Buffalo Gold Corp (fka BFG.U)

[Tackler]

Dynasty Gold, Buffalo Gold sign merger LOI

2007-03-13 07:41 MT - News Release

Mr. Stuart Angus reports

DYNASTY GOLD ENTERS FRIENDLY MERGER WITH BUFFALO GOLD LTD.

Dynasty Gold Corp. has signed a letter of intent to enter into a friendly merger with Buffalo Gold Ltd.

Under the agreement, Buffalo will acquire all of the outstanding securities of Dynasty in exchange for common shares and common share purchase warrants and options of Buffalo. Dynasty is a Vancouver-based publicly traded gold exploration company with three highly prospective projects in northwest China.

Highlights of the transaction

Under the terms of the transaction, shareholders of Dynasty will receive one common share of Buffalo in exchange for each 4.5 Dynasty common shares, common share purchase warrants or options which they hold immediately prior to the effective date of the merger. This represents an approximate 29-per-cent premium on Dynasty shares. Following completion of the transaction, Dynasty shareholders will hold an approximately 19.3-per-cent equity ownership in the merged company.

"This merger represents an excellent opportunity for Dynasty and its shareholders to become part of a larger, diverse entity with exceptional growth potential, while still participating in the development of Dynasty's outstanding suite of properties," commented Dynasty's chair of the board, Tookie Angus.

Completion of the transaction is subject to satisfaction of a number of conditions, including, but not limited to, completion of due diligence and the receipt of all required approvals, including approval of the Toronto Stock Exchange, the TSX Venture Exchange, and of the shareholders of Dynasty. There can be no assurance that the transaction will be completed as proposed or at all. It is intended that a meeting of the shareholders of Dynasty will be held as soon as possible to approve the transaction and it is anticipated that this meeting will be held by the second calendar quarter of 2007. Under certain circumstances, a termination fee will be payable if the transaction is not completed.

Buffalo intends to continue the operations of Dynasty including the employment of Dynasty's geological team, and in co-operation with all of the current exploration and joint venture partners.

As at March 12, 2007, approximately 68,279,160 common shares of Dynasty were outstanding. Upon completion of the transaction, assuming the exercise in full of all Dynasty options and warrants, Buffalo will issue approximately 15,173,146 common shares to the Dynasty shareholders. A total of 63,466,878 Buffalo common shares are issued and outstanding as at the date of this news release, which includes the 17 million shares issued March 12, 2007, and escrowed for 18 months as part of the Mt. Kare earn-in agreement.