Timberline Agrees to Acquire Staccato Gold With Potential Near-Term Nevada Gold Production at Lookout Mountain
Buzz up! 0
Print
Companies:Timberline Resources Corp.
Related Quotes
Symbol Price Change
TLR 1.19 0.00
Press Release Source: Timberline Resources Corporation On Tuesday March 23, 2010, 8:30 am
COEUR D'ALENE, Idaho, March 23, 2010 (GLOBE NEWSWIRE) -- Timberline Resources Corporation (NYSE Amex:TLR) ("Timberline") and Staccato Gold Resources Ltd. (TSX-V:CAT - News) ("Staccato") are pleased to announce that they have entered into a definitive agreement (the "Agreement") whereby Timberline will acquire, through a court-approved plan of arrangement, all of the issued and outstanding common shares of Staccato by means of a share exchange (the "Arrangement"). Under the Agreement, Staccato shareholders will receive one share of common stock of Timberline and $0.0001 for every seven Staccato common shares held (the "Exchange Ratio"). This represents a value of approximately CND$0.17 per Staccato common share based on the closing price of Timberline shares on the NYSE Amex on March 22, 2010, an 82% premium to the closing price of Staccato shares on the date prior to announcement of the Arrangement and a 76% premium to Staccato's 20-day volume weighted average closing price.
Executives of Timberline and Staccato will hold a conference call to discuss this acquisition at 4:30 pm Eastern Time (1:30 pm Pacific Time) tomorrow afternoon, March 24, 2010. Details regarding the conference call are provided below.
With the completion of this Arrangement, Timberline will acquire Staccato's South Eureka property which includes a drill-tested exploration portfolio and the advanced-stage Lookout Mountain project, located along Nevada's Battle Mountain -- Eureka trend, and approximately $5 million in cash.
The South Eureka property is comprised of several projects included within one of the largest exploration land packages in the Battle Mountain / Eureka Trend -- approximately 15,000 acres. The property has identified exploration potential evidenced by historic workings and gold anomalies throughout the district. The flagship Lookout Mountain project features a defined section of mineralized material within a large scale structural corridor and numerous high-priority targets to test. Timberline's Butte Highlands Gold Project is funded to production by its joint venture partner; therefore, Timberline intends to focus its exploration efforts at Staccato's Lookout Mountain project.
Benefits for Timberline Shareholders
Low cost acquisition of significant mineralized material base with near-term gold production potential at the Lookout Mountain project
Large, drill-tested, highly prospective project portfolio on Nevada's Battle Mountain - Eureka gold trend
Cash infusion of approximately $5 million for exploration and development, primarily at the Lookout Mountain project
Addition of strategic assets in Nevada while maintaining an attractive share structure
Benefits for Staccato Shareholders
Strong premium to recent Staccato market price and a fresh start toward realization of shareholder value
Anticipated near-term gold production at the Butte Highlands joint venture where Timberline owns a 50% carried-to-production interest
A vertically-integrated company with in-house capability, expertise, and strategic alliances to explore, drill, permit, develop, and produce -- and the corporate strength to advance Staccato's projects
Two core drilling subsidiaries with positive cash flow and annual revenue over US$17 million in the fiscal year ended September 30, 2009 will provide economical drilling for exploration and development
Attractive corporate vehicle and share structure to accommodate additional acquisitions and growth
Timberline CEO Randal Hardy stated, "We are very pleased with this acquisition opportunity and the value it represents for our shareholders. We are focused on projects that offer near-term production potential with significant exploration upside, and we believe that Staccato's South Eureka properties provide an excellent fit. Combined with our development-stage Butte Highlands project and our core drilling businesses, the Staccato assets will advance our goal of positioning Timberline as an emerging junior gold producer."
Mr. Hardy added, "Following a thorough technical review, we believe that the Lookout Mountain project has potential for near-term open pit production with relatively modest capital expenditures. We believe our team is well-suited to advance the project. Our V-P Exploration, Paul Dircksen, has extensive gold exploration and mine development experience in Nevada and has contributed to the discovery of several gold deposits that later became operating mines. Our newest board member, Bob Martinez, adds extensive metallurgical knowledge and experience managing heap leach operations in Nevada. Paul, Bob, and our entire team are enthusiastic about acquiring Staccato and look forward to advancing the Lookout Mountain project."
Timberline's Chairman and V-P Exploration, Paul Dircksen, stated, "Staccato's South Eureka package lies within the Battle Mountain / Eureka Trend in Nevada, just a few miles from Barrick's two-million ounce Archimedes / Ruby Hill mine. Our internal studies indicate that the Lookout Mountain project hosts significant oxide gold mineralization amenable to low-cost, heap-leach recovery techniques, along with a smaller, high-grade, sulfide resource. Our plan is to drill in-fill and step-out holes to further define and expand known mineralized zones, conduct additional metallurgical testing, and complete an economic scoping study for a near-term production decision. We also plan to launch field programs at Windfall and other earlier-stage, high-potential targets. We are very excited to acquire the South Eureka property and believe that it is an excellent fit for our business plan and our team."
Staccato's President and CEO, Grant Ewing, said, "We are very pleased with the premium offer Timberline has made. Timberline is a near-term producer that has the expertise and the knowledge base to move our advanced stage Lookout Mountain project towards production - in addition to their own projects. We are impressed with the Timberline management team and believe that the combined assets of Staccato and Timberline represent enhanced value creation potential for Staccato shareholders."
Summary of Arrangement
Summary of Arrangement
The proposed arrangement between Timberline and Staccato is expected to be completed by way of a court-approved plan of arrangement whereby one share of common stock of Timberline and $0.0001 will be exchanged for seven (7) Staccato common shares and Staccato will become a wholly-owned subsidiary of Timberline. Upon completion of the Arrangement, Timberline will have approximately 56 million common shares issued and outstanding, with 73 million shares on a fully diluted basis. Current Timberline shareholders will own approximately 74% of the shares outstanding and former Staccato shareholders will own approximately 26%. On a fully diluted basis, Timberline will be owned 71% by current Timberline shareholders and 29% by current Staccato shareholders. In conjunction with this Arrangement, Timberline will seek a listing of its shares of commons stock on the TSX Venture Exchange with the intent to have a listing in Toronto in addition to the NYSE Amex listing.
Pursuant to the Arrangement, the holders of a portion of the outstanding Staccato options and the holders of all Staccato warrants will be entitled to receive Timberline options and warrants at the Exchange Ratio and with corresponding changes to the exercise price based on the Exchange Ratio. The balance of the outstanding Staccato options will either be exchanged for Staccato shares prior to the closing or cancelled at closing.
Completion of the Arrangement is subject to regulatory approvals and a favorable vote of at least two-thirds of the holders of Staccato common shares voted at a special meeting of shareholders to be held on May 14, 2010 and a favorable vote of a majority of the holders of shares of Timberline common stock voted at a special meeting of shareholders to be held in May 2010.
The Arrangement is subject to customary closing conditions including the receipt of all necessary court and regulatory approvals, including the approval of the NYSE Amex and the TSX Venture Exchange. The Agreement provides for the payment of reciprocal break fees under certain conditions, and the Arrangement is expected to close by June 15, 2010.
The Arrangement has been unanimously approved by the Board of Directors of both Staccato and Timberline, and the management and directors of both companies have entered into support agreements. The Agreement contains a commitment from Staccato not to solicit or initiate discussions concerning alternative transactions to the proposed Arrangement.
