CHESAPEAKE GOLD CORP. ("CKG")
AMERICAN GOLD CAPITAL CORPORATION ("AAU")
BULLETIN TYPE: Plan of Arrangement - Change in Share type/classification or other attributes, Company Tier Reclassification, Delist
BULLETIN DATE: February 23, 2007
TSX Venture Tier 2 Companies
TSX Venture Exchange has accepted for filing documentation in connection with an Arrangement Agreement (the "Agreement") dated October 26, 2006 among Chesapeake Gold Corp. ("Chesapeake"), 0769783 B.C. Ltd ("Chesapeake Subco") and American Gold Capital Corporation ("American Gold"), as amended and restated on December 15, 2006 and amended by letter agreements dated January 31, 2007 and February 14, 2007. Pursuant to the Agreement, Chesapeake has agreed to effect a business combination with American Gold under which American Gold will become a wholly-owned subsidiary of Chesapeake. The Agreement provides that the business combination will be achieved pursuant to a statutory plan of arrangement (the "Arrangement"), pursuant to which:
(a) American Gold shareholders will be issued, for each outstanding American Gold common share ("American Gold Share"), one-half of an American Gold share purchase warrant ("American Gold Warrant"), each whole American Gold Warrant entitling the holder to acquire one additional American Gold Share for a term of five years; and
(b) American Gold will merge with Chesapeake Subco and pursuant to such merger:
(i) each outstanding American Gold Share will be exchanged for 0.29 of a Chesapeake common share and 0.029 of a Chesapeake Series 1 Class A, Series 1 Restricted Voting Share, and
(ii) each American Gold Warrant will be exchanged for 0.29 of a Chesapeake common share purchase warrant ("Chesapeake Warrant") (0.145 of a Chesapeake Warrant for each one-half of an American Gold Warrant acquired by each American Gold shareholder for each American Gold Share held.
Each Chesapeake Warrant will entitle the holder to purchase one Chesapeake share at a price of $8.00 for a term of five years.
Chesapeake and American Gold propose to close the Arrangement on Friday, February 23, 2007.
Company Tier Reclassification:
In accordance with Policy 2.5, Chesapeake has met the requirements for a Tier 1 company. Therefore, effective Friday, February 23, 2007, Chesapeake's Tier classification will change from Tier 2 to:
Classification
Tier 1
Delisting:
In conjunction with the closing of the Arrangement, American Gold has requested that its common shares be delisted. Accordingly, effective at the close of business Friday, February 23, 2007, the common shares of American Gold will be delisted from TSX Venture Exchange.
For further information on the Arrangement, including the rights and restrictions of the securities described above, please refer to the Chesapeake Filing Statement dated February 15, 2007 and the American Gold Management Information Circular dated December 15, 2006, both filed on SEDAR.
Insider / Pro Group Participation: None. Prior to the closing of the Arrangement Chesapeake was at arm's length to American Gold.
TSX-X
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