Eldorado poised to acquire Afcan

Vancouver — The proposed acquisition of Afcan Mining (AFK-T) by Eldorado Gold (ELD-T) is expected to close in mid-September. The transaction will broaden Eldorado’s exposure beyond Turkey and Brazil, and create one of the leading gold companies in China.

Afcan’s main asset is an 85% interest in the advanced Tanjianshan project in western China’s Qinghai province. A recent feasibility study estimates the deposit has a proven and probable reserve of 6 million tonnes grading 4.9 grams gold per tonne, or about 944,000 oz. Engineering studies are under way for a mine capable of producing 150,000 oz. annually over a life of eight years starting in early 2007. As well, numerous exploration targets and anomalies will be tested.

Eldorado recently completed its due-diligence review, enabling it to acquire all the outstanding shares of Afcan, and Afcan’s independent directors recommended that its board approve the transaction. As a result, both companies signed a definitive agreement whereby Afcan shareholders will received one share of Eldorado for every 6.5 shares of Afcan.

Afcan shareholders will vote on the proposal at a meeting on Sept. 8. If approved, the transaction will close Sept. 16, pending regulatory and other approvals.

Eldorado will issue 20.4 million of its shares as part of the transaction, which will result in the company’s having 296.9 million shares outstanding at closing. Eldorado will also issue one warrant for every 6.5 outstanding Afcan warrants.

Eldorado notes that the Afcan acquisition will expand its production profile to about 600,000 oz. annually by 2008, without further equity dilution.

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