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Enter Symbol
or Name
USA
CA



Timberline Resources Corp (2)
Symbol TBR
Shares Issued 9,900,084
Close 2015-09-10 C$ 0.41
Market Cap C$ 4,059,034
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Timberline to be acquired at 58 U.S. cents a share

2015-09-15 10:11 ET - News Release

Mr. Kiran Patankar reports

TIMBERLINE ANNOUNCES NON-BINDING LETTER AGREEMENT FOR ACQUISITION BY WATERTON PRECIOUS METALS FUND II CAYMAN, LP AND PRIVATE PLACEMENT FINANCING

Timberline Resources Corp. has signed a non-binding letter agreement with an effective date of Sept. 13, 2015, pursuant to which Waterton Precious Metals Fund II Cayman LP has offered to acquire all of the issued and outstanding shares of Timberline's common stock for cash consideration of 58 U.S. cents per Timberline share. The structure of the proposed transaction remains to be determined, and the consummation of the transaction is subject to completion of due diligence, execution of definitive agreements, board and regulatory approvals, and other customary closing conditions.

In connection with the transaction, Timberline and Waterton have agreed that Waterton will subscribe for 1,331,861 common shares of Timberline on a private placement basis at a price of 37.5 U.S. cents per share for total proceeds of $499,447.87 (U.S.). This represents approximately 9.9 per cent of Timberline's outstanding common shares after giving effect to the private placement. The private placement is binding and expected to close no later than Sept. 23, 2015, subject to the satisfaction of certain regulatory requirements, but is not contingent on completion of the transaction. Waterton will have the right to maintain its pro rata ownership position in Timberline in the event the transaction is not completed.

Kiran Patankar, president and chief executive officer of Timberline, commented: "We are very pleased to announce this agreement with Waterton, which addresses Timberline's immediate financing requirements and, subject to completion of the transaction, also provides cash consideration to Timberline shareholders at a significant premium to the current trading price in a difficult market for junior gold companies."

Cheryl Brandon, partner and head of investment management of Waterton's investment adviser, said: "We are very pleased to have reached an agreement with the board and management of Timberline. The acquisition of Timberline's assets in Nevada will enhance Waterton's existing portfolio of high-quality development properties in the region."

Proposed transaction highlights:

  • The acquisition price of 58 U.S. cents per share represents a 76-per-cent premium to Timberline's closing price of 33 U.S. cents per share on Sept. 11, 2015, and a 79-per-cent premium to the company's 20-day volume-weighted average price (VWAP).
  • The cash consideration being provided by Waterton offers Timberline shareholders certainty in a difficult market environment for gold exploration and development companies.
  • The private placement financing of $499,447.87 (U.S.) significantly derisks the company financially in the event the transaction does not proceed.
  • Waterton has a proven recent record of acquiring Nevada gold assets and has a strong strategic interest in advancing both the Talapoosa and Eureka projects.

Proposed transaction overview

Pursuant to the letter agreement, Timberline has granted Waterton an exclusivity period until 30 days following receipt of certain due diligence materials to complete its due diligence review and for the execution of definitive agreements, which may include lock-up agreements with each of the directors and officers of Timberline, and a support agreement. Timberline has also granted Waterton customary deal protections including a 5-per-cent break fee payable in the event Timberline enters into an alternative transaction within a 90-day period following expiry of the exclusivity period.

Advisers

With respect to the transaction, Macquarie Capital Markets Canada Ltd. is serving as exclusive financial adviser to Timberline, McMillan LLP is serving as the company's U.S. counsel and Miller Thomson LLP is serving as the company's Canadian counsel.

We seek Safe Harbor.

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