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Abstract
Fronteer and NewWest have entered into a mutual confidentiality agreement pursuant to which NewWest has granted to Fronteer a 30 day exclusivity period in which to complete due diligence and pursuant to which NewWest has agreed not to solicit other proposals. Fronteer and the Significant Shareholder have also entered into an exclusivity agreement pursuant to which the Significant Shareholder has agreed not to solicit other proposals for a 30 day period. The Lock-Up Agreement permits the Significant Shareholder to tender its NewWest common shares to a superior transaction in certain circumstances and subject to certain conditions, including offering Fronteer an opportunity to match any such proposal and the payment by the Significant Shareholder of a termination fee to Fronteer in the amount of C$5.6 million.
Fronteer's obligation to proceed with the Proposed Transaction is subject to a number of conditions including Fronteer being satisfied, in its sole and absolute discretion, with its due diligence investigations. The Significant Shareholder can terminate the Lock-Up Agreement in certain circumstances, including if Fronteer has not made an offer to all holders of NewWest common shares by August 17, 2007. Under the Proposed Transaction, the exchange ratio of 0.26 common shares of Fronteer for each issued share of NewWest represents a value of approximately C$3.20 per share based upon the closing price of Fronteer on the TSX on June 28, 2007. This represents a premium of 36.17% to the closing price of NewWest's shares on the TSX on June 28, 2007 and 37.93% based on the 20 day volume weighted average trading price of NewWest's common shares on the TSX.