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Severstal Acquires 100% of Crew Gold

01/13/2011 - OAO Severstal subsidiary Nord Gold N.V. has acquired all common shares of Crew Gold Corp. that it did not already own. With this transaction, Severstal now has full control over Crew Gold.

OAO Severstal subsidiary Nord Gold N.V. has acquired through a subsidiary all common shares of Crew Gold Corp. that it did not already own at a price of US$4.65 (CAD$4.62) per Common Share pursuant to a plan of arrangement under the laws of the Yukon Territory.
 
Nord Gold acquired a total of 7,077,313 common shares in the deal, which represent ownership and control of approximately 6.62% of the issued and outstanding Common Shares.
 
Following the transaction Severstal will have ownership and control over 106,922,322 common shares, representing 100% of the issued and outstanding Crew Gold’s common shares. The acquisition occurred under a statutory plan of arrangement that took effect as of January 7, 2011.
 
The additional acquisition of Common Shares was performed to complete Severstal’s acquisition of Crew Gold. Severstal controlled Crew Gold prior to this purchase and will continue to do so.
 
Severstal began its acquisition of Crew Gold shares at the beginning of 2010, after Crew Gold had undertaken a restructuring in response to financial difficulties. In June 2010, Severstal became a controlling shareholder; after acquiring a 43.21% stake from Endeavour Financial Corp., Severstal became a 93.38% shareholder. With this transaction, Severstal now has full control over Crew Gold.
 
“We are very pleased to fully integrate Crew Gold into our gold segment having assumed full control of its shares,” commented Nikolai Zelenski, CEO of Nord Gold. “This will enable us to continue and escalate ongoing investment into this asset, with a focus on improvements to its operational and financial efficiency. Crew Gold is a very significant part of our growing gold mining business and one which I believe will deliver real value to shareholders as well as make a contribution to the development of the local territory and Guinea as a whole.”
 
Nord Gold (previously Severstal Gold) includes all Severstal’s gold mining assets and is an established international, pure-gold producer focused on emerging markets with currently eight producing mines, two development projects, five advanced exploration projects and a broad portfolio of early exploration projects and licenses located across West Africa in Guinea and Burkina Faso, Kazakhstan and the Russian Federation.
 
Crew Gold operates the LEFA Gold Mine in Guinea with 2009 gold production of 177,623 oz and gold production of 138,081 oz in the three quarters ended September 30, 2010.