Copper Canyon Resources Ltd. has received the notice of extension dated February 23, 2011 (“Notice of Extension”) from NovaGold Resources Inc. (“NovaGold”) extending its hostile takeover bid for all of the outstanding Copper Canyon shares (the “NovaGold Offer”) until 5:00 p.m. Eastern Time on March 8, 2011. The Board of Directors of the Company (the “Board”) has reviewed the Notice of Extension and is disappointed that NovaGold has not increased the offer price for Copper Canyon shares. The Board believes that the NovaGold Offer substantially undervalues the Copper Canyon shares for the reasons the Board indicated in the Board’s directors’ circular (the “Directors’ Circular”) filed and mailed to Copper Canyon shareholders on February 2, 2011.
NovaGold’s Failure to Honour the Right of First Refusal
The Notice of Extension refers to correspondence between legal counsel for Copper Canyon and NovaGold pertaining to the Company’s right of first refusal relating to the Copper Canyon property. NovaGold has disclosed in the NovaGold Offer and in its previous public disclosure documents that it holds its interest in the Copper Canyon property in trust for the Galore Creek Partnership, a 50/50 partnership between NovaGold and Teck Resources Limited.
Copper Canyon has, through its legal counsel, twice requested that NovaGold provide documentation relating to the transfer of NovaGold’s beneficial interest in the Copper Canyon property to the Galore Creek Partnership and is still awaiting receipt of those documents. The Board is of the view that this transfer may have triggered the Company’s right of first refusal relating to the Copper Canyon property, giving the Company the right to acquire NovaGold’s 60% interest in the Copper Canyon property at a price equal to the amount that the Galore Creek Partnership agreed to pay for such interest. Copper Canyon intends to vigorously enforce its rights.
Shareholders Rights Plan
On February 23, 2011, NovaGold made an application to the British Columbia Securities Commission (“BCSC”) requesting that the BCSC promptly hold a hearing to consider cease trading of Copper Canyon’s shareholders rights plan (the “Plan”). The BCSC is scheduled to hear this application on March 4, 2011. Copper Canyon intends to contest this application, as the Board is of the opinion that the Plan is necessary to provide time while Copper Canyon enforces its rights under the right of first refusal, clarifies the full extent of its ownership of the Copper Canyon property and seeks alternative offers.
The Board Reaffirms its Recommendation that Shareholders REJECT the NovaGold Offer
The Board continues to reaffirm its unanimous recommendation that Copper Canyon shareholders REJECT the NovaGold Offer, and NOT TENDER their shares to the NovaGold Offer. Further details on the Board’s recommendation are contained in the Directors’ Circular, which has been filed on the SEDAR website at www.sedar.com.
How to WITHDRAW Copper Canyon Shares from the NovaGold Offer
Copper Canyon shareholders who have deposited Copper Canyon shares under the NovaGold Offer are urged to withdraw those Copper Canyon shares. Please see the Directors’ Circular for instructions with respect to withdrawing your Copper Canyon shares or, for additional information or assistance, please contact Mike Labach at 1 866 HUNT-ORE (486-8673).
The Board intends to communicate further with Copper Canyon shareholders prior to the expiry of the NovaGold Offer as and when material matters should arise.