Far West Acquisition
Notice for Former Far West Mining Shareholders Electing the Cash Alternative Exchange
June 23, 2011
The cash/share ratio for the all cash alternative ("Cash Alternative") originally reported on June 17, 2011 under the arrangement with Far West Mining Ltd. ("Far West") pursuant to which Capstone has acquired all of the issued and outstanding common shares of Far West has been revised as follows:
Exchange of Far West Shares for the Cash Alternative
Far West Shareholders who elected to receive the Cash Alternative, in exchange for each Far West Share held:
Option (iii) C$9.19 in cash;
will receive C$1.089087 in cash and 1.804614 Capstone shares, rather than the C$1.10 in cash and 1.802 Capstone shares as originally reported.
For further information please contact:
Capstone Mining Corp.
Cindy Burnett, VP Investor Relations
Telephone: (604) 637-8157
Far West Shareholders - Tax Election Process
Click here for detailed tax filing instructions and assistance.
Tax Information for Far West shareholders
For summary information on the tax considerations for Canadian, U.S. and other non-resident shareholders of Far West who tendered their shares for shares of Capstone Mining Corp. ("Capstone") under the Arrangement Agreement, please refer to the Far West's Information Circular dated May 12, 2011 (pages 57 through 70 see link below).
Summary of the consideration paid by Capstone
Capstone's offer to Far West entitled shareholders to elect by June 9, 2011 to receive one of three alternatives of payment for each (1) share of Far West tendered to Capstone:
Option (i) - Full Proration Alternative: 1.825 common shares of Capstone and C$1.00 in cash
Option (ii) - Share Alternative: 2.047 common shares of Capstone and C$0.001 in cash
Option (iii) - Cash Alternative: 1.805 common shares of Capstone and C$1.089 in cash
Far West Shareholders that did not make an election were defaulted to the Full Proration Alternative as described above.
Canadian Shareholders of Far West - Potential Tax Deferred Rollover
For those shareholders that reside in Canada, please refer to the Canadian tax language on pages 57 - 60 of the Far West Information Circular that explains the income tax results of tendering stock to Capstone under the three alternatives. Page 58 of the Far West Information Circular specifically addresses the potential deferral of Canadian federal and provincial income taxes. A manual tax election form must be filed with the Canada Revenue Agency and, where applicable, with the provinces of Quebec and Alberta.
Capstone has engaged PricewaterhouseCoopers LLP (Canada) as its Agent to provide Far West shareholders with information regarding the tax election procedure, along with the necessary tax election forms, and to process such election forms on behalf of Capstone. Use the attached web link (below) to download instructions (Tax Instruction Letter) on how to prepare and submit the tax election forms to the Agent within the company-authorized 90 day preparation window by September 15, 2011. Following agreement by Capstone, the tax election forms will be returned to Far West shareholders to submit the signed election forms to the Canadian federal and provincial tax authorities by the critical filing deadlines as outlined in the Tax Instruction Letter. It is solely the responsibility of the shareholder to correctly complete and file the tax election with the federal and provincial tax authorities by the critical filing deadlines.
Click here to be transferred to the PwC Tax Election website: http://www.pwctaxelection.com
Notice to all shareholders of Far West:
All shareholders of Far West that tendered their shares for Capstone shares under the Arrangement Agreement should consult their own tax advisors regarding the income tax consequences applicable to their particular circumstances. The tax language provided in the Information Circular should be helpful in the discussions with their tax advisor.
With the exception of the execution of the election form by Capstone, compliance with the requirements for a valid tax election will be the sole responsibility of Far West shareholders making the election. Capstone will not be responsible or liable for any taxes, interest, penalties, damages or expenses resulting from the failure by anyone to provide information necessary for the election, in accordance with the procedures set out in the PwC Tax Election website, or to properly file it within the time prescribed and in the form prescribed under the Income Tax Act (Canada) (or the corresponding provisions of any applicable provincial legislation).