e425
Filed by Fronteer Development Group Inc.
Pursuant to Rule 165 and Rule 425 under
the United States Securities Act of 1933, as amended
Filing Company: Fronteer Development Group Inc.
Commission File No. 001-32557
Dated: December 29, 2008
MATERIAL CHANGE REPORT
FORM 51-102F3
Section 7.1 of National Instrument 51-102
Continuous Disclosure Obligations
Fronteer Development Group Inc.
1055 West Hastings Street, Suite 1650
Vancouver, British Columbia V6E 2E9
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ITEM 2: |
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DATE OF MATERIAL CHANGE |
December 22, 2008
A news release in respect of the material change was issued by Fronteer Development
Group Inc. (Fronteer) on December 22, 2008. A copy of the news release is
attached to this report as Schedule A.
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ITEM 4: |
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SUMMARY OF MATERIAL CHANGE |
On December 22, 2008, Fronteer announced its intention to make an offer to acquire
all of the outstanding common shares (the Common Shares) of Aurora Energy
Resources Inc. (Aurora) that it does not already own (the Offer), subject to
certain terms and conditions that will be outlined in the definitive Offer
documentation. Pursuant to the Offer, Aurora shareholders will receive 0.825 of a
common share of Fronteer for each Common Share.
Fronteer also announced that certain institutional shareholders of Aurora have
entered into lock-up agreements pursuant to which they have agreed to tender an
aggregate of 19,234,700 Common Shares to the proposed Offer, representing
approximately 26% of the issued and outstanding Common Shares.
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ITEM 5: |
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FULL DESCRIPTION OF MATERIAL CHANGE |
On December 22, 2008, Fronteer announced its intention to make an Offer to acquire
all of the outstanding Common Shares of Aurora that it does not already own.
Pursuant to the Offer, Aurora shareholders will receive 0.825 of a common share of
Fronteer for each Common Share. The Offer represents a premium of approximately
166% over the December 19, 2008 closing price of the Common Shares of $0.97, based
on a closing price of $3.13 per Fronteer common share on the Toronto Stock Exchange
(TSX) on that same date, the last trading day prior to the announcement. The
Offer also represents a premium of approximately 96% based on the volume weighted
average trading prices of Fronteer and Aurora on the TSX for the 20 trading days
ended December 19, 2008.
Fronteer owns and controls 30,947,336 Common Shares, representing approximately 42%
of the outstanding Common Shares. Fronteer also announced that certain
institutional shareholders of Aurora have entered into lock-up agreements pursuant
to which they have agreed to tender an aggregate of 19,234,700 Common Shares to the
proposed Offer, representing approximately 26% of the issued and outstanding Common
Shares. The remaining approximately 32% of the outstanding Common Shares are widely
held.
It is anticipated that the Offer will be made by way of a formal offer and take-over
bid circular to be mailed to all Aurora shareholders no later than January 30, 2009.
The Offer will be subject to certain terms and conditions that will be outlined in
the definitive Offer documentation.
For further details, please see the news release attached as Schedule A hereto.
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ITEM 6: |
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RELIANCE ON SUBSECTION 7.1(2) OF NATIONAL INSTRUMENT 51-102 |
Not applicable.
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ITEM 7: |
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OMITTED INFORMATION |
Not applicable.
ITEM 8: EXECUTIVE OFFICER
The following executive officer of Fronteer is knowledgeable about the material
change and this report:
Sean Tetzlaff
Chief Financial Officer and Corporate Secretary
604-632-4677
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ITEM 9: DATE OF REPORT
DATED at Vancouver, British Columbia this 29th day of December, 2008.
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by |
(signed) Sean Tetzlaff
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Sean Tetzlaff |
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Chief Financial Officer & Corporate Secretary |
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Schedule A
FRONTEER ANNOUNCES INTENTION
TO ACQUIRE
AURORA ENERGY RESOURCES INC.
VANCOUVER, December 22, 2008 Fronteer Development Group Inc. (Fronteer or the Company) (FRG
TSX/NYSE-A) announced today that it intends to make an offer to acquire all of the outstanding
common shares (Common Shares) of Aurora Energy Resources Inc. (Aurora) that it does not already
own (the Offer).
Pursuant to the Offer, Aurora shareholders will receive 0.825 of a Fronteer common share for each
Common Share. The Offer represents a premium of approximately 166% over the December 19, 2008
closing price of the Common Shares of $0.97, based on a closing price of $3.13 per Fronteer common
share on the Toronto Stock Exchange (TSX) on that same date, the last trading day prior to the
announcement. The Offer also represents a premium of approximately 96% based on the volume
weighted average trading prices of Fronteer and Aurora on the TSX for the 20 trading days ended
December 19, 2008.
Fronteer owns and controls 30,947,336 Common Shares, representing approximately 42% of the
outstanding Common Shares, making it Auroras single largest shareholder. Certain institutional
shareholders of Aurora have entered into lock-up agreements pursuant to which they have agreed to
tender an aggregate of 19,234,700 Common Shares to the proposed Offer, representing approximately
26% of the issued and outstanding Common Shares. The remaining approximately 32% of the
outstanding Common Shares are widely held.
The acquisition of Aurora would provide the following benefits to Fronteer shareholders:
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Strengthens Fronteers balance sheet by combining Fronteers approximate $81 million
current cash and cash equivalents balance with Auroras approximate $105 million current
cash and cash equivalents balance, for a total of $186 million, thereby increasing the
amount of cash per share from approximately $0.97 per Fronteer share to approximately $1.57
per Fronteer share, following the transaction. |
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Eliminates the need for Fronteer to seek equity financing or incur debt to further
explore or develop its projects. |
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Increases capacity for growth through further M&A activity. |
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Simplifies ownership of one of the worlds largest undeveloped uranium projects, the
Michelin Project in the Central Mineral Belt of coastal Labrador. |
In addition to the significant premium, the Offer would provide the following benefits to Aurora
shareholders:
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Continued exposure to uranium, but with added exposure to Fronteers portfolio of gold
and gold-copper assets and a higher growth profile within an expanded international
setting. |
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Diversified mineral exposure beyond Auroras single asset that is subject to a
three-year uranium mining moratorium, currently restricting further development (other than
exploration) in the near term. |
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If the Offer is completed, based on Fronteers and Auroras current cash (and
equivalents) positions, provides an improved cash per share position of approximately $1.57
per share in the combined company, compared with Auroras current $1.43 per share. |
Fronteer is an exploration and development company committed to discovering and advancing deposits
with strong production potential. Fronteers vision is to advance a robust pipeline of projects
stretching from exploration through to production. The Company has an interest in several major
gold and copper-gold projects throughout Nevada, USA and northwest Turkey. Among its large
portfolio of precious metal mineral rights in Nevada, the Companys key projects include a 100%
interest in Northumberland, one of the largest undeveloped Carlin-style gold deposits in the state;
a 51% interest in Long Canyon as part of a joint venture with AuEx Ventures Inc., a discovery
defining an entirely new gold trend in the Eastern Great Basin; and Sandman, a property in which
Newmont Mining Corporation has the option to acquire up to a 60% interest by advancing the project
to a production decision by 2011. In Turkey, as part of a joint venture with Teck Cominco Ltd.,
Fronteer has built and retained a 40% interest in a new mineral district that includes two gold
deposits and a third copper-gold porphyry deposit.
Fronteer has no debt and is not invested in any short-term commercial paper or asset-backed
securities. Fronteer has approximately $81 million in cash and cash equivalents held with large
Canadian commercial banks. Further information about Fronteer may be found in its continuous
disclosure documents filed with Canadian securities regulators and the United States Securities and
Exchange Commission at www.sedar.com and www.sec.gov, respectively.
It is anticipated that the Offer will be made by way of a formal offer and take-over bid circular
to be mailed to all Aurora shareholders no later than January 30, 2009. The Offer will be subject
to certain conditions that will be outlined in the definitive Offer documentation. This press
release does not constitute an offer for or solicitation of Common Shares in any jurisdiction. Any
such solicitation would be made only by formal offer and take-over bid circular and only in those
jurisdictions where Fronteer may legally do so.
Fronteer has been advised that a special committee of Aurora has been established and that the
special committee will respond to Fronteers Offer in a timely manner.
RBC Capital Markets is acting as financial advisor to Fronteer. Davies Ward Phillips & Vineberg
LLP is acting as legal counsel to Fronteer.
FURTHER INFORMATION
For further information about Fronteer, please visit www.fronteergroup.com or contact:
Mark ODea, Ph.D, P.Geo, President & Chief Executive Officer
Richard Moritz, Director, Investor Relations
Glen Edwards, Director, Communications
Phone 604-632-4677 or Toll Free 1-877-632-4677
info@fronteergroup.com
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U.S. Shareholders
This press release does not constitute an offer to purchase or sell or a solicitation of an offer
to sell or purchase shares of Aurora or Fronteer made to any person in the United States of
America, its possessions and other areas subject to its jurisdiction or to, or for the account or
benefit of, a U.S. person (as defined in Regulation S under the United States Securities Act of
1933, as amended). The Offer will be made to these persons solely under the registration
statement, offer to purchase, prospectus and other offer documents that Fronteer expects to file
with the United States Securities and Exchange Commission. U.S. investors and security holders are
advised to read these documents carefully when they become available, because they will include
important information regarding the Offer. At that time, investors and stockholders may obtain a
free copy of the offer to purchase, prospectus, the related letter of transmittal and certain other
Offer documents from the Securities and Exchange Commissions website at www.sec.gov. Free
copies of these documents can also be obtained by directing a request to Fronteer. YOU SHOULD READ
THE OFFER TO PURCHASE, PROSPECTUS AND OTHER OFFER DOCUMENTS CAREFULLY BEFORE MAKING A DECISION
CONCERNING THE OFFER.
Except for the statements of historical fact contained herein, certain information presented
constitutes forward-looking statements. Such forward-looking statements include, without
limitation, those with respect to potential expansion of mineralization, plans for exploration and
development, potential future production, exploration budgets and timing of expenditures and
community relations activities and any statement that may predict, forecast, indicate or imply
future plans, intentions, levels of activity, results, performance or achievements, and involve
known and unknown risks, uncertainties and other factors which may cause the actual plans,
intentions, activities, results, performance or achievements of Fronteer to be materially different
from any future plans, intentions, activities, results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among others, risks related to
the actual results of current exploration activities, changes in government legislation, changes in
ownership interest in a project, conclusions of economic evaluations, changes in project parameters
as plans continue to be refined, future prices of gold, copper, silver and uranium, environmental
risks and hazards, increased infrastructure and/or operating costs, labor and employment matters,
international operations and joint ventures, estimation of reserves and resources, government
regulation and permitting matters, the satisfaction of conditions to any Offer, the occurrence of
any event, change or other circumstance that could give rise to the termination of the lock-up
agreements relating to the proposed transaction, ability to obtain all necessary regulatory
approvals, a delay in the consummation of the proposed transaction or the failure to complete the
proposed transaction for any other reason, the amount of costs, fees and expenses related to the
proposed transaction, the anticipated benefits to Aurora and Fronteer shareholders and other
expected or anticipated benefits of the proposed acquisition, as well as those factors discussed in
the section entitled Risk Factors in Fronteers Annual Information Form and Fronteers latest
Form 40-F on file with the Canadian securities regulators and the U.S Securities and Exchange
Commission. Although Fronteer has attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause Fronteers plans, results,
performance or achievements not to be as anticipated, estimated or intended. There can be no
assurance that such statements will prove to be accurate as actual results and future events could
differ materially from those anticipated in such statements. Fronteer disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Accordingly, readers should not place undue reliance on
forward-looking statements.