VANCOUVER, BRITISH COLUMBIA, Oct. 8, 2009 (Marketwire) -- Vangold Resources Ltd. ("Vangold" or the "Company") (TSX VENTURE:VAN) is pleased to announce that the board of directors of Vangold has approved a plan of arrangement (the "Arrangement") under which Vangold's shareholders will receive shares of newly formed Vanoil Energy Ltd. ("Vanoil") which will own certain oil and gas properties currently held by Vangold with the exception of Vangold's Armenian properties. 100% of the shares of IBC Advanced Alloys Corp. (the "IBC Shares") currently held by Vangold are also included in the distribution to Vangold shareholders on the terms and conditions set out below.
On completion of the Arrangement, Vangold will operate as a pure gold company through a 100% ownership of Pacific Kanon Gold Corp. ("Pacific Kanon"). Vangold currently holds 50% of Pacific Kanon's shares and will acquire the remaining 50% following completion of the Arrangement, subject to TSX Venture Exchange ("Exchange") approval. As announced in the Company's news release of August 20, 2009 with New Guinea Gold Corporation ("NGG"), Vangold will acquire all the remaining shares in Pacific Kanon plus NGG'S 20% interest in the Mt Penck property and a 50% interest in the Feni project. The consideration for this acquisition will be post-Arrangement shares of Vangold which will equal 19.9% of the shares then issued and outstanding. These shares will not participate in the distributions of Vanoil Shares, Vanoil Rights, or IBC Shares.
Under the Arrangement, Vangold shareholders will receive one unit ("Vanoil Unit") of Vanoil for every eight (pre-consolidated) shares of Vangold held; as such shares are currently constituted. Each Vanoil Unit will consist of one share of Vanoil and one right (the "Vanoil Right") to purchase an additional share of Vanoil at a price of $0.50 per share for a period of 21 days from the effective date of the Arrangement. Vangold is currently in discussion with Firebird Global Master Fund, Ltd. and Firebird Global Masterfund II, Ltd. (the "Firebird Funds") to provide a stand-by commitment to purchase Vanoil shares not otherwise purchased by holders of Vanoil Rights at expiry of the 21 day period. Gross proceeds to Vanoil from the exercise of the Rights will amount to approximately $5.36 million. The Firebird Funds currently hold 21.29% of Vangold's outstanding shares, and James Passin a principal of the Firebird Funds, is a director of the Company. The Firebird Funds also hold 32.6% of the shares of IBC Advanced Alloys Corp. ("IBC") in addition to their indirect interest in IBC through Vangold.
A meeting of Vangold shareholders to consider the Arrangement has been set for November 17, 2009 and it is anticipated that the Arrangement will become effective on November 24, 2009, at which time the Vanoil Rights will become exercisable for a 21 day period. These dates may be changed, and shareholders will be advised of any changes as well as a further definitive notice as to the effective date of the Arrangement and expiry of the Rights.
In connection with the Arrangement, an application will be made to have the Vanoil shares listed on the Exchange. Closings of the Arrangement and of the Rights Offering are subject to regulatory and Exchange approval.
