Thunder Mountain Gold Clarifies Letter of Intent to Acquire Green River Energy Corporation and Announces Private Placement
BOISE, Idaho, Dec. 12, 2011 /PRNewswire/ -- Thunder Mountain Gold, Inc. (the Company) (TSX-V: THM; OTCBB: THMG), a U.S.-based precious metals exploration company focused on discovering and defining high quality precious and base metal resources, is pleased to announce that on November 7, 2011 it entered into a non-binding letter of intent (the "Letter of Intent") to acquire Green River Energy Corporation ("Green River") with the Hess Group, the principal shareholders of Green River (the "Acquisition"). Green River is a privately-held oil and gas company based in Salt Lake City, Utah with current oil and gas production from the Uinta Basin in Utah. Green River's current revenue is from a working interest of 0.15854% in approximately 108,000 acres in the Monument Butte oil field, operated by Newfield Exploration Company. Green River also has additional working interest rights of up to 90% in over 4,000 acres of oil and gas leases within the highly productive oil & gas region of the Uinta Basin, with additional opportunities available.
"This is an exciting potential acquisition for us." Eric Jones, President and CEO of the Company said. "When completed, it will provide our shareholders with diversity in the resource sector and additional opportunities to grow our cash flow in the short term, while we continue to pursue precious metals exploration and development on our high quality metal properties."
The Letter of Intent contemplates that the Company would acquire Green River in an all stock transaction with the following material terms:
the Hess Group will assist the Company to complete a private placement offering to European investors for proceeds of $1,000,000 prior to the completion of the Acquisition (the "Company Private Placement"),
additionally, the Hess Group will pursue a private placement offering of Green River shares to European investors for proceeds of a minimum of $4,000,000 (the "Green River Private Placement"),
the proceeds of the Green River Private Placement will be held in escrow pending completion of the Acquisition and available to the Company upon completion of the Acquisition,
the Company Private Placement and the Green River Private Placement would be completed by January 31, 2012,
completion of the Green River Private Placement would be a condition to the Company's completion of the Acquisition,
the Company will issue shares of the Company to the shareholders of Green River based on an exchange ratio that will result in pre-Acquisition shareholders of the Company owning 25% and shareholders of Green River owning 75% of the Company following completion of the Acquisition,
the Company will change its name to "Thunder Mountain Resources, Inc." upon completion of the Acquisition,
existing Thunder Mountain Gold Management will continue to run the Company post-acquisition, and the majority of the board will be comprised of Thunder Mountain Gold directors,
the Company will pursue both the exploration and development of the Company's existing mineral properties and the Green River oil and gas properties following completion of the Acquisition, and continue to seek both mineral and oil and gas opportunities.
The Acquisition would be subject to receipt of all required approvals, including approval of the TSX Venture Exchange and the shareholders of the Company. Completion of the Acquisition will be subject to negotiation and execution of a definitive agreement with Green River and the Hess Group. The parties will work together to structure and complete the Acquisition in a manner that addresses applicable tax, corporate and securities laws. The Company anticipates that approval of its shareholders will be required should a definitive agreement be concluded, and that it would prepare and circulate to its shareholders a proxy circular that would be prepared in accordance with the requirements of both the Securities and Exchange Commission and the TSX Venture Exchange. The Acquisition will be subject to receipt of all required regulatory approvals, including approval of the TSX Venture Exchange and the shareholders of the Company.
If a definitive acquisition agreement is concluded, the acquisition of Green River will constitute a "reverse takeover" under the policies of the TSX Venture Exchange. Accordingly, completion of the Acquisition will be contingent upon the Company complying with the reverse takeover policies of the Exchange, which will require the completion and filing of a NI 51-101 compliant report with respect to the material oil and gas properties of Green River. The directors and officers of the Company and certain principal shareholders of Green River have entered into pooling agreements whereby they have confirmed their agreement not to trade in any securities of the Company pending the earlier of completion of the Acquisition or termination of the Letter of Intent. Investors are cautioned not to rely on the statements of the Company in its December 9, 2011 news release regarding projected production from the Monument Butte oil field as these projections are not supported by a NI 51-101 compliant report. Accordingly, these projections should not be relied upon by investors.
When the Acquisition is completed, the new capital raised for the combined company is anticipated to be deployed both on the Company's existing mineral exploration work plans, and for direct investment to increase oil and gas production of Green River's properties in the Uinta Basin. Investment in the Uinta Basin will be focused on acquiring additional working interests in existing wells or drilling new wells for the company, with the objective of increasing the cash flow to the Company. Mineral exploration is planned to advance the South Mountain, Idaho project toward feasibility and to initiate drilling at the Trout Creek gold project in Nevada, a joint exploration agreement with Newmont Mining Corporation.
Private Placement
The board of directors has approved a private placement offering by the Company of up to 2,500,000 shares of common stock at a price of $0.20 per share for total proceeds of up to $500,000. The proceeds of the offering would be used for the following pending completion of the Acquisition;
exploration on the newly completed option on the Iron Creek cobalt gold project,
initiation of exploration on the Thunder Mountain Gold/ Newmont Mining Trout Creek joint venture, and
Professional and other expenses relating to the negotiation of a definitive agreement for and the completion of the Acquisition.
Finder's fees may be payable on a portion of the private placement in accordance with the policies of the TSX Venture Exchange. The common shares issued in the private placement will be subject to a four-month hold period in accordance with the policies of the TSX Venture Exchange and applicable securities legislation. In addition, the common shares will be "restricted securities" under the 1933 Act. The private placement remains subject to the approval of the TSX Venture Exchange.
U.S. Securities Act of 1933
This press release does not constitute an offer of any securities for sale or a solicitation of an offer to purchase any securities. The securities to be issued in connection with the Acquisition have not been and will not be registered under the United States Securities Act of 1933 (the "1933 Act") and may not be offered or sold in the United States absent registration under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act. In addition, neither the securities of the Company or the securities of Green River to be issued in connection with the private placements contemplated in this press release have been or will be registered under the 1933 Act and may not be offered or sold in the United States absent registration under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act.
About Thunder Mountain Gold, Inc.
Thunder Mountain Gold, founded in 1935, holds a 100% interest in several U.S. gold projects. The Company's principal assets are The South Mountain Project – a historic former producer of polymetallic ore located in southern Idaho, just north of the Nevada border, and their Trout Creek Project – a grass roots gold target in the Eureka-Battle Mountain trend of central Nevada, currently under Joint Exploration Agreement with Newmont Gold. For more information on Thunder Mountain, please visit the Company's website at www.Thundermountaingold.com
Forward-Looking Statements
This press release contains forward-looking statements that are based on the beliefs of management and reflect the Company's current expectations. The forward-looking statements in this press release also include information relating to the intention of the Company to complete the Acquisition and the completion of the private placements contemplated in connection with the Acquisition and disclosed in this press release. The forward-looking statements are based on certain assumptions, which could change materially in the future, including the assumption that the non-binding Letter of Intent will lead to a definitive agreement, that the transactions contemplated in the Letter of Intent will be completed, and that the Company will successfully complete the Acquisition. By their nature, forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include the risk that the Letter of Intent may be terminated, that the transaction contemplated in the Letter of Intent may not result in a binding definitive agreement and any agreement may have terms and conditions different from those contemplated in the Letter of Intent, that the Acquisition and contemplated private placements may not be completed and that Company may not expend its available funds following completion of the Acquisition in the manner contemplated in this press release. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on forward-looking information. Forward-looking information is provided as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required in accordance with applicable laws.
Cautionary Note to Investors
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. The United States Securities and Exchange Commission ("SEC") permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce.
For further information, please contact:
Thunder Mountain Gold Inc.
Eric Jones, President and C.E.O.Email: eric@thundermountaingold.comPhone: (208) 658-1037
Jim Collord, Vice President and C.O.O.Email: jim@thundermountaingold.com
SOURCE Thunder Mountain Gold, Inc.
