Ventana, AUX enter into support agreement, offer open until March 2

- Tuesday, February 15, 2011

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Vancouver-based Ventana Gold (TSX: VEN) and AUX Canada Acquisition have entered into a support agreement regarding the latter's increased offer to acquire all of the former's common shares it does not already own for Cdn$13.06 each, the companies said in a joint statement.

Ventana's board has unanimously recommended that shareholders accept the AUX offer, which is set to expire on March 2.

The increased offer values Ventana at some Cdn$1.542bn (US$1.559bn).

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Completion of the AUX offer will be subject to certain conditions, including that the number of common shares being tendered, combined with the shares held by AUX or its affiliates and associates, constitutes at least two-thirds of Ventana's outstanding common shares on a fully-diluted basis.

The offer is also subject to the condition that no common shares will be taken up and paid for unless at least 50% of shares held by shareholders (other than AUX and its affiliates and associates) have been deposited under the offer and not withdrawn.

Ventana has the right to respond to superior proposals from other parties and to terminate the agreement to support a superior proposal, which AUX has the right to match. The support agreement provides for the payment of a Cdn$44mn fee to AUX by Ventana under certain circumstances if the offer is not completed.

AUX was created for the purpose of making the offer and is an affiliate of 63X Master Fund, which in turn is controlled by Brazilian tycoon Eike Batista's EBX group.

The fund owns approximately 20% of Ventana's outstanding shares on a fully diluted basis.

Ventana's main asset is the La Bodega project in Colombia where a scoping study released last November estimated average annual production for the first six full years of 301,000oz gold, 1.4Moz silver and 6.9Mlb (3,130t) copper or 347,000oz of gold equivalent.

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