High Desert Gold Corporation announced a substantial issuer bid (the “Offer”), pursuant to which the Company will offer to purchase for cancellation a maximum of 36,000,000 common shares of the Company (”HDG Shares”) (approximately 87.7% of the currently issued and outstanding HDG Shares) at a price of Cdn.$0.27 per HDG Share. The purchase of HDG Shares will be financed from existing cash and will result in a distribution of a substantial majority of HDG’s cash. The directors and officers of HDG (holders of approximately 4.2% of the currently issued and outstanding HDG Shares) have agreed not to tender to the Offer, making the Offer effectively for 91.5% of the remaining HDG Shares.

The Offer is being made to afford HDG shareholders an opportunity to realize a cash return for all or a portion of their investment in HDG at a premium of 42.1% per HDG Share to the previously announced offer of Northern Financial Corporation dated October 30, 2008 of Cdn.$0.19 per HDG Share (the “Northern Offer”).

Since the Northern Offer was commenced on October 30, 2008, HDG has been reviewing alternatives and has been actively seeking potential superior transactions with interested parties. HDG has not yet received any sufficiently attractive superior offers and has therefore determined to provide HDG shareholders with the choice of receiving a distribution of a substantial majority of HDG’s cash in the near term.

In presenting the Offer, the HDG Board is effectively giving HDG shareholders a choice of (i) selling all or most of their equity interest in HDG, resulting in a cash return in the near term, or (ii) keeping their equity interest in HDG, resulting potentially in an increased proportionate equity interest in HDG following completion of the Offer. Assuming the Offer is completed, HDG expects to continue its business and operations as an exploration company, however, for the near term on a substantially modified basis given the resulting reduction in working capital as a result of the Offer. The Offer does not constitute, nor is it intended by HDG to be followed by, a going-private transaction.

The HDG Board, in making the decision to present the Offer to HDG shareholders, makes no recommendation to any HDG shareholder as to whether to deposit or refrain from depositing HDG Shares to this Offer. Each HDG shareholder should make his, her or its own decision whether to deposit HDG Shares to this Offer and, if so, how many HDG Shares to deposit to this Offer. Each HDG shareholder should carefully review and evaluate the Offer in order to make such decision and consult his, her or its own investment and tax advisors for assistance.

The Offer is not conditional upon any minimum number of HDG Shares being validly deposited, however, the Offer is subject to other customary conditions. HDG reserves the right to withdraw, terminate or amend the Offer unless such conditions are satisfied. If the number of HDG Shares validly deposited in response to the Offer is greater than the maximum of 36,000,000 HDG Shares, the HDG Shares deposited to the Offer shall be taken up on a pro rata basis, disregarding fractions, according to the number of HDG Shares deposited by each depositing HDG shareholder.

Full details of the Offer, including the procedure for depositing HDG Shares, and an accompanying issuer bid circular and other related documents (the “Offer Documents”) will be mailed to HDG shareholders as soon as is reasonably practicable. The Offer Documents contain important information which should be read carefully before making a decision with respect to the Offer. The Offer will remain open for acceptance for at least 35 days, unless withdrawn or extended by HDG.

The description above of the Offer is qualified in its entirety by the Offer Documents, which will be available on SEDAR at www.sedar.com under the Company’s profile.

HDG Shareholders who have deposited HDG Shares to the Northern Offer of Cdn.$0.19 will need to immediately withdraw their HDG Shares from such offer if they wish to deposit such shares to HDG’s Offer of Cdn.$0.27.

The Company also announced that Northern Financial Corporation has indicated its interest in entering the Company’s data room (the “Data Room”). In order to enter the Data Room, consistent with all other interested parties, Northern is required to execute a confidentiality agreement. At Northern’s request, the Company has agreed to remove all of the standstill provisions in the form of confidentiality agreement that has been previously executed by each interested party who has been given access to the Data Room. To ensure a level playing field among all potential parties to a superior transaction, the Company has also agreed that such standstill provisions in those previously executed confidentiality agreements are hereby waived and are no longer applicable.

The Company is a mineral exploration company that acquires and explores mineral properties, primarily gold, copper and silver, in North America. The three major properties held by HDG are the flagship Canasta Dorada gold property in Sonora, Mexico, the Gold Lake porphyry copper-gold-molybdenum property in New Mexico and the Monitor copper-silver property in Arizona.

Additional information concerning HDG may be obtained on HDG’s website, www.highdesertgoldcorp.com, and on SEDAR at www.sedar.com, under HDG’s profile.

This entry was posted by Gold Mining on Saturday, November 29th, 2008 at 12:30 am and is filed under Copper, Gold, Gold Mining Companies, Mining Stock, Silver. Tags: Acquisition, Arizona, Gold Lake, High Desert Gold Corporation, Mexico, New Mexico, North America, Northern Financial Corporation, Reorganization, Sonora, United States. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.