As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 9/03/13  Teranga Gold Corp                 F-80/A      9/03/13    3:1.3M                                   Merrill Corp/New/FA

Document/Exhibit                   Description                      Pages   Size 

 1: F-80/A      Pre-Effective Amendment to Registration Statement   HTML    903K 
                          of a Canadian Issuer for Securities to                 
                          be Issued in an Exchange Offer or                      
                          Business Combination                                   
 2: EX-2.5      Plan of Acquisition, Reorganization, Arrangement,   HTML     23K 
                          Liquidation or Succession                              
 3: EX-5.9      Opinion re: Legality                                HTML      8K 

 

PART I

 

INFORMATION REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS

 

Item 1.                                                         Home Jurisdiction Documents

 

Offer to Purchase and Circular*

Letter of Acceptance and Transmittal*

Notice of Guaranteed Delivery*

Letter to Shareholders of Oromin Explorations Ltd., dated July 26, 2013**

Notice of Change, Variation and Extension to the Offer to Purchase and Circular**

Revised Letter of Transmittal**

Revised Notice of Guaranteed Delivery**

Oromin Notice of Special Meeting and Management Proxy Circular

Oromin Letter of Transmittal (Proxy Circular)

 

Item 2.                                                         Informational Legends

 

See “NOTICE TO OROMIN SHAREHOLDERS IN THE UNITED STATES” in the Offer to Purchase and Circular*. Also see the Notice of Change, Variation and Extension Variation to the Offer to Purchase and Circular** and the Oromin Notice of Special Meeting and Management Proxy Circular.

 

Item 3.                                                         Incorporation Of Certain Information By Reference

 

See “Documents Incorporated by Reference” in the Offer to Purchase and Circular* and the list of exhibits included in Part II hereof.   As required by this Item, the Offer to Purchase and Circular*the Notice of Change, Variation and Extension to the Offer to Purchase and Circular**, and the Oromin Notice of Special Meeting and Management Proxy Circular provide that copies of the documents incorporated by reference may be obtained on request without charge from the Vice President, Investor & Stakeholder Relations of Teranga Gold Corporation, 121 King Street West, Suite 2600 Toronto, ON, Canada M5H 3T9 at +1 416-594-0000.

 

Item 4.                                                         List Of Documents Filed With The Commission

 

See “Documents Filed With the SEC” in the Offer to Purchase and Circular*, the Notice of Change, Variation and Extension to the Offer to Purchase and Circular** and the Oromin Notice of Special Meeting and Management Proxy Circular.

 

*	Previously filed with the Registration Statement filed with the SEC on June 20, 2013.
**	Previously filed with the Registration Statement filed with the SEC on July 26, 2013.

 

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August 30, 2013

 

Dear Shareholder:

 

On behalf of the board of directors (the “Board”), we would like to invite you to attend a special meeting (the “Meeting”) of shareholders (the “Shareholders”) of Oromin Explorations Ltd. (“Oromin” or “the Company”), to be held at the Main Boardroom of the offices of Stikeman Elliott LLP at 199 Bay Street, 53rd floor, Toronto, Ontario, on October 2, 2013 at 9:30 a.m., Toronto time, for the purposes set forth in the accompanying notice of meeting (“Notice”), and at any adjournment or postponement thereof.  References to “we”, “us” or “our” are references to Oromin or the Company, as applicable.

 

The Meeting has been called to provide Shareholders with the opportunity to vote on those matters described in the accompanying Notice and management proxy circular (“Circular”), including approving a court-approved plan of arrangement (the “Arrangement”), to be carried out pursuant to an arrangement agreement (the “Arrangement Agreement”) between the Company and Teranga Gold Corporation (“Teranga”).

 

Pursuant to an offer made by Teranga, dated June 19, 2013, as varied and extended by a notice of change, variation and extension dated July 26, 2013 (the “Offer”) to acquire all of the issued and outstanding common shares of Oromin (“Common Shares”) not already owned by it, Teranga acquired 81,076,401 Common Shares, representing approximately 59.02% of the outstanding Common Shares (on a non-diluted basis). The Common Shares taken up by Teranga under the Offer, together with the 18,699,500 Common Shares owned by Teranga prior to the expiry of the Offer, represent 99,775,901 Common Shares or approximately 72.63% of the outstanding Common Shares (on a non-diluted basis).

 

The proposed Arrangement would permit Teranga to acquire all of the Common Shares it does not currently own, with Shareholders (other than any dissenting Shareholders and Teranga) receiving the same consideration of 0.60 of a common share of Teranga (each full share a “Teranga Share”)  for each Common Share, as was offered under the Offer.

 

After the completion of the Arrangement on the terms set out in the Circular, Teranga expects that the Common Shares will cease to be quoted on the OTC/BB and intends to cause Oromin to be de-listed from the Toronto Stock Exchange and to cease to be a reporting issuer in each jurisdiction of Canada in which it is a reporting issuer. Teranga also intends to take such steps as are necessary to suspend Oromin’s reporting obligations under the U.S. Securities Exchange Act of 1934. It is a condition of the Arrangement that the Teranga Shares issuable pursuant to the Arrangement shall have been approved for listing on the TSX and ASX.

 

The Arrangement is subject to the approval of the Supreme Court of British Columbia (the “Court”) and satisfaction or waiver of the conditions of closing set out in the Arrangement Agreement, and in particular the approval of the proposed plan of arrangement under Part 9, Division 5 of the Business Corporations Act (British Columbia) (the “Plan of Arrangement”).  In order to proceed, and in addition to approval by the Court, a special resolution approving the Plan of Arrangement (the “Arrangement Resolution”) must be approved at the Meeting by two-thirds of the votes cast by the Shareholders, present in person or represented by proxy and a majority of the votes cast at the Meeting in person or by proxy by Shareholders in accordance with the minority approval requirements of Multilateral Instrument 61-101 -  Protection of Minority Security Holders in Special Transactions of the Canadian Securities Administrators.

 

Teranga has indicated that it shall vote all Common Shares held by it FOR the Arrangement Resolution. As a result, approval of the Arrangement at the Meeting is assured based on the current number of Common Shares outstanding.

 

The accompanying Notice and Circular provide a full description of the Arrangement and include certain additional information to assist you in considering how to vote on the Arrangement Resolution.  You are urged to read this information carefully and, if you require assistance, to consult your legal, financial, tax or other professional advisor.

 

 

Based upon their own investigations, including their consideration of the fairness opinion of Koger Valuations Inc., the Board has unanimously determined that the Arrangement is fair to the Shareholders (other than Teranga) and is in the best interests of the Company and recommend that the Shareholders vote FOR the Arrangement.

 

Your vote is important. Accompanying this Circular are several documents requiring your attention. We encourage you to complete, sign, date and return the applicable form of proxy or voting instruction form, in accordance with the instructions set out therein and in the Circular, so that your Common Shares can be voted at the Meeting in accordance with your instructions. In order to be effective, a proxy must be deposited with the Company’s registrar and transfer agent c/o Computershare Investor Services Inc. (“Computershare”), Attention: Proxy Department, 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1,  at any time before 9:30 a.m., Toronto time, on September 30, 2013, or with the Chairman of the Board on the day of the Meeting, at the Meeting or any adjournment or postponement thereof, before any vote is cast under the proxy’s authority. We also encourage registered Shareholders to complete, sign, date and return the enclosed applicable Letter of Transmittal in accordance with the instructions set out therein and in the accompanying Circular, to the Depositary, Kingsdale, to the address specified in the Letter of Transmittal, in order to receive certificates representing the Teranga Shares you will be entitled to pursuant to the Arrangement. If you have any questions regarding the deposit of your shares to the Arrangement, please contact Kingsdale by toll-free telephone in North America at 1-866-229-8651 or collect call outside North America at +1-416-867-2272, or by e-mail at contactus@kingsdaleshareholder.com

 

Subject to obtaining the approval of the Shareholders and the Court, and to satisfying certain other conditions, the Arrangement is expected to close on or about October 7, 2013.  We hope that we will have the opportunity to welcome you at the Meeting.

 

	Sincerely,
	David Savarie, Secretary

 

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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

 

NOTICE IS HEREBY GIVEN that a special meeting (the “Meeting”) of shareholders of Oromin Explorations Ltd. (“Oromin” or “the Company”), is to be held at the Main Boardroom of the offices of Stikeman Elliott LLP at 199 Bay Street, 53rd floor, Toronto, Ontario, on October 2, 2013 at 9:30 a.m., Toronto time, for the following purposes:

 

1.                                      to consider, pursuant to an interim order of the Supreme Court of British Columbia dated August 29, 2013, as the same may be amended (the “Interim Order”), and, if deemed advisable, to pass a special resolution, with or without variation (the “Arrangement Resolution”), the full text of which is set forth in Schedule B to the accompanying management proxy circular (the “Circular”), approving a plan of arrangement (“Plan of Arrangement”) implementing an arrangement (the “Arrangement”) under Part 9, Division 5 of the Business Corporations Act (British Columbia) (the “BCBCA”) involving the Company and Teranga Gold Corporation as set out in the Plan of Arrangement, all as more particularly described in the Circular;

 

2.                                      transact such other business as may properly be brought before the Meeting or any adjournment(s) or postponement(s) thereof.

 

The full text of the Plan of Arrangement and the Interim Order are attached as Schedule A and Schedule C to the Circular, respectively.

 

Your vote is important. Accompanying this Circular are several documents requiring your attention. We encourage you to complete, sign, date and return the applicable form of proxy or voting instruction form, in accordance with the instructions set out therein and in the Circular, so that your shares can be voted at the Meeting in accordance with your instructions. In the absence of such instructions, the common shares in the capital of the Company (the “Common Shares”) will be voted FOR matters identified in this notice. In order to be effective, a proxy must be deposited with the Company’s registrar and transfer agent c/o Computershare Investor Services Inc., Attention: Proxy Department, 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1 at any time before 9:30 a.m., Toronto time, on September 30, 2013, or with the Chairman of the Board on the day of the Meeting, at the Meeting or any adjournment or postponement thereof, before any vote is cast under the proxy’s authority.

 

Specific details of the matters proposed to be put before the Meeting are set forth in the Circular which accompanies this Notice.

 

The record date for determining the shareholders entitled to receive notice of and vote at the Meeting is the close of business on August 30, 2013 (the “Record Date”). Any holder of Common Shares of record at the close of business on the Record Date will be entitled to vote the Common Shares registered in such shareholder’s name on each matter to be acted upon at the Meeting.

 

If you are a non-registered or beneficial holder of Common Shares through your broker or through another intermediary, your name will not appear on the list of shareholders of the Company. If you are not a registered shareholder of the Company, in order to vote you must obtain the materials relating to the Meeting from your broker or other intermediary, complete the request for voting instructions sent by the broker or other intermediary, and follow the directions of the broker or other intermediary with respect to voting procedures.

 

If you are a registered holder of Common Shares, in order to receive the consideration for your Common Shares, you should submit the accompanying letter of transmittal, as applicable, together with the share certificates representing your Common Shares to the Depositary, Kingsdale in accordance with the instructions provided therein.  If you have any questions about depositing your shares, please contact Kingsdale by toll-free telephone in North America at 1-866-229-8651 or collect call outside North America at +1-416-867-2272, or by e-mail at contactus@kingsdaleshareholder.com.

 

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Pursuant to the Interim Order, each registered shareholder has been granted the right to dissent in respect of the Arrangement Resolution and, if the Arrangement becomes effective, to be paid the fair value of such holder’s Common Shares in accordance with Division 2 of Part 8 of the BCBCA, as modified and supplemented by the Interim Order and the Plan of Arrangement. To exercise such right, (a) a written notice of objection to the Arrangement Resolution must be received by the Company, at 2000 — 1055 West Hastings Street, Vancouver, British Columbia V6E 2E9, c/o David Savarie, Secretary, to the Company, not later than 5:00 p.m. (Toronto time) on September 30, 2013, or not less than two Business Days immediately preceding the time of any adjournment or postponement of the Meeting, (b) the shareholder must not have voted the applicable Common Shares in favour of or against the Arrangement Resolution, and (c) the shareholder must have otherwise complied with the provisions of of Division 2 of Part 8 of the BCBCA, as modified and supplemented by the Interim Order and the Plan of Arrangement. The right to dissent is described in the Circular and the texts of the Interim Order and Division 2 of Part 8 of the BCBCA are set forth in Schedule C and Schedule D, respectively, to the Circular.

 

Failure to strictly comply with the requirements set forth in Division 2 of Part 8 of the BCBCA, as modified and supplemented by the Interim Order and the Plan of Arrangement, may result in the loss of any right of dissent.

 

DATED at Toronto, Ontario, August 30, 2013.

 

	BY ORDER OF THE BOARD OF DIRECTORS
	David Savarie, Secretary

 

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or for any failure by Teranga to disclose events which may have occurred or which may affect the significance or accuracy of any such information but which are unknown to the Company.

 

No person has been authorized to give information or to make any representations in connection with the Arrangement other than those contained or incorporated by reference in this Circular and, if given or made, any such information or representations should not be relied upon in making a decision as to how to vote on the Arrangement Resolution or to be considered to have been authorized by the Company or Teranga.

 

This Circular does not constitute the solicitation of a proxy by any person in any jurisdiction in which such a solicitation is not authorized or in which the person making such a solicitation is not qualified to do so or to any person to whom it is unlawful to make such a solicitation.

 

Shareholders should not construe the contents of this Circular as legal or financial advice and should consult with their own professional advisors in considering the relevant legal or financial and other matters contained in this Circular.

 

REPORTING CURRENCY

 

On August 29, 2013, the date immediately preceding the date of this Circular, the Canadian dollar / U.S. dollar and Canadian dollar/ Australian dollar noon rates of exchange as reported by the Bank of Canada were CDN$1 = US$0.95 and CDN$1 = AUS$1.0647, respectively.  Shareholders are urged to obtain a current market quotation for the above exchange rates.  All dollar amounts and references to $ are to Canadian dollars, references to US$ are to United States dollars, and references to AUS$ are to Australian dollars.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Information has been incorporated by reference in this Circular from documents filed with the Securities Regulatory Authorities. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Vice President, Investor and Stakeholder Relations of Teranga at 121 King Street West, Suite 2600, Toronto, ON, Canada M5H 3T9 (telephone: 416-594-0000) and are also available on SEDAR at www.sedar.com.

 

The following documents of Teranga have been filed with the Securities Regulatory Authorities, and are specifically incorporated by reference into, and form an integral part of, this Circular:

 

(a)                                 the Offer to Purchase and Circular (including the documents specifically incorporated by reference therein);

 

(b)                                 the unaudited interim condensed consolidated financial statements of Teranga, dated August 6, 2013, for the three and six months ended June 30, 2013;

 

(c)                                  the management’s discussion and analysis of financial condition and results of operations of Teranga, dated August 6, 2013, for the three and six months ended June 30, 2013;

 

(d)                                 the amended and restated management information circular of Teranga, dated June 21, 2013, in respect of the annual general and special meeting of the shareholders of Teranga held on July 18, 2013; and

 

(e)                                  the material change report of Teranga dated August 7, 2013 regarding Teranga’s take up and payment for the Common Shares tendered to the Offer.

 

All documents of the type referred to in the preceding paragraph (excluding confidential material change reports) that are required to be filed by Teranga with the Securities Regulatory Authorities after the date of this Circular and prior to the Meeting, shall be deemed to be incorporated by reference into and form an integral part of this Circular. The documents incorporated or deemed incorporated by reference herein contain meaningful and

 

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SUMMARY

 

The following summarizes certain material information contained elsewhere in this Circular. This summary is not intended to be complete and is qualified in its entirety by the more detailed information appearing elsewhere in this Circular, including the documents incorporated by reference herein. You are urged to carefully read this entire Circular and the documents incorporated by reference in this Circular. All capitalized terms used in this Circular but not otherwise defined herein have the meaning set forth under “Glossary of Terms”.

 

The Meeting

 

This Meeting is to be held at the Main Boardroom of the offices of Stikeman Elliott LLP at 199 Bay Street, 53rd floor, Toronto, Ontario M5L 1B9, on October 2, 2013 at 9:30 a.m., Toronto time.  The Board has fixed August 30, 2013 as the Record Date.  Only holders of Common Shares at the close of business on the Record Date are entitled to receive notice of and vote at the Meeting.

 

The Arrangement

 

Shareholders will be asked to consider and, if thought fit, approve the special resolution attached at Schedule B to this Circular, approving the acquisition by Teranga of all of the Common Shares that it does not already own in consideration for 0.60 of a Teranga Share for each Common Share held, such consideration being the exact same consideration that was offered under the Offer. Upon completion of the Arrangement, the Company will become a wholly-owned subsidiary of Teranga.

 

Pro Forma Consolidated Capitalization Table

 

The following table sets forth the pro forma consolidated capitalization of Teranga as at June 30, 2013, before and after the completion of the Arrangement.  This table was compiled from consolidated capitalization tables of Teranga as at June 30, 2013 and Oromin as at May 31, 2013, its most recently completed quarter end.  This table should be read in conjunction with the unaudited interim consolidated condensed financial statements of Teranga for the three and six months ended June 30, 2013, including the notes thereto, and management’s discussion and analysis thereof and the other financial information contained in or incorporated by reference in this Circular.

 

(in US$000’s, unless otherwise stated)		Teranga As at June 30, 2013 Before Giving Effect to the Arrangement			Oromin(1) As at May 31, 2013			Pro Forma Adjustments			Teranga As at June 30, 2013 After Giving Effect to the Arrangement
Cash(2)		$	44,474		$	693		$	(11,033	)	$	34,134
Long-Term Debt(2)		$	82,461		$	2,553		$	(2,553	)	$	82,461
Shareholders’ Equity(3)		$	423,235		$	74,286		$	(38,069	)	$	459,452
Teranga Shares Issued (000’s) (4)		245,618			N/A			71,201			316,819

 

Notes:

(1)               The unaudited consolidated statement of financial position of Oromin has been translated from Canadian dollars (“C$”) using a USD:C$ rate of 0.9531.

(2)               Cash includes cash and cash equivalents.  The pro forma adjustments related to cash and long-term debt reflects the impact of change of control provisions.  The first reflects the repayment of Oromin’s loan to Sprott Resource Lending Partnership of $2,859, which is fully repayable upon a change of control, and is presented net of $306 of unamortized financing costs on Oromin’s statement of financial position. The second adjustment includes $2,174 related to change in control payments to consultants, senior officers and directors of Oromin. As well, the pro forma adjustment for cash reflects additional transaction costs of $6,000 in addition to $1,313 already paid by Teranga as at June 30, 2013.

(3)               The pro forma adjustments reflect the elimination of Oromin’s total shareholders’ equity of $74,286, additional expenses related to transaction costs of $4,500, and $40,717 to record the acquisition of all of Oromin shares.

(4)               The number of Teranga Shares issued after giving effect to the arrangement does not account for the exercise of Dissent Rights and rounding down of fractional Teranga Shares pursuant to the Arrangement.

 

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Required Shareholder Approvals

 

To be effective the Arrangement Resolution must be approved by not less than: (i) two-thirds (662/3%) of the votes cast by holders of Common Shares present in person or represented by proxy and entitled to vote at the Meeting; and (ii) a majority of the votes cast by “minority” holders of Common Shares as such term is defined in MI 61-101.  For the purposes of the approval by “minority” Shareholders, Teranga is permitted to vote all of the Common Shares it acquired pursuant to the Offer. Teranga has advised Oromin that all 81,076,401 of the Common Shares acquired by it pursuant to the Offer, representing approximately 68.32% of the “minority” Common Shares (on a non-diluted basis), will be voted in favour of the Arrangement Resolution. In addition to the Common Shares acquired pursuant to the Offer, Teranga owns a further 18,699,500 Common Shares, and as a result Teranga owns a total of 99,775,901 Common Shares, representing approximately 72.63% of the issued and outstanding Common Shares (on a non-diluted basis). Accordingly, Teranga has a sufficient number of Common Shares to enable each of the foregoing approvals to be obtained.

 

The Board and management of the Company believe that the proposed Arrangement is in the best interests of the Company and, accordingly, unanimously recommend based on the considerations set out below that Shareholders vote FOR the Arrangement Resolution. Unless specified in the form of proxy that the Common Shares represented shall be voted otherwise, the persons designated in the form of proxy intend to vote FOR the Arrangement Resolution.  See “The Arrangement — Required Shareholder Approvals”.

 

Reasons for the Arrangement

 

In reaching its decision to approve the Arrangement, the New Oromin Board determined that the Arrangement was in the best interests of the Company because (among other things) of the following reasons:

 

·                                          In connection with the Offer, Teranga disclosed that in the event the Compulsory Acquisition was not available, it intended to cause one or more special meetings of Shareholders to be called to consider a Subsequent Acquisition Transaction, and included a general discussion of the potential Canadian and US income tax consequences to a Shareholder who disposed of Common Shares pursuant to such a Subsequent Acquisition Transaction. The Arrangement is the Subsequent Acquisition Transaction referred to in the Offer to Purchase and Circular;

 

·                                          In exchange for among other the things, the increased consideration under the Offer, Teranga and Oromin agreed under the Support Agreement that, if Teranga takes up and pays for Common Shares pursuant to the Offer, Oromin would use reasonable commercial efforts to cause and to enable Teranga to, acquire the balance of the Common Shares, directly or indirectly, as soon as practicable after completion of the Offer, by way of Compulsory Acquisition or to the extent permitted by applicable Law, Subsequent Acquisition Transaction. Under the Support Agreement, any Compulsory Acquisition or Subsequent Acquisition Transaction was required to provide for consideration per Common Share that is the same exchange ratio and is in the same form as the consideration per Common Share offered under the Offer;

 

·                                          The Fairness Opinion received from Koger that the consideration to be paid to the Shareholders (other than Teranga) pursuant to the Arrangement is fair, from a financial point of view, to the Shareholders (other than Teranga), and the factors relied on by Koger in reaching its opinion;

 

·                                          the consideration offered per Common Share payable under the Arrangement is equal in value (for the purposes of MI 61-101) and in the same form to the consideration per Common Share under the Offer;

 

·                                          the terms of the Arrangement permit Shareholders to receive Teranga Shares and thereby indirectly participate in the development of the combined entity’s business and prospects through their ownership of Teranga Shares;

 

·                                          Teranga has a sufficient number of Common Shares to requisition a meeting of Shareholders under the BCBCA to consider a Subsequent Acquisition Transaction;

 

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·                                          Teranga has a sufficient number of Common Shares to pass the Arrangement Resolution; and

 

·                                          while the Common Shares are publicly traded, trading liquidity is limited and the Arrangement thus represents an opportunity for Shareholders, other than Teranga, to obtain greater liquidity through Teranga Shares.

 

Court Approval

 

The Arrangement requires Court approval under the BCBCA.  The court proceeding necessary to obtain that approval was commenced on August 29, 2013 by Notice of Petition to the Court.  On August 29, 2013, prior to the mailing of this Circular, the Interim Order was granted providing for the calling and holding of the Meeting and other certain procedural matters.  A copy of the Interim Order is attached as Schedule C to this Circular.

 

Subject to the approval of the Arrangement Resolution by the Shareholders at the Meeting, the hearing in respect of the Final Order is currently scheduled to take place on October 4, 2013 at 9:45 a.m. (Vancouver time) at the Court at 800 Smithe Street, Vancouver, British Columbia.  A copy of the Notice of Petition for the Final Order is attached as Schedule E to this Circular.  See “Principal Legal Matters — Court Approval of the Arrangement”.

 

Closing Conditions and Termination

 

Certain conditions to the closing of the Arrangement are set out in the Arrangement Agreement.  Assuming that the conditions to the closing of the Arrangement are satisfied or waived, the Arrangement is expected to be implemented on or about October 7, 2013.  See “The Arrangement — The Arrangement Agreement”.

 

Dissent Rights

 

The Interim Order provides that each registered Shareholder will have Dissent Rights and, if the Arrangement becomes effective, to have his, her or its Common Shares redeemed and subsequently cancelled by the Company in exchange for consideration equal to the fair value of his, her or its Common Shares immediately before the Arrangement Resolution was adopted. In order to validly dissent, any such registered Shareholder must not vote any Common Shares in respect of which Dissent Rights have been exercised in favour of or against the Arrangement Resolution, must provide the Company with written objection to the Arrangement by 5:00 p.m. (Toronto time) on September 30, 2013, or not less than two Business Days immediately preceding the time of any adjourned or postponed Meeting, and must otherwise comply with the dissent procedures provided in Division 2 of Part 8 of the BCBCA.  A non-registered Shareholder who wishes to exercise Dissent Rights must arrange for the registered Shareholder holding his, her or its Common Shares to deliver the Dissent Notice.  The written notice of objection must be received by the Company at 2000 — 1055 West Hastings Street, Vancouver, British Columbia V6E 2E9, c/o David Savarie, Secretary of the Company.  See “Dissent Rights”.

 

Comparison of Shareholders’ Rights

 

There are differences between the rights of Shareholders under the BCBCA and the rights of shareholders under the CBCA. See Section 17 “Comparison of CBCA and BCBCA” of the “Circular” in the Offer to Purchase and Circular, which in incorporated by reference herein.

 

Certain Canadian Federal Income Tax Considerations

 

In general, the exchange of Common Shares for Teranga Shares under the Arrangement will not give rise to a capital gain (or capital loss) to a Resident Shareholder unless such holder elects to report such capital gain or capital loss in its income tax return for the year in which the exchange occurs. Except where a particular Resident Shareholder chooses to recognize a capital gain (or capital loss) on the exchange of Common Shares for Teranga Shares, Resident Shareholders will be deemed to have disposed of their Common Shares for proceeds of disposition equal to the adjusted cost base of such shares immediately before the exchange and to have acquired their Teranga Shares at a cost equal to that same amount.

 

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GLOSSARY OF TERMS

 

The following glossary of terms used in this Circular, but not including the Schedules, is provided for ease of reference:

 

“Amalco” has the meaning ascribed thereto in Section 2.3(d) of the Plan of Arrangement;

 

“Arrangement” means an arrangement under Section 288 of the BCBCA on the terms and subject to the conditions set out in the Plan of Arrangement, subject to any amendments or variations to the Plan of Arrangement made in accordance with the terms of this Agreement or made at the direction of the Court in the Final Order with the prior written consent of the Company and Teranga, each acting reasonably;

 

“Arrangement Agreement” means the arrangement agreement between the Company and Teranga dated August 27, 2013, as amended August 29, 2013;

 

“Arrangement Resolution” means the special resolution approving the Plan of Arrangement to be considered at the Meeting, substantially in the form of Schedule B to this Circular;

 

“ASX” means the Australian Securities Exchange;

 

“BCBCA” means the Business Corporations Act (British Columbia), as amended, including the regulations promulgated thereunder;

 

“Bendon” means Bendon International Limited, a corporation incorporated under the laws of the British Virgin Islands;

 

“Bendon Litigation” means any litigation of any kind whatsoever commenced by Bendon against Oromin or its entities (including Sabodala Holding Limited) and/or Teranga, including the statement of claim of Bendon filed with the Ontario Superior Court of Justice on June 13, 2013 naming Oromin, Sabodala Holding Limited and Teranga as defendants;

 

“Beneficial Shareholder” has the meaning ascribed thereto under the heading “Appointment and Revocation of Proxies — Beneficial Shareholders” in this Circular;

 

“Board” or “Board of Directors” means the board of directors of the Company;

 

“Broadridge” means Broadridge Investor Communication Solutions, Inc.;

 

“Business Day” means any day of the year, other than a Saturday, Sunday or any day on which major banks are closed for business in the City of Toronto, Canada or Vancouver, British Columbia;

 

“CBCA” means the Canada Business Corporations Act;

 

“CDS” means CDS Clearing and Depository Services Inc. or its nominee, which at the date hereof is CDS & Co.;

 

“Circular” means this management proxy circular, including all schedules and exhibits thereto and any amendments or supplements thereto;

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended;

 

“Common Shares” means the common shares in the capital of the Company;

 

“Company” means Oromin Explorations Ltd. (see also “Oromin” and references to “we”, “us” or “our” are references to Oromin or the Company);

 

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“Company Options” means the outstanding options to purchase Common Shares granted under the Company Stock Option Plan;

 

“Company Stock Option Plan” means the stock option plan of the Company, dated as of July 14, 2009, as amended March 1, 2011;

 

“Compulsory Acquisition “ has the meaning ascribed thereto in Section 12 of the “Circular” included in the Offer to Purchase and Circular, “Acquisition of Oromin Shares not Deposited — Compulsory Acquisition”;

 

“Computershare” means Computershare Investor Services Inc.;

 

“Convertible Securities” means any securities of the Company that are convertible into or exchangeable or exercisable for, or existing rights to acquire, Common Shares, including any right to purchase Common Shares granted under the Option Plan or pursuant to any other arrangement;

 

“Court” means the Supreme Court of British Columbia;

 

“Demerger” means a demerger transaction occurring on November 23, 2010 pursuant to which Teranga acquired the Sabodala gold project and certain exploration properties from Mineral Deposits Limited;

 

“Depositary” or “Kingsdale” means Kingsdale Shareholder Services Inc.;

 

“Dissent Notice” means a written objection to the Arrangement Resolution received from registered Shareholders who wish to exercise their Dissent Right in respect of the Arrangement;

 

“Dissent Rights” means the rights of dissent in respect of the Arrangement described in the Plan of Arrangement;

 

“Dissenting Shareholders” means a registered holder of Common Shares who has duly exercised its Dissent Rights and has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights, but only in respect of the Common Shares in respect of which Dissent Rights are validly exercised by such holder;

 

“Effective Date” the date agreed to by the Company and Teranga in writing as the effective date of the Arrangement after all of the conditions precedent to the completion of the Arrangement as set out in the Arrangement Agreement have been satisfied or waived, and the Company and Teranga shall execute a certificate confirming the Effective Date;

 

“Effective Time” means 12:01 a.m. on the Effective Date, or such other time as the Teranga and the Company agree to in writing before the Effective Date;

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended;

 

“Fairness Opinion” means the fairness opinion of Koger Valuations Inc., dated August 27, 2013, a copy of which is attached as Schedule F to this Circular;

 

“Final Order” means the final order of the Court in a form acceptable to the Company and Teranga, each acting reasonably, approving the Arrangement, as such order may be amended by the Court (with the consent of both the Company and Teranga, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended (provided that any such amendment is acceptable to both the Company and Teranga, each acting reasonably) on appeal;

 

“Former Oromin Board” has the meaning ascribed thereto under the heading “Special Meeting Matters — Background to the Arrangement” in this Circular;

 

“Governmental Entity” means (a) any multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board,

 

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bureau or agency, domestic or foreign, (b) any subdivision, agent, commission, board, or authority of any of the foregoing, (c) any self-regulatory authority or any stock exchange, or (d) any quasi governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing;

 

“Improved Teranga Offer” has the meaning ascribed thereto under the heading “Special Meeting Matters — Background to the Arrangement” in this Circular;

 

“Initial Circular” has the meaning ascribed thereto under the heading “Special Meeting Matters — Background to the Arrangement” in this Circular;

 

“Interim Order” means the interim order of the Court in respect of the Arrangement dated August 29, 2013, a copy of which is attached as Schedule C to this Circular providing for, among other things, the calling and holding of the Meeting;

 

“Intermediary” has the meaning ascribed thereto under the heading “Appointment and Revocation of Proxies — Beneficial Shareholders” in this Circular;

 

“IPO Transaction” means the initial public offering of Teranga together with the Demerger;

 

“IRS” means the U.S. Internal Revenue Service;

 

“Koger” means Koger Valuations Inc.;

 

“Law” means, with respect to any Person, any and all applicable law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement, whether domestic or foreign, enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such Person or its business, undertaking, property or securities, and to the extent that they have the force of law, policies, guidelines, notices and protocols of any Governmental Entity, as amended;

 

“Letter of Transmittal” means the letter of transmittal sent to holders of Common Shares for use in connection with the Arrangement, as may be varied or amended as approved by Teranga;

 

“Lien” means any mortgage, charge, pledge, hypothec, security interest, prior claim, encroachments, option, right of first refusal or first offer, occupancy right, covenant, assignment, lien (statutory or otherwise), defect of title, or restriction or adverse right or claim, or other third party interest or encumbrance of any kind, in each case, whether contingent or absolute;

 

“Lock-Up Agreements” means the lock-up agreements between Teranga and each of the Locked-Up Shareholders, as amended from time to time, pursuant to which each of the Locked-Up Shareholders agreed to validly and irrevocably tender their Common Shares in valid acceptance of the Offer;

 

“Locked-Up Shareholders” means, collectively, those Shareholders that entered into the Lock-Up Agreements;

 

“Meeting” means the special meeting of Shareholders, including any adjournment or postponement of such special meeting in accordance with the terms of the Arrangement Agreement, to be called and held in accordance with the Interim Order to consider the Arrangement Resolution and for any other purpose as may be set out in the Circular;

 

“Meeting Materials” has the meaning ascribed thereto under the heading “Appointment and Revocation of Proxies — Beneficial Shareholders” in this Circular;

 

“MI 61-101” means Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions of the Canadian Securities Administrators;

 

“New Oromin Board” has the meaning ascribed thereto under the heading “Special Meeting Matters — Background to the Arrangement” in this Circular;

 

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“NewCo” means 0978876 B.C. Ltd., a wholly owned subsidiary of Oromin incorporated under the BCBCA;

 

“NI 43-101” means National Instrument 43-101 — Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators;

 

“NI 54-101” means National Instrument 54-101 — Communication with Beneficial Owners of Securities of a Reporting Issuer, as amended from time to time;

 

“NOBOs” has the meaning ascribed thereto under the heading “Appointment and Revocation of Proxies — Beneficial Shareholders” in this Circular;

 

“Non-U.S. Holder” has the meaning ascribed thereto under the heading “Tax Considerations — Certain U.S. Federal Income Tax Considerations” in this Circular;

 

“Notice of Petition” means the notice filed with the Court for the Final Order attached as Schedule E to this Circular;

 

“OBOs” has the meaning ascribed thereto under the heading “Appointment and Revocation of Proxies — Beneficial Shareholders” in this Circular;

 

“Offer” means the offer by Teranga to acquire all of the issued and outstanding Common Shares that it did not already own, pursuant to the terms and subject to the conditions set out in the Offer to Purchase and Circular;

 

“Offer to Purchase and Circular” means Teranga’s offer to purchase and circular relating to the Offer dated June 19, 2013, as varied and extended by a notice of change, variation and extension dated July 26, 2013;

 

“OJVG” has the meaning ascribed thereto under the heading “Special Meeting Matters — Background to the Arrangement” in this Circular;

 

“OJVG 43-101 Report” means the NI 43-101 technical report entitled OJVG Golouma Gold Project Updated Feasibility Study Technical Report with an effective date of January 30, 2013, prepared for OJVG and dated March 15, 2013;

 

“OJVG Golouma Gold Project” means the OJVG’s Golouma Gold Project as described in the OJVG 43-101 Report;

 

“Oromin” means Oromin Explorations Ltd., a company existing under the BCBCA (see also “Company” and references to “we”, “us” or “our” are references to Oromin or the Company);

 

“Oromin Option” means an option to purchase Common Shares granted under the Stock Option Plan;

 

“OTC/BB” means the Over the Counter Bulletin Board;

 

“Person” includes an individual, partnership, association, body corporate, joint venture, business organization, trustee, executor, administrator, legal representative, government (including any Governmental Entity) or any other entity, whether or not having legal status;

 

“Plan of Arrangement” means the plan of arrangement substantially in the form attached as Schedule A to the Arrangement Agreement, subject to any amendments or variations thereto made in accordance with the terms of the Arrangement Agreement or the Plan of Arrangement or made at the direction of the Court in the Final Order (with the consent of the Company and Teranga, each acting reasonably);

 

“Record Date” means the record date for the Meeting, which is the close of business on August 30, 2013;

 

“Required Approval” has the meaning given to it in the Arrangement Agreement;

 

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“Roll-over Stock Option Agreements” means the stock option roll-over stock agreements dated August 6, 2013 entered into between Teranga and Company Options holders;

 

“Sabodala Holding Limited” means Sabodala Holding Limited, a corporation incorporated under the laws of the British Virgin Islands, a direct wholly-owned subsidiary of Oromin;

 

“Sabodala Mining License” means Teranga’s Sabodala mining concession, which was awarded by a Presidential Decree of the Government of Senegal signed April 30, 2007, as amended and supplemented, relating to certain rights and obligations of SGO to operate the Sabodala gold mine located in south eastern Senegal, West Africa, and covering an area of approximately 33km(2);

 

“SEC” means United States Securities and Exchange Commission;

 

“Securities Regulatory Authorities” means the applicable securities commissions or similar regulatory authorities in each of the provinces and territories of Canada;

 

“SEDAR” means the System for Electronic Document Analysis and Retrieval;

 

“SGO” means Sabodala Gold Operations SA, a Senegalese company which is 90% owned by a subsidiary of Teranga, with the remaining 10% owned by the Republic of Senegal;

 

“Shareholders” mean the holders of Common Shares;

 

“Special Committee” means an independent committee of the Former Oromin Board;

 

“Stock Option Plan” means the current stock option plan of the Company, dated as of July 14, 2009, as amended March 1, 2011;

 

“Stock Option Roll-Over Agreements” means the stock option roll-over agreements entered into between holders of Options and Teranga, as contemplated by the Support Agreement;

 

“Subsequent Acquisition Transaction” has the meaning ascribed thereto in Section 12 of the “Circular” included in the Offer to Purchase and Circular, “Acquisition of Oromin Shares not Deposited — Subsequent Acquisition Transaction”;

 

“Support Agreement” means the support agreement between Teranga and Oromin dated July 22, 2013;

 

“Tax Act” means the Income Tax Act (Canada) and the regulations thereunder;

 

“Teranga” means Teranga Gold Corporation, a company existing under the CBCA;

 

“Teranga Board” means the board of directors of Teranga;

 

“Teranga Replacement Option” means a stock option to acquire Teranga Shares pursuant to the Teranga Stock Option Plan;

 

“Teranga Shares” means the common shares in the capital of Teranga;

 

“Teranga Stock Option Plan” means the Incentive Stock Option Plan of Teranga dated November 26, 2010;

 

“Thomson Reuters” means Thomson Reuters Corporation;

 

“Transfer Agent” means Computershare;

 

“TSX” means the Toronto Stock Exchange;

 

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“U.S. Holder” has the meaning ascribed thereto under the heading “Tax Considerations — Certain U.S. Federal Income Tax Considerations” in this Circular;

 

“U.S. Securities Act” means the Securities Act of 1933, as amended; and

 

“VIF” means a request for voting instructions.

 

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THE MEETING

 

This Circular is furnished in connection with the solicitation by the management of Oromin of proxies to be voted at the Meeting, to be held at the Main Boardroom of the offices of Stikeman Elliott LLP at 199 Bay Street, 53rd floor, Toronto, Ontario, M5L 1B9, on October 2, 2013 at 9:30 a.m., Toronto time, for the purposes set forth in the accompanying notice of the Meeting, and at any adjournment or postponement thereof. Except as otherwise stated, the information contained herein is given as at August 30, 2013.

 

SOLICITATION OF PROXIES

 

Cormark Securities (USA) Limited, a United States licensed broker dealer affiliated with Cormark Securities Inc., has been retained to act as soliciting agent to provide information to Shareholders in each state in which it is a licensed broker dealer in connection with the Arrangement. Cormark Securities (USA) Limited, in its capacity as United States soliciting agent, will receive reasonable and customary compensation from Teranga for services in connection with the Arrangement and will be reimbursed for certain out-of-pocket expenses. Cormark Securities (USA) Limited can be contacted at Suite 2800, 200 Bay Street, Toronto, Ontario, Canada, M5J 2J2 (Attention: Jeff Kennedy) or by telephone at 1-800-461-2275 or 416-943-6405, by email at jkennedy@cormark.com, or by facsimile at 416-943-6496. Shareholders in other U.S. states may contact the Information Agent for assistance.  In other instances, the solicitation will be made by mail and may also be supplemented by telephone or other personal contact to be made without special compensation by directors, officers and employees of the Company.  The Company will bear the cost of this solicitation.

 

APPOINTMENT AND REVOCATION OF PROXIES

 

Registered Shareholders

 

Registered Shareholders may vote their common shares by attending the Meeting in person or by completing the enclosed proxy.  Registered Shareholders should deliver their completed proxies to Computershare Investor Services Inc., Proxy Department, 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1 (by mail, telephone or internet according to the instructions on the proxy) no later than 9:30 a.m. (Toronto Time) on September 30, 2013 or not less than 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment or postponement of the Meeting.

 

The persons named in the proxy are directors of the Company and are proxyholders nominated by management.  A Shareholder has the right to appoint a person other than the nominees of management named in the enclosed instrument of proxy to represent the Shareholder at the Meeting.  To exercise this right, a Shareholder must insert the name of its nominee in the blank space provided on the enclosed proxy. A person appointed as a proxyholder need not be a shareholder of the Company.

 

A registered Shareholder may revoke a proxy by:

 

(a)                                 signing a proxy with a later date and delivering it at the place and within the time noted above;

 

(b)                                 signing and dating a written notice of revocation (in the same manner as the proxy is required to be executed, as set out in the notes to the proxy) and delivering it to the Company at 2000 — 1055 West Hastings Street, Vancouver, British Columbia, V6E 2E9, at any time up to and including the last business day preceding the day of the Meeting, or any adjournment thereof at which the proxy is to be used, or to the Chairman of the Meeting on the day of the Meeting or any adjournment thereof;

 

(c)                                  attending the Meeting or any adjournment thereof and registering with the scrutineer as a Shareholder present in person, whereupon such proxy shall be deemed to have been revoked; or

 

(d)                                 in any other manner provided by law.

 

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Beneficial Shareholders

 

The information set forth in this section is of significant importance to many Shareholders, as many Shareholders do not hold their Common Shares in the Company in their own name.  Shareholders holding their Common Shares through banks, trust companies, securities dealers or brokers, trustees or administrators of self-administered RRSP’s, RRIF’s, RESP’s and similar plans or other persons (any one of which is herein referred to as an “Intermediary”) or otherwise not in their own name (such Shareholders herein referred to as “Beneficial Shareholders”) should note that only proxies deposited by Shareholders appearing on the records maintained by the Company’s transfer agent as registered Shareholders will be recognized and allowed to vote at the Meeting.  If a Shareholder’s Common Shares are listed in an account statement provided to the Shareholder by a broker, in all likelihood those Common Shares are not registered in the Shareholder’s name and that Shareholder is a Beneficial Shareholder.  Such Common Shares are most likely registered in the name of the Shareholder’s broker or an agent of that broker.  In the United States, the vast majority of such Common Shares are registered under the name of Cede & Co. as nominee for the Depository Trust Company (which acts as depository for many U.S. brokerage firms and custodian banks), and in Canada the vast majority of such Common Shares are registered under the name of CDS & Co., the registration name for The Canadian Depository for Securities, which acts as nominee for many Canadian brokerage firms.  Common Shares held by brokers (or their agents or nominees) on behalf of a broker’s client can only be voted at the Meeting at the direction of the Beneficial Shareholder.  Without specific instructions, brokers and their agents and nominees are prohibited from voting Common Shares for the broker’s clients.  Therefore, each Beneficial Shareholder should ensure that voting instructions are communicated to the appropriate party well in advance of the Meeting.

 

Regulatory policies require Intermediaries to seek voting instructions from Beneficial Shareholders in advance of shareholder meetings.  Beneficial Shareholders have the option of not objecting to their Intermediary disclosing certain ownership information about themselves to the Company (such Beneficial Shareholders are designated as non-objecting beneficial owners, or “NOBOs”) or objecting to their Intermediary disclosing ownership information about themselves to the Company (such Beneficial Shareholders are designated as objecting beneficial owners, or “OBOs”).

 

In accordance with the requirements of NI 54-101, the Company has elected to send the notice of meeting, this Circular and a VIF, instead of a proxy (the notice of Meeting, Circular and VIF or proxy are collectively referred to as the “Meeting Materials”) directly to the NOBOs and indirectly through Intermediaries to the OBOs.  The Intermediaries (or their service companies) are responsible for forwarding the Meeting Materials to OBOs and the Company will be paying the costs associated with this.

 

Meeting Materials sent to Beneficial Shareholders are accompanied by a VIF, instead of a proxy.  By returning the VIF in accordance with the instructions noted on it, a Beneficial Shareholder is able to instruct the Intermediary (or other registered Shareholder) how to vote the Beneficial Shareholder’s Common Shares on the Beneficial Shareholder’s behalf.  For this to occur, it is important that the VIF be completed and returned in accordance with the specific instructions noted on the VIF.

 

The majority of Intermediaries now delegate responsibility for obtaining instructions from Beneficial Shareholders to Broadridge in Canada.  Broadridge typically prepares a machine-readable VIF, mails these VIFs to Beneficial Shareholders and asks Beneficial Shareholders to return the VIFs to Broadridge, usually by way of mail, the Internet or telephone.  Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of Common Shares to be represented at the Meeting by proxies for which Broadridge has solicited voting instructions.  A Beneficial Shareholder who receives a Broadridge VIF cannot use that form to vote Common Shares directly at the Meeting.  The VIF must be returned to Broadridge (or instructions respecting the voting of Common Shares must otherwise be communicated to Broadridge) well in advance of the Meeting in order to have the Common Shares voted.  If you have any questions respecting the voting of Common Shares held through an Intermediary, please contact that Intermediary for assistance.

 

In either case, the purpose of this procedure is to permit Beneficial Shareholders to direct the voting of the Common Shares which they beneficially own.  A Beneficial Shareholder receiving a VIF cannot use that form to

 

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vote Common Shares directly at the Meeting — Beneficial Shareholders should carefully follow the instructions set out in the VIF including those regarding when and where the VIF is to be delivered.  Should a Beneficial Shareholder who receives a VIF wish to attend the Meeting or have someone else attend on their behalf, the Beneficial Shareholder may request a legal proxy as set forth in the VIF, which will grant the Beneficial Shareholder or their nominee the right to attend and vote at the Meeting.

 

Only registered Shareholders have the right to revoke a proxy.  A Beneficial Shareholder who wishes to change its vote must, at least seven days before the Meeting, arrange for its Intermediary to revoke its VIF on its behalf.

 

All references to Shareholders in this Circular and the accompanying instrument of proxy and notice of Meeting are to registered Shareholders unless specifically stated otherwise.

 

The Meeting Materials are being sent to both registered and non-registered owners of the Company’s shares.  If you are a Beneficial Shareholder and the Company or its agent has sent the Meeting Materials directly to you, your name and address and information about your holdings of the Company’s securities have been obtained in accordance with applicable securities regulatory requirements from the Intermediary holding on your behalf.  By choosing to send the Meeting Materials to you directly, the Company (and not the Intermediary holding on your behalf) has assumed responsibility for (i) delivering the Meeting Materials to you and (ii) executing your proper voting instructions.  Please return your voting instructions as specified in the VIF.

 

The Company is not relying on the notice and access delivery procedures outlined in NI 54-101 to distribute copies of proxy-related materials in connection with the Meeting.

 

VOTING OF PROXIES

 

If a Shareholder specifies a choice with respect to any matter to be acted upon, the Common Shares represented by proxy will be voted or withheld from voting by the proxy holder in accordance with those instructions on any ballot that may be called for. In the absence of such instructions, such Common Shares will be voted FOR the Arrangement Resolution;

 

If any amendments or variations to such matters, or any other matters, are properly brought before the Meeting, the proxyholder, if a nominee of management, will exercise its discretion and vote on such matters in accordance with its best judgment.

 

The instrument of proxy enclosed, in the absence of any instructions in the proxy, also confers discretionary authority on any proxyholder other than the nominees of management named in the instrument of proxy with respect to the matters identified herein, amendments or variations to those matters, or any other matters which may properly be brought before the Meeting.  To enable a proxyholder to exercise its discretionary authority a Shareholder must strike out the names of the nominees of management in the enclosed instrument of proxy and insert the name of its nominee in the space provided, and not specify a choice with respect to the matters to be acted upon.  This will enable the proxyholder to exercise its discretion and vote on such matters in accordance with its best judgment.

 

At the time of printing this Circular, management of the Company is not aware that any amendments or variations to existing matters or new matters are to be presented for action at the Meeting.

 

VOTING SHARES AND PRINCIPAL HOLDERS THEREOF

 

As at August 30, 2013, 137,368,218 Common Shares were issued and outstanding, each such share entitling the holder thereof to one vote.

 

To the knowledge of the directors and executive officers of the Company, as at August 30, 2013, no Person beneficially owned, directly or indirectly, or exercised control or direction over, Common Shares carrying 10% or more of the voting rights attached to all outstanding voting Common Shares, except as follows:

 

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SPECIAL MEETING MATTERS

 

ARRANGEMENT MECHANICS

 

Letter of Transmittal

 

Included with this Circular, in the case of registered Shareholders, is the Letter of Transmittal.  In order to receive the consideration for their Common Shares, registered Shareholders must complete and sign the Letter of Transmittal and deliver it, together with certificates representing their Common Shares and the other required documents, to the Depositary in accordance with the instructions contained in the Letter of Transmittal.

 

The Letter of Transmittal contains procedural information relating to the Arrangement and should be reviewed carefully. The deposit of Common Shares pursuant to the procedures in the Letter of Transmittal will constitute a binding agreement among the depositing Shareholder, the Company and Teranga upon the terms and subject to the conditions of the Plan of Arrangement.

 

Copies of the Letter of Transmittal may be obtained by contacting the Depositary.  The Letter of Transmittal will also be available on SEDAR at www.sedar.com under the Company’s profile.

 

The Company and Teranga reserve the right to waive or not to waive any and all errors or other deficiencies in any Letter of Transmittal or other document and any such waiver or non-waiver will be binding upon the affected Shareholder.  The granting of a waiver to one or more Shareholders does not constitute a waiver for any other Shareholder.  The Company and Teranga reserve the right to demand strict compliance with the terms of the Letter of Transmittal and the Arrangement.  The method used to deliver the Letter of Transmittal and any accompanying certificates representing the Common Shares is at the option and risk of the holder surrendering them, and delivery will be deemed effective only when such documents are actually received by the Depositary.  The Company recommends that the necessary document be hand delivered to the Depositary, and a receipt obtained therefor; otherwise the use of registered mail with return receipt requested, and with proper insurance obtained, is recommended.

 

Any Shareholders whose Common Shares are registered in the name of a broker, investment dealer, bank, trust company, trustee or other nominee should contact that nominee for assistance in depositing their Common Shares and should follow the instructions of such nominee in order to deposit their Common Shares.

 

Exchange of Common Share Certificates

 

Following the later of the Effective Date and the surrender to the Depositary for cancellation of a certificate which immediately prior to the Effective Time represented outstanding Common Shares that were exchanged under the Agreement, together with a duly completed and executed Letter of Transmittal and such additional documents and instruments as the Depositary may reasonably require, the former holder of such surrendered certificate will be entitled to receive in exchange therefor, the Teranga Shares which such Shareholder has the right to receive under the Arrangement for such Common Shares, and any certificate so surrendered will forthwith be cancelled.

 

As soon as practicable following the later of the Effective Date and the date of deposit by a former holder with the Depositary of a duly completed Letter of Transmittal and the certificates representing Common Shares or other documentation as provided in the Letter of Transmittal, Teranga shall cause the Depositary to:

 

(a)                                 forward or cause to be forwarded by first class mail (postage prepaid) to the Shareholder at the address specified in the Letter of Transmittal; or

 

(b)                                 if the Letter of Transmittal does not contain an address as described in (a) above, forward or cause to be forwarded by mail (postage prepaid) to the Shareholder, forward or cause to be forwarded at the address of such holder as shown on the share register maintained by the Company as at the Effective Time,

 

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a certificate(s) representing the number of Teranga Shares issuable to such Shareholder as determined in accordance with the provisions of the Plan of Arrangement to which such Shareholder is entitled to, if any, as determined in accordance with the provisions of the Plan of Arrangement.

 

No Shareholder shall be entitled to receive any consideration with respect to the deposited Common Shares other than the certificate(s) representing the Teranga Shares to which such Shareholder is entitled as determined in accordance with the provisions of the Plan of Arrangement.

 

If you are a beneficial holder of Common Shares, please contact your broker or other Intermediary to instruct them to deposit your Common Shares to the Arrangement.  Your broker should do so prior to the date of the Meeting in order to receive your entitlement as soon as possible after closing of the Arrangement.

 

If you have any questions relating to the deposit of your Common Shares to the Arrangement, please contact the Depositary or Transfer Agent.

 

Lost Certificates

 

If any certificate representing Common Shares has been lost, stolen or destroyed, the registered holder of such Common Shares should complete the Letter of Transmittal as fully as possible and forward it, together with an affidavit regarding the loss, theft or destruction, to the Depositary. The Depositary will assist in making arrangements for the necessary affidavit (which will include a bonding requirement) for payment of the consideration in accordance with the Arrangement. Further details are set out in the Letter of Transmittal. As a condition precedent to the delivery of the consideration in exchange for Common Shares represented by certificates which have been lost, stolen or destroyed, the registered holder thereof will be required to indemnify the Company, Teranga and the Depositary against any claim that may be made against the Company or Teranga with respect to such lost, stolen or destroyed certificate.

 

Cancellation of Rights after Six Years

 

Any certificate which immediately before the Effective Date represented Common Shares and which has not been duly surrendered, with all other documents required by the Depositary, on or before the sixth anniversary of the Effective Date, will cease to represent any claim against or interest of any kind or nature in the Company, Teranga or the Depositary. On such date, all Teranga Shares to which the former holder of such certificates was entitled shall be deemed to have been surrendered to Teranga. Accordingly, persons who deposit certificates for Teranga Shares after the sixth anniversary of the Effective Date will not receive Teranga Shares, will not own any interest in Teranga, and will not be paid any cash or other compensation.

 

BACKGROUND TO THE ARRANGEMENT

 

For the purposes of this section of the Circular, the Company refers to the Board as it was constituted prior to August 7, 2013 as the “Former Oromin Board” and to the Board as it was constituted on and after August 7, 2013 is referred to as the “New Oromin Board”.

 

The proposed Arrangement represents the second step in the acquisition of the Company by Teranga. On June 3, 2013, Teranga publicly announced its intention to launch the Offer. At such time, the Offer provided for consideration of 0.582 of a Teranga Share per Common Share.

 

On June 19, 2013, prior to the formal commencement of the Offer, the Former Oromin Board met with its financial and legal advisors to review and discuss the proposed Offer, consider the circumstances and prospects of the Company in light of the proposed Offer and receive advice regarding the Former Oromin Board’s fiduciary duties.  At this time, the Former Oromin Board was also advised of potentially interested parties. This was followed by a meeting of the Special Committee at which it appointed its financial advisor and legal advisor.  The Special Committee also reviewed its mandate and received advice regarding its fiduciary duties.

 

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On August 7, 2013, in accordance with the terms of the Support Agreement the Former Oromin Board and the officers of the Company resigned and the Mr. Robert Duff Young, Mr. Shane Swinn and Mr. Jonathan Weisstub were appointed to the New Oromin Board as director nominees of Teranga.

 

On August 20, 2013 Koger was engaged to provide the Fairness Opinion.

 

On August 27, 2013, Koger delivered its Fairness Opinion to the New Oromin Board, confirming that, as of such date, subject to the analyses and assumptions set out therein, the consideration to be received by Shareholders (other than Teranga) pursuant to the Arrangement (consisting of the same amount and form of consideration options as was offered for each Common Share purchased under the Offer) is fair, from a financial point of view, to the Shareholders (other than Teranga).

 

On August 27, 2013, after the closing of the TSX, the Company issued a press release to announce the entering into of the Arrangement Agreement, the proposed Arrangement provided for therein and its proposed business strategy.

 

On August 29, 2013, the Court rendered the Interim Order and confirmed August 30, 2013 as the Record Date and October 2, 2013 as the date of the Meeting.  Also on August 29, 2013, the Company and Teranga amended the Arrangement Agreement to remove the roll-over of the Oromin Options into Teranga Options from the Plan of Arrangement as the last of the outstanding Oromin Options had been rolled over into Teranga Options pursuant to an agreement between the holder and Teranga on the day before.

 

Fairness Opinion

 

On August 22, 2013 the Company entered into an engagement letter with Koger, pursuant to which, among other things, Koger agreed to provide the New Oromin Board with its opinion as to the fairness, from a financial point of view, of the consideration to be received by Shareholders (other than Teranga) under the Arrangement.  Koger has advised the Company that Thomas A. Koger is a Chartered Accountant in good standing and a qualified Chartered Business Valuator.

 

The full text of the Fairness Opinion, which sets forth the procedures followed and the assumptions made in connection with the preparation of the opinion and the limitations and qualifications in respect thereof, is attached to this Circular as Schedule F. In preparing the Fairness Opinion, Koger relied upon, and assumed the completeness, accuracy and fair presentation of all financial and other information, data, advice, opinions, representations and other material obtained by Koger from public sources or provided to Koger by the Company, Teranga or their respective representatives.

 

The Fairness Opinion was provided solely for the exclusive use of the New Oromin Board in connection with their consideration of the Arrangement and cannot be used or relied upon for any other purpose or by any other person. The Fairness Opinion does not constitute and should not be construed as a formal valuation or appraisal of the Company or Teranga or any of their respective securities or assets, advice as to the price at which any securities of the Company may trade or a recommendation as to how any Shareholder should vote with respect to the Arrangement.

 

Neither Koger nor any of its affiliates is an insider, associate or affiliate (as those terms are defined in applicable securities legislation) of any of the Company, Teranga or their respective associates and affiliates. There are no understandings or agreements between Koger or its affiliates and any of the foregoing persons with respect to future financial advisory or financing services. However, Koger or its affiliates may in the future, in the ordinary course of business, perform such services for any such persons.

 

Recommendation of the Board

 

The New Oromin Board and management of the Company believe that the proposed Arrangement is in the best interests of the Company and, accordingly, unanimously recommend based on the considerations set out below that Shareholders vote FOR the Arrangement Resolution.  The full text of the Arrangement Resolution is set out in

 

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Schedule B to this Circular. Unless specified in a proxy that the Common Shares represented by the proxy shall be voted otherwise, the persons designated in the enclosed forms of proxy intend to vote FOR the Arrangement Resolution.

 

In reaching its decision to approve the Arrangement, the New Oromin Board determined that the Arrangement was in the best interests of the Company because (among other things) of the following reasons:

 

·                                          In connection with the Offer, Teranga disclosed that in the event the Compulsory Acquisition was not available, it intended to cause one or more special meetings of Shareholders to be called to consider a Subsequent Acquisition Transaction, and included a general discussion of the potential Canadian and US income tax consequences to a Shareholder who disposed of Common Shares pursuant to such a Subsequent Acquisition Transaction. The Arrangement is the Subsequent Acquisition Transaction referred to in the Offer to Purchase and Circular;

 

·                                          In exchange for among other the things, the increased consideration under the Offer, Teranga and Oromin agreed under the Support Agreement that, if Teranga takes up and pays for Common Shares pursuant to the Offer,  Oromin would use reasonable commercial efforts to cause and to enable Teranga to, acquire the balance of the Common Shares, directly or indirectly, as soon as practicable after completion of the Offer, by way of Compulsory Acquisition or to the extent permitted by applicable Law, Subsequent Acquisition Transaction. Under the Support Agreement, any Compulsory Acquisition or Subsequent Acquisition Transaction was required to provide for consideration per Common Share that is the same exchange ratio and is in the same form as the consideration per Common Share offered under the Offer;

 

·                                          The Fairness Opinion received from Koger that the consideration to be paid to the Shareholders (other than Teranga) pursuant to the Arrangement is fair, from a financial point of view, to the Shareholders (other than Teranga), and the factors relied on by Koger in reaching its opinion. See “Background to the Proposed Arrangement — Fairness Opinion” above;

 

·                                          the consideration offered per Common Share payable under the Arrangement is equal in value (for the purposes of MI 61-101) and in the same form to the consideration per Common Share under the Offer;

 

·                                          the terms of the Arrangement permit Shareholders to receive Teranga Shares and thereby indirectly participate in the development of the combined entity’s business and prospects through their ownership of Teranga Shares;

 

·                                          Teranga has a sufficient number of Common Shares to requisition a meeting of Shareholders under the BCBCA to consider a Subsequent Acquisition Transaction;

 

·                                          Teranga has a sufficient number of Common Shares to pass the Arrangement Resolution; and

 

·                                          while the Common Shares are publicly traded, trading liquidity is limited and the Arrangement thus represents an opportunity for Shareholders, other than Teranga, to obtain greater liquidity through Teranga Shares.

 

THE ARRANGEMENT

 

Shareholders will be asked to consider and, if thought fit, approve the special resolution attached at Schedule B to this Circular, approving the acquisition by Teranga of all of the Common Shares that it does not already own in consideration for 0.60 of a Teranga Share for each Common Share held, such consideration being the exact same consideration that was offered under the Offer. Upon completion of the Arrangement, the Company will become a wholly-owned subsidiary of Teranga.

 

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Required Shareholder Approvals

 

The Arrangement is subject to the approval of the Court and satisfaction or waiver of the conditions to closing set out in the Arrangement Agreement, and in particular the approval of the Plan of Arrangement. In addition to approval by the Court, the Arrangement Resolution must, pursuant to the Interim Order, be approved by: (i) not less than two-thirds (662/3%) of the votes cast by holders of Common Shares present in person or represented by proxy and entitled to vote at the Meeting; and (ii) a majority of the votes cast by “minority” holders of Common Shares as such term is defined in MI 61-101.

 

MI 61-101 requires that, unless exempted, in addition to any other required Shareholder approval, in order to complete a business combination, or a related party transaction, as applicable, the approval of a majority of the votes cast by “minority” holders of the affected securities be obtained. In relation to the Arrangement, the “minority” holders will be all holders of Common Shares, other than the 18,699,500 Common Shares owned by Teranga prior to the expiry of the Offer.

 

MI 61-101 also provides that the Common Shares acquired pursuant to the Offer may be treated as “minority” Common Shares and may be voted or considered voted in favour of the Arrangement if, among other things, the consideration per Common Share under the Arrangement is at least equal in value to and of the same form as the consideration per Common Share paid under the Offer.

 

Teranga has advised Oromin that all 81,076,401 of the Common Shares acquired by it pursuant to the Offer, representing approximately 68.32% of the “minority” Common Shares (on a non-diluted basis), will be voted in favour of the Arrangement Resolution. In addition to the Common Shares acquired pursuant to the Offer, Teranga owns a further 18,699,500 Common Shares, and as a result Teranga owns a total of 99,775,901 Common Shares, representing approximately 72.63% of the issued and outstanding Common Shares (on a non-diluted basis). Accordingly, Teranga has a sufficient number of Common Shares to ensure that the Arrangement Resolution is approved by: (i) not less than two-thirds (662/3%) of the votes cast by holders of Common Shares present in person or represented by proxy and entitled to vote at the Meeting; and (ii) a majority of the votes cast by “minority” holders of Common Shares in accordance with MI 61-101.

 

The Board and management of the Company believe that the proposed Arrangement is in the best interests of the Company and, accordingly, recommend that Shareholders vote FOR the Arrangement Resolution. Unless specified in a proxy that the shares represented by the proxy shall be voted otherwise, the persons designated in the enclosed forms of proxy intend to vote FOR the Arrangement Resolution.

 

Notwithstanding the approval of the Arrangement Resolution and approval by the Court, the Board reserves the right not to proceed with the Arrangement and related transactions in accordance with the Arrangement Resolution, the terms of the Arrangement Agreement and Plan of Arrangement.

 

The Arrangement Agreement

 

The Company and Teranga entered into the Arrangement Agreement on August 27, 2013.  Under the Arrangement Agreement, the parties have agreed to effect certain transactions in connection with the implementation of the Arrangement.  The Arrangement Agreement contains covenants, of and from each of the Company and Teranga, and closing conditions precedent, both mutual and with favourable conditions for the Company and Teranga.  This summary does not purport to be complete and is qualified in its entirety by reference to the Arrangement Agreement which has been attached to this Circular at Schedule A, and is available on SEDAR at www.sedar.com.

 

In the Arrangement Agreement, the Company agreed to, among other things: (a) comply with Part 9, Division 5 of the BCBCA and prepare, file and diligently pursue an application for the Interim Order; (b) prepare this Circular in consultation with Teranga; (c) convene and conduct the Meeting in accordance with the Interim Order; (d) if the Arrangement Resolution is approved at the Meeting, take all steps necessary or desirable to submit the Arrangement to the Court and diligently pursue an application for the Final Order; and (e) if the Final Order is obtained and the other Closing conditions in the Arrangement Agreement are satisfied or waived, file any documents

 

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as may be required in connection therewith under the BCBCA to give effect to the Arrangement pursuant Part 9, Division 5 of the BCBCA.

 

Mutual Conditions

 

Under the Arrangement Agreement, the obligation of the Company and Teranga to complete the Arrangement is subject to the fulfillment of the following mutual conditions, which may only be waived, by the mutual consent of the Company and Teranga:

 

·                                          the Required Approval has been obtained and the Arrangement Resolution has been approved and adopted by the Shareholders at the Meeting in accordance with the Interim Order;

 

·                                          the Interim Order and the Final Order have each been obtained on terms consistent with the Arrangement Agreement, and have not been set aside or modified in a manner unacceptable to either the Company or Teranga, each acting reasonably, on appeal or otherwise;

 

·                                          no Law is in effect that makes the consummation of the Arrangement illegal or otherwise prohibits or enjoins the Company or Teranga from consummating the Arrangement;

 

·                                          Dissent Rights have not been exercised with respect to more than 5% of the issued and outstanding Common Shares; and

 

·                                          the Teranga Shares issuable pursuant to the Arrangement and the Plan of Arrangement shall have been approved for listing on the TSX and ASX, subject only to satisfaction of customary listing conditions, and the TSX and ASX shall have consented to the terms of the transaction, if and to the extent required.

 

Conditions in Favour of the Company

 

The Company is not required to complete the Arrangement unless Teranga has fulfilled or complied in all material respects with each of its covenants contained in the Arrangement Agreement to be fulfilled or complied with by it on or prior to the Effective Time, which condition is for the exclusive benefit of the Company and may only be waived, by the Company in its sole discretion:

 

Conditions in Favour of Teranga

 

Teranga is not required to complete the Arrangement unless each of the following conditions is satisfied on or before the Effective Time, which conditions are for the exclusive benefit of Teranga and may only be waived, by Teranga in its sole discretion:

 

·                                          the Company has fulfilled or complied in all material respects with each of the covenants of the Company contained in the Arrangement Agreement to be fulfilled or complied with by it on or prior to the Effective Time; and

 

·                                          there is no action or proceeding pending or threatened by any Person (other than Teranga) in any jurisdiction that is reasonably likely to:

 

(a)                                 cease trade, enjoin, prohibit, or impose any limitations, damages or conditions on, Teranga’s ability to acquire, hold, or exercise full rights of ownership over, any Common Shares, including the right to vote the Common Shares; or

 

(b)                                 prohibit or restrict the Arrangement, or the ownership or operation by Teranga of the business or assets of Teranga, the Company or any of its Subsidiaries (as defined in the Arrangement Agreement), or compel Teranga to dispose of or hold separate any

 

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material portion of the business or assets of Teranga, the Company or any of its Subsidiaries as a result of the Arrangement.

 

Termination of the Arrangement Agreement

 

The Arrangement Agreement may be terminated prior to the Effective Time by the mutual written agreement of the Company and Teranga.

 

Timing of Effective Date

 

Pursuant to the Arrangement Agreement, the Company and Teranga have agreed to cause the Effective Date to be date upon on which all the conditions precedent to the completion of the Arrangement as set out in this Agreement have been either satisfied or waived in accordance with the Arrangement Agreement, or such other date as the Company and Teranga may agree upon in writing.

 

Terms of the Plan of Arrangement

 

The following description is qualified in its entirety by reference to the full text of the Plan of Arrangement, a copy of which is attached as a Schedule A to the Arrangement Agreement attached to this Circular.

 

Commencing at the Effective Time, except as noted below, the following shall occur and shall be deemed to occur in the following order, without any further act or formality:

 

(a)                                 all Common Shares held by Dissenting Shareholders shall be deemed to have been transferred (free and clear of all Liens) to the Company; and

 

(i)                                     such Dissenting Shareholders shall cease to be the holders of such Common Shares and cease to have any rights as Shareholders other than the right to be paid the fair value for such Common Shares;

 

(ii)                                  such Dissenting Shareholder shall cease to be a Shareholder, and the name of such Dissenting Shareholder shall be removed from the register of holders of Common Shares maintained by or on behalf of the Company; and

 

(iii)                               such transferred Common Shares will then be deemed to be redeemed and cancelled by the Company;

 

(b)                                 subject to there being no fractional Teranga Shares, each outstanding Common Share (other than those held by Dissenting Shareholders) shall be deemed to be assigned and transferred (free and clear of all Liens) to Teranga in exchange for consideration of 0.60 Teranga Shares for each Common Share;

 

(c)                                  subject to the provisions regarding no fractional Teranga Shares being issued, each Company Option which is outstanding and has not been duly exercised or rolled over under the Teranga Stock Option Plan prior to the Effective Date shall be exchanged by the holder thereof for a fully vested option to purchase from Teranga (each, a “Teranga Replacement Option”) the number of Teranga Shares (rounded down to the nearest whole share) equal to 0.60 multiplied by the number of Common Shares subject to the Company Option for which it was exchanged, at an exercise price per Teranga Share (rounded up to the nearest whole cent) equal to the exercise price per Common Share specified in the Company Option for which it was exchanged, divided by 0.60. Such Teranga Replacement Options shall not expire as a result of the optionee ceasing to be employed or engaged as a consultant, officer or director or otherwise in a service relationship with the Company, a subsidiary of the Company or any successor thereof, or as a result of termination of such relationship by the Company but such Teranga Replacement Options held by a director, officer or consultant of the Company who

 

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ceases to be a director, officer or consultant, as applicable, of the Company shall be deemed to have been amended to provide that such Teranga Replacement Option shall expire not later than the earlier of: (i) the original expiry date of the Company Option; and (ii) February 6, 2015.  Such Teranga Replacement Options shall be deemed to be issued under the Teranga Stock Option Plan, as if originally granted thereunder. Except as provided above, all terms and conditions of a Teranga Replacement Option, including the conditions to and manner of exercising, will be the same as the Company Option for which it was exchanged, and shall be governed by the terms of the applicable Company Option Plan and any certificate or option agreement previously evidencing the Company Option shall thereafter evidence and be deemed to evidence such Teranga Option;

 

(d)                                 the replacement stock options that were issued by Teranga under the Roll-over Stock Option Agreements shall be deemed to have been issued under the Teranga Stock Option Plan, in accordance with the terms of the Roll-over Stock Option Agreements, without any further action of the parties to the Roll-over Stock Option Agreements or the Company.

 

(e)                                  The Company and NewCo will merge and continue as one company (“Amalco”) with the same effect as if they had amalgamated under Section 273 of the BCBCA and with effect under Section 282 of the BCBCA; and

 

(f)                                   from and after the Effective Date, at the time of the step contemplated in Section 2.3(e):

 

(i)                                     the shares of NewCo shall be cancelled on the amalgamation without any repayment of capital in respect of such shares;

 

(ii)                                  the stated capital of the Amalco common shares will be an amount equal to the “paid-up capital”, as that term is defined in the Tax Act, attributable to the Common Shares immediately prior to the Amalgamation; and

 

(iii)                               Amalco shall have, as its notice of articles and articles, the notice of articles and articles of the Company.

 

No Fractional Common Shares

 

Pursuant to the Arrangement Agreement, no fractional shares will be issued in connection with the Arrangement and, in the event that a Shareholder would otherwise be entitled to receive a fractional Teranga Share upon completion of the Arrangement, such fraction will be rounded up (if the fractional interest is 0.5 or more) or down (if the fractional interest is less than 0.5) to the next whole number.

 

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Pro Forma Consolidated Capitalization Table

 

The following table sets forth the pro forma consolidated capitalization of Teranga as at June 30, 2013, before and after the completion of the Arrangement.  This table was compiled from consolidated capitalization tables of Teranga as at June 30, 2013 and Oromin as at May 31, 2013, its most recently completed quarter end.  This table should be read in conjunction with the unaudited interim consolidated condensed financial statements of Teranga for the three and six months ended June 30, 2013, including the notes thereto, and management’s discussion and analysis thereof and the other financial information contained in or incorporated by reference in this Circular.

 

(in US$000’s, unless otherwise stated)		Teranga As at June 30, 2013 Before Giving Effect to the Arrangement			Oromin(1) As at May 31, 2013			Pro Forma Adjustments			Teranga As at June 30, 2013 After Giving Effect to the Arrangement
Cash(2)		$	44,474		$	693		$	(11,033	)	$	34,134
Long-Term Debt(2)		$	82,461		$	2,553		$	(2,553	)	$	82,461
Shareholders’ Equity(3)		$	423,235		$	74,286		$	(38,069	)	$	459,452
Teranga Shares Issued (000’s) (4)		245,618			N/A			71,201			316,819

 

Notes:

(1)               The unaudited consolidated statement of financial position of Oromin has been translated from Canadian dollars (“C$”) using a USD:C$ rate of 0.9531.

(2)               Cash includes cash and cash equivalents.  The pro forma adjustments related to cash and long-term debt reflects the impact of change of control provisions.  The first reflects the repayment of Oromin’s loan to Sprott Resource Lending Partnership of $2,859, which is fully repayable upon a change of control, and is presented net of $306 of unamortized financing costs on Oromin’s statement of financial position. The second adjustment includes $2,174 related to change in control payments to consultants, senior officers and directors of Oromin. As well, the pro forma adjustment for cash reflects additional transaction costs of $6,000 in addition to $1,313 already paid by Teranga as at June 30, 2013.

(3)               The pro forma adjustments reflect the elimination of Oromin’s total shareholders’ equity of $74,286, additional expenses related to transaction costs of $4,500, and $40,717 to record the acquisition of all of Oromin shares.

(4)               The number of Teranga Shares issued after giving effect to the arrangement does not account for the exercise of Dissent Rights and rounding down of fractional Teranga Shares pursuant to the Arrangement.

 

Expenses

 

Each of the Company and Teranga will bear and pay its own costs, expenses and fees incurred by it in connection with the transaction contemplated by the proposed Arrangement.  The Board estimates that the expenses to be borne by the Company and Teranga in connection with the Arrangement, including legal, financial advisory, accounting, governmental fees, filing and printing costs, will be approximately $300,000.

 

Intentions of Oromin’s Directors and Officers

 

As at August 30, 2013, the current directors and officers of the Company do not beneficially own, directly or indirectly, or exercise control or direction over, any Common Shares.  Each of the directors of the Former Oromin Board and former officers of Oromin at the time of the Offer tendered their Common Shares to the Offer, which provided for the same consideration as under the Arrangement.

 

Subsequent Transactions

 

After the completion of the Arrangement on the terms set out in the Circular, Teranga expects that the Common Shares will cease to be quoted on the OTC/BB and intends to cause Oromin to be de-listed from the Toronto Stock Exchange and to cease to be a reporting issuer in each jurisdiction of Canada in which it is a reporting issuer. Teranga also intends to take such steps as are necessary to suspend Oromin’s reporting obligations under the Exchange Act. It is a condition of the Arrangement that the Teranga Shares issuable pursuant to the Arrangement shall have been approved for listing on the TSX and ASX.

 

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DISSENT RIGHTS

 

The Interim Order provides that each registered Shareholder will have Dissent Rights and, if the Arrangement becomes effective, to have his, her or its Common Shares redeemed and cancelled by the Company in exchange for consideration equal to the fair value of his, her or its Common Shares immediately before the Arrangement Resolution was adopted. In order to validly dissent, any such registered Shareholder must not vote any Common Shares in respect of which Dissent Rights have been exercised in favour of or against the Arrangement Resolution, must provide the Company with written objection to the Arrangement by 5:00 p.m. (Toronto time) on September 30, 2013, or not less than two Business Days immediately preceding the time of any adjourned or postponed Meeting, and must otherwise comply with the dissent procedures provided in Division 2 of Part 8 of the BCBCA.  A non-registered Shareholder who wishes to exercise Dissent Rights must arrange for the registered Shareholder holding his, her or its Common Shares to deliver the Dissent Notice.  The written notice of objection must be received by the Company at 2000 — 1055 West Hastings Street, Vancouver, British Columbia V6E 2E9, c/o David Savarie, Secretary of the Company.

 

Persons who are beneficial owners of Common Shares registered in the name of a broker, custodian, nominee or other intermediary who wish to dissent should be aware that only registered holders of Common Shares are entitled to dissent.  Accordingly, a beneficial owner of Common Shares desiring to exercise this right must make arrangements for the Common Shares beneficially owned by such person to be registered in his, her or its name prior to the time the Dissent Notice is required to be received by the Company or, alternatively, make arrangements for the registered Shareholder to dissent on his, her or its behalf.

 

Failure to strictly comply with the requirements set forth in Sections 237-247 of the BCBCA, as modified and supplemented by the Interim Order and the Plan of Arrangement, may result in the loss of any right of dissent. Sections 237-247 of the BCBCA are reprinted in their entirety and attached to this Circular as Schedule D.

 

PRINCIPAL LEGAL MATTERS

 

Court Approval of the Arrangement

 

The Arrangement requires Court approval under the BCBCA.  The court proceeding necessary to obtain that approval was commenced on August 29, 2013 by Notice of Petition to the Court.  On August 29, 2013, prior to the mailing of this Circular, the Interim Order was granted providing for the calling and holding of the Meeting and other certain procedural matters.  A copy of the Interim Order is attached as Schedule C to this Circular.

 

Subject to the approval of the Arrangement Resolution by the Shareholders at the Meeting, the hearing in respect of the Final Order is currently scheduled to take place on October 4, 2013 at 9:45 a.m. (Vancouver time) at the Court at 800 Smithe Street, Vancouver, British Columbia. A copy of the Notice of Petition for the Final Order is attached as Schedule E to this Circular.

 

The Board has concluded that the Arrangement, if completed, is in the best interests of the Company. However, regardless of the conclusions of the Board as to the whether the Arrangement is in the best interests of the Company, whether or not the Arrangement is fair and reasonable in accordance with applicable corporate law is a legal conclusion to be made by the Court.

 

Assuming the Final Order is granted and the other conditions to closing contained in the Arrangement Agreement are satisfied or waived to the extent legally permissible, Oromin currently expects the Effective Date will be on or about October 7, 2013.

 

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Securities Law Matters

 

Teranga is a reporting issuer in each province of Canada, other than Quebec. Teranga Shares issuable to Shareholders pursuant to the Arrangement (including those reserved for issuance upon the exercise of stock options) have been conditionally approved for listing on the TSX, subject to the filing of required documentation.  Teranga has no present intention of registering as a reporting company in the United States.

 

Issue and Resale of Securities of Teranga under Canadian Securities Law

 

The issue of Teranga securities pursuant to the Arrangement will constitute distributions of securities which are exempt from the registration and prospectus requirements of applicable Canadian securities laws. The Teranga Shares may be resold in each province and territory of Canada, provided: (i) the trade is not a “control distribution” as defined in National Instrument 45-102 - Resale of Securities; (ii) no unusual effort is made to prepare the market or create a demand for those securities; (iii) no extraordinary commission or consideration is paid in respect of that trade; and (iv) if the selling security holder is an insider or officer of Teranga (as such terms are defined in applicable Canadian securities laws), the insider or officer has no reasonable grounds to believe that Teranga is in default of applicable Canadian securities laws.

 

Resales of Teranga Shares under the U.S. Securities Act

 

The Teranga Shares issued under the Arrangement to Shareholders will be freely transferable under United States federal securities laws, except by persons who are deemed to be “affiliates” (as that term is defined under the U.S. Securities Act) of Teranga, including persons who are deemed to have been affiliates of Teranga within 90 days before the Effective Date. In the event that the Teranga Shares are in fact held by affiliates of Teranga, those holders may resell the shares (1) in accordance with the provisions of Rule 144 promulgated under the U.S. Securities Act, or (2) as otherwise permitted under the Securities Act. Rule 144 generally provides that “affiliates” of Teranga may not sell securities of Teranga received under the Arrangement unless the sale is effected in compliance with the volume, current public information, manner of sale and timing limitations set forth in such rule. These limitations generally permit sales made by an affiliate in any three-month period that do not exceed the greater of 1% of the outstanding Teranga Shares or the average weekly reported trading volume in such securities over the four calendar weeks preceding the placement of the sale order, provided that the sales are made in unsolicited, open market “broker transactions” and that current public information on Teranga is available. Persons who may be deemed to be affiliates of an issuer generally include individuals or entities that directly or indirectly control, are controlled by, or are under common control with, that issuer and may include officers and directors of the issuer as well as beneficial owners of 10% or more of any class of capital stock of the issuer.

 

Shareholders Outside of Canada and the U.S.

 

The foregoing discussion is only a general overview of the requirements of Canadian and U.S. securities legislation applicable to the issuance and resale of securities of Teranga in connection with the Arrangement.  Shareholders that reside outside of Canada or outside of the United States are urged to consult their professional advisers to determine the conditions and restrictions applicable to trades in securities of Teranga under applicable securities legislation.

 

Exemption from Formal Valuation Requirement

 

The Arrangement constitutes a “business combination” for the purposes of MI 61-101. MI 61-101 provides that, unless exempted, a corporation proposing to carry out a business combination is required to prepare a formal valuation of the affected securities (and, subject to certain exceptions, any non-cash consideration being offered therefor) and provide to the holders of the affected securities a summary of such valuation. An exemption is available under MI 61-101 from the aforementioned valuation requirement for certain second step business combinations completed no later than 120 days after the expiry of a formal take-over bid where the consideration under such transaction is at least equal in value to, and in the same form as, the consideration that tendering shareholders in the take-over bid were entitled to receive in the bid, provided that certain disclosure has been given in the take-over bid disclosure documents.  In addition, pursuant to the Offer, Teranga disclosed that in the event the

 

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In the case of a Resident Shareholder that is a corporation, dividends received or deemed to be received on Teranga Shares will be included in computing the corporation’s income and will generally be deductible in computing its taxable income.

 

A Resident Shareholder that is a ‘‘private corporation’’ or a ‘‘subject corporation’’ (as defined in the Tax Act) may be liable under Part IV of the Tax Act to pay a refundable tax of 33 1/3% on dividends received or deemed to be received on such shares to the extent that such dividends are deductible in computing the Resident Shareholder’s taxable income.

 

Taxable dividends received by individuals, other than certain trusts, may give rise to a liability for alternative minimum tax under the Tax Act.

 

Disposition of Teranga Shares

 

Generally, a Resident Shareholder who disposes or is deemed to dispose of Teranga Shares will generally realize a capital gain (or capital loss) equal to the amount, if any, by which the Resident Shareholder’s proceeds of disposition, net of any reasonable costs of disposition, exceeds (or is less than) the adjusted cost base to the Resident Shareholder of those shares immediately before the disposition. See ‘‘Taxation of Capital Gains and Capital Losses’’ below for a general description of the treatment of capital gains and capital losses under the Tax Act.

 

Taxation of Capital Gains and Capital Losses

 

One-half of any capital gain (a ‘‘taxable capital gain’’) realized by a Resident Shareholder in a taxation year must be included in computing the Resident Shareholder’s income for that taxation year. One-half of any capital loss (an ‘‘allowable capital loss’’) realized by a Resident Shareholder in a taxation year must be deducted against taxable capital gains realized by the Resident Shareholder in that taxation year, to the extent and in the circumstances specified in the Tax Act. Any excess of allowable capital losses over taxable capital gains realized in a particular taxation year may be carried back up to three taxation years and carried forward indefinitely and deducted against net taxable capital gains realized in those other years, to the extent and in the circumstances specified in the Tax Act.

 

If the Resident Shareholder is a corporation, the amount of any capital loss otherwise arising from a disposition or deemed disposition of a Common Share or Teranga Share may be reduced by the amount of dividends previously received or deemed to be have been received by the corporation on the share, to the extent and under circumstances specified in the Tax Act. Analogous rules apply to a partnership or trust of which a corporation, trust or partnership is a member or beneficiary.

 

A Resident Shareholder that is throughout the year a ‘‘Canadian-controlled private corporation’’ as defined in the Tax Act may be liable to pay an additional refundable tax of 62/3% on certain investment income, including amounts in respect of taxable capital gains.

 

Capital gains realized by individuals, other than certain trusts, may give rise to a liability for alternative minimum tax under the Tax Act.

 

Dissenting Resident Shareholders

 

A Resident Shareholder who, as a result of the exercise of Dissent Rights disposes of Common Shares to the Company in consideration for a cash payment, will be deemed to have received a dividend to the extent, if any, that the cash payment (excluding interest, if any, awarded by a court) exceeds the “paid-up capital” (as defined in the Tax Act) of the Resident Shareholder’s Common Shares. In addition, such dissenting Resident Shareholder will be considered to have disposed of such shareholder’s Common Shares for proceeds of disposition equal to the amount of the cash payment (excluding interest, if any, awarded by a court) less the amount of any deemed dividend, as noted above.  Such a disposition will give rise to a capital gain (or capital loss) equal to the amount by which such proceeds of disposition exceed (or are less than) the aggregate of such dissenting Resident Shareholder’s adjusted cost base of such Common Shares immediately before the disposition and any reasonable costs of

 

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disposition. The general tax consequences to a dissenting Resident Shareholder of realizing such a capital gain or capital loss are described above “Taxation of Capital Gains and Capital Losses”. Interest awarded by a court to a dissenting Resident Shareholder will be included in such shareholder’s income for purposes of the Tax Act.

 

Dissenting Resident Shareholders should consult their own tax advisors for specific advice with respect to the tax consequences in their own particular circumstances of exercising their Dissent Rights.

 

Eligibility for Investment

 

Teranga Shares will be qualified investments under the Tax Act for a trust governed by registered retirement savings plans (‘‘RRSP’’), registered retirement income funds (‘‘RRIF’’), registered education savings plans, registered disability savings plans, deferred profit sharing plans and tax-free savings accounts (‘‘TFSA’’), provided that, at that time, the Teranga Shares are listed on a ‘‘designated stock exchange’’ (which currently includes the TSX) or Teranga is a ‘‘public corporation’’ as defined in the Tax Act.

 

Notwithstanding that a Teranga Share may be a qualified investment for a trust governed by a TFSA, RRSP or RRIF, the holder of a TFSA or annuitant of a RRSP or RRIF, as applicable, will be subject to a penalty tax in respect of a Teranga Share held in the TFSA, RRSP or RRIF, as applicable, if such Teranga Share is a ‘‘prohibited investment’’ for the particular TFSA, RRSP or RRIF. A Teranga Share will generally not be a ‘‘prohibited investment’’ for a trust governed by a TFSA, RRSP or RRIF unless the holder of the TFSA or the annuitant under the RRSP or RRIF, as applicable, (i) does not deal at arm’s length with Teranga for purposes of the Tax Act, (ii) has a ‘‘significant interest’’ as defined in the Tax Act in Teranga, or (iii) has a ‘‘significant interest’’ as defined in the Tax Act in a corporation, partnership or trust with which Teranga does not deal at arm’s length for purposes of the Tax Act. Proposals released on December 21, 2012 (the ‘‘December 2012 Proposals’’) propose to delete the condition in (iii) above. In addition, pursuant to the December 2012 Proposals, a Teranga Share will generally not be a ‘‘prohibited investment’’ if the Teranga Share is ‘‘excluded property’’ as defined in the December 2012 Proposals for trusts governed by a TFSA, RRSP or RRIF.

 

Holders Not Resident in Canada

 

The following portion of this summary is generally applicable to a Holder who, at all relevant times, for purposes of the Tax Act (i) is neither resident nor deemed to be resident in Canada, and (ii) does not use or hold, and is not deemed to use or hold, Common Shares or Teranga Shares in a business carried on in Canada (a ‘‘Non-Resident Shareholder’’). Special rules, which are not discussed in this summary, may apply to certain Holders that are insurers carrying on an insurance business in Canada and elsewhere. Such Holders should consult their own tax advisors.

 

Exchange of Common Shares for Teranga Shares

 

A Non-Resident Shareholder who disposes of Common Shares under the Arrangement will not be subject to tax under the Tax Act on any capital gain realized on the exchange unless (i) the shares disposed of are ‘‘taxable Canadian property’’ of the Non-Resident Shareholder at the time of the exchange, and (ii) the Non-Resident Shareholder is not exempt from taxation in Canada on the disposition of such shares under the terms of an applicable income tax convention or treaty.  In the event that a Non-Resident Shareholder’s Common Shares are, or are deemed to be, ‘‘taxable Canadian property’’ and such Non-Resident Shareholder is not entitled to an exemption from taxation in Canada on the disposition of such shares under the terms of an applicable income tax convention or treaty, the disposition thereof will generally be subject to the same treatment as described above under the heading ‘‘Holders Resident in Canada — Exchange of Common Shares for Teranga Shares”. Where a Non-Resident Shareholder’s Common Shares are taxable Canadian property and the Non-Resident Shareholder does not choose to recognize a capital gain (or capital loss) on the exchange of such shares for Teranga Shares pursuant to the Offer, the Teranga Shares will be deemed to be taxable Canadian property to the Non-Resident Shareholder at any time that is within 60 months after such exchange.

 

Generally, a share that is listed on a ‘‘designated stock exchange’’ for the purposes of the Tax Act (which currently includes the TSX) will not be ‘‘taxable Canadian property’’ of a Non-Resident Shareholder unless at any

 

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Certain U.S. Federal Income Tax Considerations

 

The following discussion, subject to the limitations and conditions set forth herein, addresses certain anticipated U.S. federal income tax consequences of exchanging Common Shares for Teranga Shares pursuant to the Arrangement. This discussion is based upon the U.S. Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated under the Code, administrative rulings of the IRS and judicial decisions of the U.S. courts, in each case as in effect on the date hereof. Changes in the laws may alter the U.S. federal income tax treatment discussed in this summary, possibly with retroactive effect.

 

TO ENSURE COMPLIANCE WITH INTERNAL REVENUE SERVICE CIRCULAR 230, YOU ARE HEREBY NOTIFIED THAT ANY DISCUSSION OF U.S. FEDERAL TAX MATTERS SET FORTH HEREIN WAS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN AND WAS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED BY ANY PROSPECTIVE INVESTOR, FOR THE PURPOSE OF AVOIDING PENALTIES UNDER U.S. TAX LAW. EACH PROSPECTIVE INVESTOR SHOULD SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

 

This discussion is general in nature and does not address the effects of any state or local taxes, or the tax consequences in jurisdictions other than the United States. In addition, this discussion does not address any U.S. federal tax consequences other than U.S. federal income tax consequences, such as the estate and gift tax, the alternative minimum tax or the Medicare tax on net investment income. This discussion is only applicable to U.S. Holders (as defined below) that receive Teranga Shares in exchange for Common Shares pursuant to the Arrangement or that receive cash for Common Shares as a result of the exercise of Dissent Rights, and that hold Common Shares or Teranga Shares, as applicable, as “capital assets” (generally for investment purposes) and, in addition, does not address all U.S. federal income tax consequences that may be relevant to the particular circumstances of a holder of Common Shares or Teranga Shares, nor to a holder of Common Shares or Teranga Shares subject to special treatment under U.S. federal income tax law, including, but not limited to:

 

·                                          a person that will own 10% or more (by voting power or value, and taking into account certain attribution rules) of the issued and outstanding Teranga Shares;

 

·                                          a person that owns 5% or more (by voting power or value, taking into account certain attribution rules) of the issued and outstanding Common Shares prior to the exchange;

 

·                                          a broker, dealer or trader in securities or currencies;

 

·                                          a bank, mutual fund, life insurance company or other financial institution;

 

·                                          a tax-exempt organization;

 

·                                          a real estate investment trust or regulated investment company;

 

·                                          a qualified retirement plan or individual retirement account;

 

·                                          a person who acquired its Common Shares in a compensatory transaction;

 

·                                          a person that holds or will hold its Common Shares or Teranga Shares as part of a straddle, hedge, wash sale, synthetic security, conversion transaction, constructive sale or other integrated transaction for tax purposes;

 

·                                          a Non-U.S. Holder (as defined below) who is or has previously been engaged in the conduct of a trade or business in the U.S. or who has ceased to be a U.S. citizen or to be taxed as a U.S. resident alien; or

 

·                                          a U.S. Holder whose functional currency for tax purposes is not the U.S. dollar.

 

It is assumed for purposes of this summary that each of Teranga and the Company is not, has not at any time been and will not, after the Arrangement, be a “controlled foreign corporation”, as defined in Section 957(a) of

 

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the Code.

 

Holders of Common Shares are urged to consult their own tax advisors regarding the tax consequences of the exchange of Common Shares for Teranga Shares, and the ownership and disposition of Teranga Shares in light of their particular circumstances, as well as the tax consequences under state, local and non-United States tax law and the possible effects of changes in tax law.

 

For purposes of this discussion, a “U.S. Holder” means a beneficial owner of a Common Share or Teranga Share, as the case may be, who is, for U.S. federal income tax purposes:

 

·                                          an individual citizen or resident of the United States;

 

·                                          a corporation created or organized in or under the laws of the United States or any political subdivision thereof;

 

·                                          an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

 

·                                          a trust (X) that is subject to the primary supervision of a court within the United States and the control of one or more United States persons as described in Section 7701(a)(30) of the Code or (Y) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

 

“Non-U.S. Holder” means any person who owns Common Shares or Teranga Shares, as the case may be, and who is not a U.S. Holder or a partnership.

 

If a partnership or other “pass-through” entity holds Common Shares, the tax treatment of an owner of such “pass-through” entity generally will depend upon the status of such owner and upon the activities of the “pass-through” entity. An owner of a “pass-through” entity holding Common Shares should consult such owner’s tax advisor regarding the specific tax consequences of exchanging Common Shares pursuant to the Arrangement.

 

U.S. Holders

 

Consequences of Exchanging Common Shares for Teranga Shares Pursuant to the Arrangement

 

The U.S. federal income tax consequences of exchanging Common Shares for Teranga Shares pursuant to the Arrangement will depend on numerous factors. It is possible that the Arrangement will be considered part of a reorganization within the meaning of Section 368(a) of the Code, and that Teranga and Oromin will each be treated as a party to the reorganization. Whether or not the Arrangement will be considered part of a reorganization within the meaning of Section 368(a) of the Code is uncertain at this time, and the following discussion therefore provides a description of the U.S. federal income tax consequences of the alternative characterizations.  No ruling from the IRS or opinion of counsel has been or will be sought regarding the tax consequences of the transactions described herein, and the IRS or the courts may disagree with this discussion.

 

Tax consequences if the exchange of Common Shares for Teranga Shares pursuant to the Arrangement is part of a reorganization.

 

If the exchange of Common Shares for Teranga Shares pursuant to the Arrangement is part of a reorganization within the meaning of Section 368(a) of the Code then, subject to the discussion below relating to the possible application of the PFIC rules, the following consequences for a U.S. Holder of Common Shares will result:

 

·                                          No gain or loss will be recognized upon the receipt of Teranga Shares in the exchange.

 

·                                          The aggregate tax basis of the Teranga Shares received by a U.S. Holder of Common Shares will equal the aggregate tax basis of the Common Shares such holder surrendered in the exchange.

 

·                                          The holding period of the Teranga Shares received in the exchange will include the U.S. Holder’s holding period in the Common Shares surrendered in such exchange.

 

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Notwithstanding the foregoing, if Oromin has been a PFIC at any time since its formation, under proposed Treasury regulations, the exchange pursuant to the Arrangement will constitute a fully taxable transaction for U.S. federal income tax purposes (with the consequences of a disposition of shares in a PFIC described below) with respect to U.S. Holders of Common Shares, if any, who owned Common Shares while Oromin was a PFIC, unless either a “qualified electing fund” (“QEF”) election (described below) was made by such U.S. Holder for the first year of such holder’s holding period that Oromin was a PFIC or Teranga is also a PFIC at the time of the exchange pursuant to the Arrangement. As described below under “Passive Foreign Investment Company”, Teranga does not believe that it will be classified as a PFIC for its current taxable year. According to its most recent public filings, Oromin did not believe that it would be characterized as a PFIC for its fiscal year ended February 29, 2012 nor for its three preceding taxable years. However, no assurances can be provided regarding whether Oromin currently is or has ever been a PFIC or whether Teranga currently is or will become a PFIC.

 

Tax consequences if the exchange of Common Shares for Teranga Shares pursuant to the Arrangement is not part of a reorganization.

 

If the exchange of Common Shares for Teranga Shares pursuant to the Arrangement is not part of a reorganization within the meaning of Section 368(a) of the Code, the receipt of Teranga Shares in exchange for Common Shares pursuant to the Arrangement will be fully taxable for U.S. federal income tax purposes. In such an exchange, a U.S. Holder would recognize gain or loss equal to the difference between (i) the sum of the U.S. dollar fair market value of any Teranga Shares received and (ii) the U.S. Holder’s adjusted tax basis in the Common Shares surrendered. If Oromin is not a PFIC, any such gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder’s holding period in the Common Shares exceeds one year upon the consummation of the exchange pursuant to the Arrangement. Long-term capital gains of non-corporate U.S. Holders, including individuals, may be eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

 

If Oromin is a PFIC, unless the U.S. Holder has made a timely and proper QEF election, the amount of U.S. federal income tax on gain recognized by a U.S. Holder upon the consummation of the exchange pursuant to the Arrangement will be increased by an interest charge to compensate for tax deferral, and the amount of income tax, before the imposition of the interest charge, will be calculated as if such gain was earned ratably over the period the U.S. Holder held its Common Shares and was subject to U.S. federal income tax at the highest rate applicable to ordinary income for the relevant taxable years, regardless of the tax rate otherwise applicable to the U.S. Holder. However, if the U.S. Holder has made a timely and proper QEF election, then the PFIC rules described above will not apply and the U.S. Holder will be subject to tax on the exchange in the manner described in the immediately preceding paragraph. A U.S. Holder should consult its tax advisor regarding the application of the PFIC rules to the Arrangement.

 

Tax Consequences of a Receipt of Cash Pursuant to Dissent Rights

 

A U.S. Holder that receives cash for its Common Shares as a result of such holder’s exercise of Dissent Rights will recognize gain or loss equal to the difference between (i) the sum of the U.S. dollar value of the cash received in connection with the exercise of Dissent Rights, and (ii) the U.S. Holder’s adjusted tax basis in the Common Shares surrendered. If Oromin is not a PFIC, any such gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder’s holding period in the Common Shares exceeds one year. Long-term capital gains of non-corporate U.S. Holders, including individuals, may be eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.  Special considerations may apply to a U.S. Holder who receives foreign currency in connection with the exercise of Dissent Rights. See “Foreign Currency Considerations” below.

 

Distributions on Teranga Shares

 

Subject to the discussion under “Passive Foreign Investment Company” below, the gross amount of distributions, if any, payable on Teranga Shares, including any Canadian taxes withheld, generally will be treated as a foreign source dividend to the extent paid out of current or accumulated earnings and profits, and generally will be “passive category income” for U.S. foreign tax credit purposes. A distribution on Teranga Shares in excess of current and accumulated earnings and profits will be treated as a tax-free return of capital to the extent of the U.S.

 

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Holder’s adjusted tax basis in such shares and, to the extent in excess of adjusted basis, as capital gain. See “Sale or Other Disposition of Teranga Shares” below. There can be no assurance that Teranga will determine its earnings and profits on the basis of U.S. federal income tax principles, and U.S. Holders of Teranga Shares should assume that distributions will generally be reported to them as a “dividend” for U.S. federal income tax purposes.

 

Dividends paid to a U.S. Holder that is a corporation will not be eligible for the dividends received deduction generally available to corporations. Dividends paid by a domestic corporation or “qualified foreign corporation” to an individual U.S. Holder are subject to a maximum 20% U.S. tax rate if certain holding period requirements are met. A qualified foreign corporation generally includes a foreign corporation (other than a PFIC) if (i) its shares are readily tradable on an established securities market in the United States or (ii) it is eligible for benefits under a comprehensive U.S. income tax treaty which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information program. There is currently a tax treaty in effect between the United States and Canada which the Secretary of Treasury has determined is satisfactory for these purposes and Teranga believes it should be eligible for the benefits of the treaty. Therefore, Teranga has indicated to the Company that it believes it will be a “qualified foreign corporation” for this purpose, although there can be no assurance that it will always qualify and each U.S. Holder should consult its own tax advisor regarding the treatment of dividends received on the Teranga Shares.

 

Subject to certain limitations, a U.S. Holder generally will be entitled to a credit against its U.S. federal income tax liability for Canadian income taxes withheld by Teranga. Alternatively, a U.S. Holder may elect to claim a deduction for such Canadian income taxes in computing its U.S. federal taxable income for a taxable year provided that the election shall apply to all foreign income taxes paid or accrued by the U.S. Holder for the taxable year.  U.S. Holders that are eligible for benefits under the Canada-United States income tax treaty but who fail to provide the necessary documentation to qualify for benefits under the treaty (as discussed in “Certain Canadian Federal Income Tax Considerations”) will not be entitled to a foreign tax credit for the amount of any Canadian taxes withheld in excess of the applicable treaty rate. To the extent a U.S. Holder has claimed a reduced U.S. tax rate on dividends from a “qualified foreign corporation,” this will affect the computation of the foreign tax credit. The calculation of U.S. foreign tax credits and, in the case of a U.S. Holder that elects to deduct foreign taxes, the availability of deductions, involves the application of complex rules that depend on a U.S. Holder’s particular circumstances. U.S. Holders should, therefore, consult their own tax advisors regarding the application of the U.S. foreign tax credit rules.

 

Sale or Other Disposition of Teranga Shares

 

Subject to the discussion below under “Passive Foreign Investment Company”, a U.S. Holder who sells or otherwise disposes of Teranga Shares in a taxable disposition will recognize a gain or loss equal to the difference, if any, between the U.S. dollar value of the amount realized on such sale or other taxable disposition and the U.S. Holder’s adjusted tax basis in such shares. Any such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the holding period for the Teranga Shares is more than one year at the time of the sale or other disposition. Long-term capital gains of non-corporate U.S. Holders, including individuals, may be eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Any such gain or loss generally will be treated as U.S. source income for U.S. foreign tax credit purposes. Special considerations may apply to a U.S. Holder who receives foreign currency in connection with a sale or other taxable disposition of Teranga Shares. See “Foreign Currency Considerations” below.

 

Passive Foreign Investment Company

 

Special adverse U.S. federal income tax rules apply to U.S. persons owning shares of a PFIC.  A non-U.S. corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying the relevant look-through rules with respect to the income and assets of subsidiaries, either:

 

·                                          at least 75% of its gross income is “passive income”; or

 

·                                          at least 50% of the gross average quarterly value of its assets is attributable to assets that produce passive income or are held for the production of passive income.

 

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Canadian dollars and converts them into U.S. dollars subsequent to such day will generally have foreign exchange gain or loss based on any appreciation or depreciation in the value of the Canadian dollar against the U.S. dollar, which generally will be U.S. source ordinary gain or loss.

 

Non-U.S. Holders

 

Consequences of Exchanging Common Shares for Teranga Shares or the Receipt of Cash Pursuant to Dissent Rights

 

Non-U.S. Holders generally will not recognize gain or loss for U.S. federal income tax purposes upon the receipt of Teranga Shares in exchange for Common Shares pursuant to the Arrangement or upon the receipt of cash for its Common Shares as a result of such holder’s exercise of Dissent Rights. However, a Non-U.S. Holder may recognize gain taxable in the United States if either of the following conditions applies:

 

·                                          such gain is attributable to an office or other fixed place of business in the United States and, if an applicable income tax treaty so provides, such gain is attributable to a permanent establishment or fixed base the Non-U.S. Holder maintains in the United States; or

 

·                                          the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and certain other requirements are met.

 

Sale or Other Disposition of Teranga Shares

 

In general, a Non-U.S. Holder will not be subject to U.S. federal income tax as a result of a distribution on or any gain realized upon the sale or other disposition of Teranga Shares unless one of the two bulleted conditions apply that are described in the discussion captioned “Non-U.S. Holders— Consequences of Exchanging Common Shares for Teranga Shares or the Receipt of Cash Pursuant to Dissent Rights” above.

 

Information Reporting and Backup Withholding

 

Holders of Common Shares may be subject to information reporting and may be subject to backup withholding, at a 28% rate, on any property received in exchange for Common Shares. Distributions on, or the proceeds from a sale or other disposition of, Teranga Shares paid within the United States or through certain U.S.-related financial intermediaries to a holder may be subject to information reporting and may be subject to backup withholding unless the holder (i) is an exempt recipient or (ii) in the case of backup withholding (but not information reporting), provides an accurate taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred.

 

Backup withholding is not an additional tax. Any amounts withheld from a payment to a holder under the backup withholding rules may be credited against the holder’s U.S. federal income tax liability, and a holder may obtain a refund of any excess amounts withheld by filing the appropriate claim for refund with the IRS in a timely manner and furnishing any required information.

 

Recently enacted legislation requires certain U.S. Holders to report information to the IRS with respect to their investment in Teranga Shares unless certain requirements are met. U.S. Holders who fail to report required information could become subject to substantial penalties. U.S. Holders are encouraged to consult with their own tax advisors regarding the possible implications of this new legislation on their investment in Teranga Shares.

 

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ADDITIONAL INFORMATION CONCERNING OROMIN

 

Price Range and Trading Volume of the Common Shares

 

The Common Shares are listed and posted for trading on the TSX under the symbol “OLE” and on the OTC/BB under the symbol “OLEPF”. The table below sets forth the price ranges and volume of Common Shares traded on the TSX and OTC/BB by month to the date of this Circular:

 

		TSX						OTC/BB
Calendar Period(1)		High		Low		Volume		High		Low		Volume
		($)		($)				(US$)		(US$)
2013
August 1-29		0.46		0.29		2,928,238		0.41		0.27		132,745
July		0.38		0.20		4,022,782		0.36		0.20		278,267
June		0.41		0.23		4,810,513		0.38		0.28		634,780
May		0.40		0.25		1,639,911		0.40		0.25		519,717
April		0.48		0.30		1,817,331		0.44		0.28		650,918
March		0.52		0.44		2,361,630		0.53		0.44		1,059,595
February		0.79		0.55		1,281,156		0.80		0.52		303,693
January		0.83		0.74		2,058,338		0.85		0.75		416,737
2012
December		0.80		0.66		1,045,804		0.79		0.68		469,798
November		0.79		0.67		1,632,521		0.80		0.70		299,618
October		0.79		0.63		2,084,505		0.80		0.63		409,796
September		0.79		0.60		2,202,000		0.80		0.60		567,905

 

Note:

(1)         TSX and OTC/BB data is sourced from Thomson/Reuters.

 

Teranga publicly announced its intention to make the Offer on June 3, 2013.  On May 31, 2013, the last trading day immediately prior to the announcement, the closing prices of the Common Shares on the TSX and the OTC/BB were $0.245 and US$0.2496, respectively. On August 29, 2013, the last trading day prior to the date of this Circular, the closing price of the Common Shares on the TSX and the OTC/BB were $0.44 and US$0.41, respectively.

 

After completion of the Arrangement, the Company intends to have the Common Shares de-listed from the TSX, and to cease to be a reporting issuer in each of the jurisdictions of Canada in which it is currently a reporting issuer. Teranga expects that Common Shares will cease to be quoted on the OTC/BB and intends to take such steps as are necessary to suspend Oromin’s reporting obligations under the Exchange Act. Accordingly, the Company intends to apply for confirmation from the TSX and orders in all of the provinces and territories of Canada that, if granted, would provide that if the Arrangement Resolution is approved, immediately after the Effective Date the Company would be de-listed from the TSX and cease to be a reporting issuer in all of the provinces and territories of Canada.

 

Purchases of Common Shares

 

During the 12 months preceding the date hereof, neither the Company or Teranga has purchased any Common Shares, other than the 81,076,401 Common Shares purchased by Teranga pursuant to the Offer.

 

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Prior Distributions

 

The Company has not distributed has not distributed any Common Shares in the past five years other than distributions of Common Shares:

 

(a)                                 listed in “Oromin Explorations Ltd. — Prior Distributions” in Section 2 of the “Circular” of the Offer to Purchase and Circular; and

 

(b)                                 pursuant to a credit agreement dated January 31, 2013 with Sprott Resource Lending Partnership, 750,000 Common Shares at a deemed price of $0.75 per share at a fair value of $0.56 million.

 

Dividend Policy

 

The Company has never declared any dividends on the Common Shares during the previous two years as the Company has focused on using available funds to finance business growth.

 

Ownership of Securities of Oromin

 

Except as disclosed under “Voting Shares and Principal Holders Thereof”, no (a) director or officer of Teranga; or (b) to the knowledge of any of the officers or directors of Teranga, after reasonable inquiry: (i) associate or affiliate of an insider of Teranga; (ii) associate or affiliate of Teranga; (iii) insider of Teranga other than a director or officer of Teranga; or (iv) person or company acting jointly or in concert with Teranga, beneficially owns, directly or indirectly, or exercises control or direction over any Common Shares as at the date hereof.

 

The Arrangement is being proposed in order to allow Teranga to acquire the Common Shares that were not deposited under the Offer such that Oromin will become a wholly-owned subsidiary of Teranga. Each of the directors and senior officers of Oromin at the time of the Offer deposited all of their Common Shares, if any, under the Offer. None of the current members of the Board holds, directly or indirectly, any Common Shares.

 

INFORMATION REGARDING TERANGA

 

Teranga is a Canadian based gold company committed to responsible mining and sustainable development in the communities in which it operates. Teranga is principally engaged in the production and sale of gold, as well as related activities such as exploration and mine development.

 

Teranga was created to acquire the Sabodala gold project in Senegal (including the producing Sabodala gold mine) and certain exploration properties from Mineral Deposits Limited pursuant to the IPO Transaction. Teranga took over operational control of the Sabodala gold mine on November 23, 2010, the date of the Demerger, and the IPO Transaction was completed on December 7, 2010. Teranga’s activities since the Demerger have been centered in Senegal on the Sabodala gold project, which includes the producing Sabodala gold mine, as well as its regional exploration land package.

 

Additional information about Teranga is included in its public filings incorporated by reference herein and in “Teranga Gold Corporation — Description of the Business” in Section 1 of the “Circular” in the Offer to Purchase and Circular.

 

Name, Address and Incorporation

 

Teranga was incorporated on October 1, 2010 under the CBCA. Teranga is a reporting issuer or the equivalent in each of the provinces in Canada, other than Québec, and files its continuous disclosure documents with the Securities Regulatory Authorities in such provinces. Such documents are available on SEDAR at www.sedar.com. Additional information about Teranga is included in its public filings incorporated by reference herein.

 

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Teranga’s head and registered office is at 121 King Street West, Suite 2600, Toronto, Ontario, M5H 3T9, Canada. Teranga’s website is www.terangagold.com, and its telephone number is (416) 594-0000.

 

Organizational Structure

 

Following the completion of the Arrangement, the Company will be a wholly owned subsidiary of Teranga, and the organizational structure of Teranga will be as follows:

 

 

Description of Capital Structure

 

Teranga Shares

 

The authorized share capital of Teranga consists of an unlimited number of Teranga Shares. As at August 30, 2013, there were 294,263,840 Teranga Shares issued and outstanding.

 

Holders of Teranga Shares are entitled to receive notice of, attend and vote at, all meetings of the shareholders of Teranga (except with respect to matters requiring the vote of a specified class or series voting separately as a class or series) and are entitled to one vote for each Teranga Share on all matters to be voted on by shareholders at meetings of the Teranga’s shareholders. Holders of Teranga Shares are entitled to receive such dividends, if, as and when declared by the Teranga Board, in their sole discretion. All dividends which the Teranga Board may declare shall be declared and paid in equal amounts per share on all Teranga Shares at the time outstanding. On liquidation, dissolution or winding up of Teranga, the holders of Teranga Shares will be entitled to receive the property of Teranga remaining after payment of all outstanding debts on a pro rata basis, but subject to the rights, privileges, restrictions and conditions of any other class of shares issued by Teranga. There are no pre-emptive, redemption or conversion rights attaching to the Teranga Shares. All Teranga Shares when issued, are and will be issued as fully paid and non-assessable shares without liability for further calls or to assessment.

 

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Teranga Options

 

As of August 30, 2013, 23,955,489 Teranga Options to acquire an additional 23,955,489 Teranga Shares were outstanding. This includes 7,791,600 Teranga Options that were granted pursuant to the Stock Option Roll-Over Agreements entered into with holders of Oromin Options, pursuant to the Support Agreement.

 

Dividends and Dividend Policy

 

Teranga has not, since the date of its incorporation, declared or paid any dividends on the Teranga Shares, and does not currently have a policy with respect to the payment of dividends. For the foreseeable future, Teranga anticipates that it will retain future earnings and other cash resources for the operation and development of its business. The payment of dividends in the future, if any, will be determined by the Teranga Board in their sole discretion based upon, among other factors, the cash flow, results of operations and financial condition of Teranga, the need for funds to finance ongoing operations, and such other business considerations as the Teranga Board considers relevant.

 

Prior Sales

 

The table below sets forth information relating to the shares of Teranga Shares that Teranga has issued as consideration pursuant to the Offer. Other than as described below, Teranga has not issued any other shares of Teranga Shares during the twelve months preceding the date hereof.

 

Date of Issuance		Number of Teranga Shares Issued		Issue Price(s)(1)
August 9, 2013		1,675,393		$	0.54
August 7, 2013		46,969,447		$	0.50

 

Note:

(1)         Based on the closing price of the Teranga Shares on TSX on the date of issuance.

 

Price Range and Trading Volume of the Teranga Shares

 

The Teranga Shares are listed on the TSX and in the form of CHESS Depository Interests on the ASX, in each case under the trading symbol “TGZ”. The following table sets forth, for the periods indicated, the reported high and low prices and the aggregate volume of trading of the Teranga Shares on the TSX and the ASX.

 

		TSX						ASX
Calendar Period(1)		High		Low		Volume		High		Low		Volume
		($)		($)				(AUS$)		(AUS$)
2013
August 1-29		0.78		0.48		14,017,358		0.79		0.54		5,401,233
July		0.70		0.55		3,772,951		0.78		0.58		5,463,090
June		0.81		0.58		1,683,122		0.82		0.59		4,787,179
May		0.93		0.69		3,083,730		0.93		0.68		3,534,887
April		1.15		0.75		4,699,800		1.08		0.71		8,875,674
March		1.40		1.11		2,694,386		1.30		1.08		4,563,420
February		1.93		1.30		3,788,858		1.86		1.35		6,551,010
January		2.33		1.97		3,125,003		2.24		1.90		1,354,111

 

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		TSX						ASX
Calendar Period(1)		High		Low		Volume		High		Low		Volume
		($)		($)				(AUS$)		(AUS$)
2012
December		2.35		2.16		3,518,933		2.27		2.08		2,847,662
November		2.47		2.17		2,114,042		2.35		2.04		6,323,141
October		2.37		2.14		2,194,353		2.35		2.03		4,251,747
September		2.27		2.01		1,463,421		2.25		1.96		3,796,836

 

Note:

(1)         TSX and ASX data is sourced from Thomson Reuters. Past performance should not be seen as an indicator of future performance.

 

Teranga publicly announced its intention to make the Offer on June 3, 2013.  On May 31, 2013, the last trading day immediately prior to the announcement, the closing prices of the Teranga Shares on the TSX and the ASX were $0.71 and AUS$0.70, respectively. On August 29, 2013, the last trading day prior to the date of this Circular, the closing prices of the Teranga Shares on the TSX and the ASX were $0.72 and AUS$0.76, respectively.

 

Experts

 

Teranga’s auditors are Ernst & Young LLP, who replaced Deloitte LLP effective April 12, 2013. Deloitte LLP prepared an independent auditors’ report dated February 20, 2013 in respect of Teranga’s consolidated statements of financial position as at December 31, 2012 and December 31, 2011, and the consolidated statements of comprehensive income/(loss), consolidated statements of changes in equity and consolidated statements of cash flows for the year ended December 31, 2012 and the fifteen months ended December 31, 2011.

 

Certain legal matters in connection with the Arrangement will be passed upon by Stikeman Elliott LLP and Milbank, Tweed, Hadley & McCloy LLP, on behalf of Teranga, with respect to Canadian and U.S. law, respectively.  As at August 30, 2013, the partners and associates of Stikeman Elliott LLP beneficially owned, directly or indirectly, less than 1% of the Common Shares on a fully-diluted basis.

 

Material Contracts

 

The only material contract entered into or expected to be entered into by Teranga or the Company with respect to the Arrangement, or to which Teranga or the Company is expected to become a party on or prior to the Effective Date, is the Arrangement Agreement.  A copy of the Arrangement Agreement is attached to this Circular at Schedule A.

 

COMPARISON OF SHAREHOLDERS’ RIGHTS

 

If the Arrangement is completed, Shareholders will receive Teranga Shares as consideration for their Common Shares.  Since Teranga is a company existing under the laws of Canada, the rights of holders of Teranga Shares are governed by the CBCA and by Teranga’s articles and by-laws. The rights of Shareholders are currently governed by the BCBCA and by Oromin’s articles.  Although the rights and privileges of shareholders under the CBCA are in many instances comparable to those under the BCBCA, there are several differences.  See Section 17 “Comparison of CBCA and BCBCA” of the “Circular” in the Offer to Purchase and Circular, which is incorporated by reference herein.

 

RISK FACTORS

 

The following factors should be carefully considered by Shareholders in evaluating whether to approve the Arrangement Resolution. Additional risks and uncertainties not currently known to the Company or Teranga, as the case may be, or that the Company or Teranga currently considers immaterial, may also impair the operations of the Company or Teranga.  If any such risks actually occur, the business, financial condition, or liquidity and results of operations of the Company or Teranga could be materially adversely affected.

 

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Risks Relating to the Arrangement

 

Failure to complete the Arrangement could negatively impact the Company’s share price.

 

The completion of the Arrangement is subject to a number of conditions precedent, certain of which are outside the control of the Company, including receipt of the Final Order. There can be no certainty, nor can the Company provide any assurance, that these conditions will be satisfied or, if satisfied, when they will be satisfied. If the Arrangement is not completed, the market price of the Common Shares may decline to the extent that the market price reflects an assumption that the Arrangement will be completed.

 

Additionally, as a result of the number of Common Shares acquired by Teranga pursuant to its Offer, the number of Common Shares that might otherwise trade publicly and the number of Shareholders has been greatly reduced. If the Arrangement is not consummated, it is possible that the Common Shares would fail to meet the criteria for continued listing on TSX. If this were to happen, the Common Shares could be de-listed from TSX and this could, in turn, further adversely affect the liquidity and market or result in a lack of an established market for the Common Shares. The extent of the public market for the Common Shares and the availability of price or other quotations would depend upon the number of the Shareholders, the number of Common Shares publicly held and the aggregate market value of the Common Shares remaining at such time, the interest in maintaining a market in Common Shares on the part of securities firms, whether the Company remains subject to public reporting requirements in Canada and other factors.

 

The Teranga Shares issued under the Arrangement may have a market value different than expected.

 

Under the Arrangement, Teranga is offering to purchase Common Shares on the basis of 0.60 of a Teranga Share for every Common Share. Since the exchange ratio will not be adjusted to reflect any changes in the market value of Teranga Shares, the market values of the Teranga Shares and the Common Shares at the time of the completion of the Arrangement may vary significantly from the values at the date of this Circular. If the market price of Teranga Shares declines, the value of the consideration received by Shareholders will decline as well. For example, during the twelve month period ending on May 31, 2013 (the most recent practicable date prior to the date of the Offer), the trading price of Teranga Shares on the TSX varied from a low of $0.69 to a high of $2.49 and ended that period at $0.71. Variations in the market price for Teranga Shares may occur for a variety of reasons, including as a result of changes in, or market perceptions of changes in, the business, operations or prospects of Teranga, regulatory considerations, general market and economic conditions, gold price changes and other factors over which Teranga and the Company have no control.

 

The integration of Teranga and Oromin may not occur as planned.

 

The entering into of the Arrangement Agreement has been made with the expectation that the combination of Teranga and Oromin would result in a combined entity that is expected to have increased production from Teranga’s interest in the OJVG’s open pit reserves, higher earnings and higher free cash flow per share. These anticipated benefits are based on a number of assumptions and will depend in part on the completion of the Arrangement. Teranga has advised that most operational and strategic decisions, and certain staffing decisions, with respect to the combined entity have not yet been made and may not have been fully identified. These decisions and the integration of the two companies may present significant challenges to management, including the integration of systems and personnel of the two companies, and special risks, including possible unanticipated liabilities, significant one-time write-offs or restructuring charges, unanticipated costs and the loss of key employees. Furthermore, Teranga’s ability to efficiently assume Oromin’s 43.5% ownership and operation of the OJVG Golouma Gold Project and effectively work with Bendon and Badr is not guaranteed. On June 11, 2013, Bendon issued a press release suggesting that the Offer was in violation of the OJVG Shareholders Agreement and indicating that they intend to initiate legal action to protect their rights under that agreement. As a consequence, the co-operation of Bendon’s to work with Teranga a joint venture partner in the OJVG may not be forthcoming, which will make the integration of Teranga and Oromin more difficult than initially anticipated and may materially diminish the potential benefits to shareholders of the combined entity. In particular, given Bendon’s opposition to the Offer, a successful negotiation with the other OJVG partners of, among other things, a toll milling relationship with Teranga as the operator of the OJVG Golouma Gold Project may not materialize and the pursuit of any potential mining economies at the joint Masato deposit could be in jeopardy. Further, there can be no guarantee that

 

48

 

AUDITOR

 

The auditor of the Company is currently Davidson & Company LLP of Vancouver, British Columbia.

 

DOCUMENTS FILED WITH THE SEC

 

Teranga has filed with the SEC: (i) a registration statement on Form F-80 under the U.S. Securities Act, which covers Teranga Shares to be issued pursuant to the Arrangement and includes, among other things, the documents listed in the Offer to Purchase and Circular as incorporated by reference herein, (ii) a tender offer statement on Schedule 14D-1F, and (iii) a Form F-X to appoint an agent for service of process and provide required undertakings.  This Circular does not contain all of the information set forth in the registration statement and tender offer statement.  Reference is made to those documents and the exhibits thereto for further information.

 

ADDITIONAL INFORMATION

 

Financial information is provided in the Company’s comparative financial statements and management’s discussion and analysis thereon for its most recently completed financial year. Copies of these documents and additional information relating to the Company are available on SEDAR at www.sedar.com. Additional copies may be obtained without charge upon request to the Company at 2000 — 1055 West Hastings Street, Vancouver, British Columbia V6E 2E9.

 

50

 

CONSENT OF KOGER VALUATIONS INC.

 

We have read the management information circular of Oromin Explorations Ltd. (“Oromin”) dated August 30, 2013 (the “Circular”) relating to the special meeting of shareholders of Oromin to consider the arrangement between Teranga Gold Corporation and Oromin.

 

We hereby consent to the reference in the Circular to our firm name and our fairness opinion dated August 27, 2013 addressed to the Board of Directors of Oromin. In providing our consent, we do not intend that any persons other than the Board of Directors of Oromin shall rely upon our opinion.

 

 

	Toronto, Ontario
	August 30, 2013

 

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SCHEDULE A
PLAN OF ARRANGEMENT

 

PLAN OF ARRANGEMENT UNDER SECTION 288
OF THE BUSINESS CORPORATIONS ACT (BRITISH COLUMBIA)

 

ARTICLE 1
INTERPRETATION

 

1.1                               Definitions

 

Unless indicated otherwise, where used in this Plan of Arrangement, capitalized terms used but not defined shall have the meanings specified in the Arrangement Agreement and the following terms shall have the following meanings (and grammatical variations of such terms shall have corresponding meanings):

 

“Amalco” has the meaning ascribed thereto in Section 2.3(d).

 

“Arrangement” means the arrangement under Section 288 of the BCBCA on the terms and subject to the conditions set out in this Plan of Arrangement, subject to any amendments or variations made in accordance with the Arrangement Agreement or Section 6.1 of this Plan of Arrangement or made at the direction of the Court in the Final Order with the prior written consent of the Company and Teranga, each acting reasonably.

 

“Arrangement Agreement” means the arrangement agreement made as of August 27, 2013 between Teranga and the Company (including the Schedules thereto) as it may be amended, modified or supplemented from time to time in accordance with its terms.

 

“Arrangement Resolution” means the special resolution approving the Plan of Arrangement to be considered by the Shareholders at the Meeting.

 

“BCBCA” means the Business Corporations Act (British Columbia).

 

“Business Day” means a day of the year, other than a Saturday, Sunday or any day on which major banks are closed for business in Toronto, Ontario or Vancouver, British Columbia.

 

“Circular” means the notice of the Meeting and accompanying management information circular, including all schedules, appendices and exhibits to, and information incorporated by reference in, such management information circular, to be sent to the Shareholders in connection with the Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of the Arrangement Agreement.

 

“Common Shares” means the Common Shares in the capital of the Company.

 

“Company” means Oromin Explorations Ltd.

 

 

“Company Options” means the outstanding options to purchase Common Shares granted under the Company Stock Option Plan.

 

“Company Stock Option Plan” means the stock option plan of the Company, dated as of July 14, 2009, as amended March 1, 2011.

 

“Consideration” means the consideration to be received by Shareholders pursuant to this Plan of Arrangement as consideration, consisting of 0.60 of a Teranga Share for each Common Share.

 

“Court” means the Supreme Court of British Columbia.

 

“Depositary” means Kingsdale Shareholder Services Inc., at its offices set out in the Letter of Transmittal.

 

“Dissent Rights” has the meaning specified in Section 4.1of this Plan of Arrangement.

 

“Dissenting Shareholder” means a holder of Common Shares who has duly exercised his, her or its Dissent Rights and has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights, but only in respect of the Common Shares in respect of which Dissent Rights are validly exercised by such holder.

 

“Effective Date” the date agreed to by the Company and Teranga in writing as the effective date of the Arrangement after all of the conditions precedent to the completion of the Arrangement as set out in the Arrangement Agreement have been satisfied or waived, and the Company and Teranga shall execute a certificate confirming the Effective Date.

 

“Effective Time” means 12:01 a.m. on the Effective Date, or such other time as the Parties agree to in writing before the Effective Date.

 

“Final Order” means the final order of the Court in a form acceptable to the Company and Teranga, each acting reasonably, as contemplated by Section 2.5 of the Arrangement Agreement approving the Arrangement, as such order may be amended by the Court (with the consent of both the Company and Teranga, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended (provided that any such amendment is acceptable to both the Company and Teranga, each acting reasonably) on appeal.

 

“Governmental Entity” means (a) any multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign, (b) any subdivision, agent, commission, board, or authority of any of the foregoing, (c) any self-regulatory authority or any stock exchange, or (d) any quasi  governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing.

 

“holder” means, unless the context otherwise requires, a holder of Common Shares whose name appears in the register of holders of Common Shares maintained by or on

 

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