by acquiring producing assets and/ or developing assets with
near term production. Platinum was admitted to the AIM stock market on March
14, 2006 following the completion of a public flotation of units comprised of
common shares and share purchase warrants from which it derived net proceeds
of $77.9 million. Platinum intends to use the funds the proceeds from its initial
public flotation, which are currently held in trust, to enable it to complete
the merger and to pay the merger consideration to the stockholders of Nord Resources.
For information contact:
John Perry, Senior Vice President, Chief Financial Officer, Secretary and Treasurer
(520) 292-0266
Website:
www.nordresources.com
Forward-Looking Statement Disclaimer
This release contains forward-looking information within the meaning of
the Private Securities Litigation Reform Act of 1995. The forward-looking statements
in this release are based on current estimates and actual results may differ
materially due to risks associated with the fact that the consummation of the
transaction is subject to numerous closing conditions, including, among others,
(i) the approval of the transaction by Nord Resources’ stockholders, (ii)
approval of the transaction by Platinum’s shareholders, (iii) the absence
of a material adverse effect in Nord Resources’ business or operations,
as described in the merger agreement; (iv) the risk that the transaction may
not be consummated if the conditions to closing are not satisfied or waived;
(v) the risk that Platinum has certain termination rights in the definitive
merger agreement including as a result of a material adverse effect in Nord
Resources’ business or operations; (vi) other risks set forth in Nord
Resources’ most recent Form 10-KSB, Form 10-QSB and other SEC filings
which are available through EDGAR at www.sec.gov.
These are among the primary risks we foresee at the present time. Nord Resources
assumes no obligation to update the forward-looking statements.
Important Additional Information will be Filed with
the SEC
Nord Resources has agreed to file a proxy statement in connection with the
proposed Merger, which will be mailed to Nord Resources stockholders. Investors
and Nord Resources’ stockholders are urged to read carefully the proxy
statement and other relevant materials when they become available because
they will contain important information about the Merger. Investors and security
holders may obtain free copies of these documents (when they are available)
and other documents filed by Nord Resources with the SEC through the web site
maintained by the SEC at www.sec.gov. In
addition, investors and security holders may obtain free copies of the documents
filed with the SEC by Nord Resources by contacting Nord Resources directly
at 1 West Wetmore Road, Suite 203, Tucson, Arizona 85705, Attention: John
Perry, Senior Vice President, Chief Financial Officer, Secretary and Treasurer.
Nord Resources and its directors and executive officers may be deemed to be
participants in the solicitation of proxies in respect of the transactions
contemplated by the Merger Agreement. A description of any interests that
Nord Resources’ officers and directors have in the Merger will be available
in the proxy statement. Information regarding certain of these persons and
their beneficial ownership of Nord Resources common stock as of July 15, 2006
is also set forth in the Schedule 14A filed by Nord Resources on September
14, 2006 with the SEC with respect to Nord Resources’ 2006 annual stockholders
meeting. These documents are available free of charge at the SEC’s web
site at www.sec.gov or by contacting Nord
Resources directly at 1 West Wetmore Road, Suite 203, Tucson, Arizona 85705,
Attention: John Perry, Senior Vice President, Chief Financial Officer, Secretary
and Treasurer.
For information contact:
John Perry, Senior Vice President, Chief Financial Officer, Secretary and
Treasurer
(520) 292-0266