TORONTO, ONTARIO--(Marketwire - Oct. 4, 2011) - Virgin Metals Inc. (TSX VENTURE:VGM) announces that its Board of Directors has approved the adoption of a shareholder rights plan (Rights Plan), effective immediately, subject to acceptance by the TSX Venture Exchange.
"The Rights Plan is designed to encourage the fair treatment of all shareholders should a take-over bid be made for Virgin Metals." said Chris Frostad, President and CEO. "In light of current market conditions and the company's recent property acquisition our Board of Directors feels that such a plan is prudent".
The Rights Plan provides the board and the shareholders with more time to evaluate any unsolicited take-over bid and, if appropriate, to pursue alternatives to maximize shareholder value. The Rights Plan has not been adopted in response to any specific proposal to acquire control of Virgin Metals, and Virgin Metals is not aware of any such proposal.
The Rights Plan is effective immediately but it must be ratified by shareholders of Virgin Metals within six months. Shareholders will be asked to ratify and approve the Rights Plan at the special meeting of shareholders of Virgin Metals to be held on-November 16, 2011. The Rights Plan must be ratified by a majority of the votes cast at the meeting by independent shareholders. If the Rights Plan is not ratified at the meeting, all rights issued pursuant to the Rights Plan and the Rights Plan will terminate and be null and void and of no further force and effect.
The Rights Plan is similar to rights plans adopted by other Canadian corporations. Subject to the terms of the Rights Plan, the rights issuable under the Rights Plan will become exercisable in the event any person, together with persons related to it, acquires or announces its intention to acquire 20% or more of Virgin Metals' outstanding shares without complying with the "Permitted Bid" provisions of the Rights Plan or without approval of the Board. In that event Rights holders (other than the acquiring person and related persons) are entitled to purchase shares of Virgin Metals at one-half the prevailing market price at the time the rights become exercisable.
The Rights Plan is not intended to prevent take-over bids. Under the Rights Plan, a bid that, among other things, is made to all shareholders on identical terms and conditions and that is open for at least 60 days may constitute a "Permitted Bid".
The Rights Plan is available at www.sedar.com or on request from Virgin Metals.
About Virgin Metals
Virgin Metals is a junior exploration and development company; its projects include two copper-molybdenum porphyry properties in Sonora, northern Mexico. One of these, Los Verdes, is currently the subject of a pre-feasibility study while the other, Cuatro Hermanos, is the focus of ongoing exploration efforts.
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Contact Information:
Chris Frostad
(416) 306-0990
www.virginmetals.com