Eldorado Gold makes offer for Frontier Pacific

2008-04-21 07:18 ET - News Release

See News Release (C-ELD) Eldorado Gold Corp

Mr. Paul Wright of Eldorado reports

ELDORADO ANNOUNCES OFFER FOR FRONTIER PACIFIC MINING CORPORATION

Eldorado Gold Corp. intends to make an offer to acquire all of the outstanding shares of Frontier Pacific Mining Corp. Frontier Pacific owns the Perama Hill gold project in northeastern Greece. This acquisition will accelerate Eldorado's growth strategy and strengthen its competitive position in southeastern Europe. The proposed transaction is valued at approximately $148-million (or $157-million on a fully diluted basis).

Frontier Pacific shareholders will receive 0.122 of an Eldorado common share for every common share of Frontier Pacific. Based on the closing prices of both companies on Friday, April 18, 2008, the transaction values each Frontier Pacific share at 90 cents and represents a premium of 28.6 per cent to Frontier Pacific shareholders.

"I am confident of the value that this combination can deliver to both Frontier Pacific and Eldorado shareholders. Perama Hill will contribute significantly to our growth strategy in the Aegean region," said Paul Wright, Eldorado's president and chief executive officer. "Frontier Pacific shareholders will receive a significant premium offer for their shares, and immediate exposure to our high-quality operating mines and growth projects. Eldorado brings a dedicated team with a proven track record of successfully permitting, developing and operating mines and possesses the financial and technical strength to ensure the timely and effective development of the Perama Hill gold project."

Eldorado has engaged in various discussions with Frontier Pacific over the past several years and on April 18, 2008, Eldorado made a further proposal to Frontier Pacific that contemplates a friendly transaction. Eldorado's consistent belief has been that a combination of our two companies represents the most strategic and complimentary opportunity for Frontier Pacific to advance its Perama Hill gold project, benefit the communities in the vicinity of the project in northeastern Greece, and capitalize on other opportunities within the Aegean region. In the event that a consensual transaction cannot be reached, which is clearly Eldorado's desire, Eldorado will take its proposal directly to Frontier Pacific's shareholders by commencing a takeover bid to acquire 100 per cent of the outstanding shares of Frontier Pacific.

Lock-up of Frontier Pacific's largest shareholder

Eldorado has executed a lock-up agreement with Frontier Pacific's largest shareholder Dundee Precious Metals Inc., under which Dundee has agreed to tender 41,942,800 shares, or approximately 25.5 per cent of Frontier Pacific's outstanding common shares, pursuant to the proposed take-over bid of Frontier Pacific by Eldorado.

For Frontier Pacific shareholders, the offer represents:

• A substantial premium offer of 90 cents per Frontier Pacific common share. The offer represents a premium of 28.6 per cent based on the closing prices of both companies' shares on the Toronto Stock Exchange and TSX Venture Exchange on April 18, 2008, and a premium of 35.5 per cent based on the 10-day volume-weighted average share prices of both companies on the TSX and TSX-V;
• Significantly enhanced liquidity for Frontier Pacific's shareholders in the form of Eldorado shares;
• Elimination of the existing "market overhang" from Frontier Pacific's largest shareholder;
• Participation in a high-quality, high-growth gold producer, with low-cost operating assets and a significant market presence and analytical endorsement;
• Elimination of existing "single project" risk through exposure to Eldorado's portfolio of high-quality producing mines and near-term development projects;
• An opportunity to enhance and accelerate development of the Perama Hill gold project through a dedicated Eldorado team with a proven track record of successfully permitting, developing and operating mines;
• The availability of financial and technical resources to manage the Perama Hill gold project through the inevitable challenges associated with mine development, construction and operations;
• The financial platform and flexibility to bring the Perama Hill gold project into production with no additional dilution to Frontier Pacific's current shareholders;
• Increased financial strength, immediate cash flow from current gold production and improved access to capital;
• The opportunity for operational and administrative synergies between Eldorado's gold projects in Turkey and Frontier's Perama Hill gold project in neighbouring Greece.

Additional details of the offer

Full details of the offer will be included in a formal offer and the takeover bid circular to be filed with securities regulatory authorities and mailed to Frontier Pacific shareholders. Eldorado will request a shareholders' list from Frontier Pacific today, and expects to mail the offer and takeover bid circular to Frontier Pacific shareholders as soon as practical upon receipt of this list. The offer will be open for acceptance for at least 35 days following the commencement of the offer. The offer will be subject to certain conditions, including receipt of all necessary regulatory clearances, including clearances in Greece, absence of material adverse changes and acceptance of the offer by Frontier Pacific shareholders owning not less than 66-2/3 per cent of the Frontier Pacific common shares on a fully diluted basis. Once the 66-2/3 per cent per acceptance level is met, Eldorado intends, but is not required to, take steps to acquire all of the outstanding Frontier Pacific common shares.

This press release does not constitute an offer to buy or an invitation to sell, or the solicitation of an offer to buy or invitation to sell, any of the securities of Eldorado or Frontier Pacific. Such an offer may only be made pursuant to an offer and takeover bid circular filed with the securities regulatory authorities in Canada.

Eldorado's financial adviser is Macquarie Capital Markets Canada Ltd. Its legal advisors are Borden Ladner Gervais LLP in Canada and Dorsey & Whitney LLP in the United States.

If such an offer is commenced, Eldorado will also file with the United States Securities and Exchange Commission (SEC) a registration statement, which will include the offer and takeover bid circular and prospectus relating to the Frontier Pacific offer. Eldorado urges investors and securityholders to read the registration statement, the offer and takeover bid circular and any other relevant documents to be filed with the sec and canadian securities regulatory authorities, because they will contain important information. Investors may obtain a free copy of the offer and takeover bid circular when they become available and other documents filed by Eldorado with the Canadian securities regulators and with the SEC at the SEC's website. The offer and takeover bid circular and other documents may also be obtained for free, once they have been mailed, from Eldorado's website or by directing a request to Eldorado's investor relations department by telephone at 1-888-353-8166, fax 604-687-4026 or e-mail [email protected], or by contacting the information agent, Kingsdale Shareholder Services Inc., toll-free at 1-866-581-1513.

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