Timberline Resources and Wolfpack Gold Complete the Definitive
Agreement for Timberline to Acquire Assets of Wolfpack
COEUR D'ALENE, IDAHO--(Marketwired - May 8, 2014) - Timberline
Resources Corporation (NYSEMKT:TLR) (TSX-VENTURE:TBR)
("Timberline") is pleased to announce that it has entered into a
definitive agreement (the "Agreement") with Wolfpack Gold Corp.
("Wolfpack") whereby Timberline will acquire certain of the Nevada
gold properties of Wolfpack plus approximately Cdn$5.3 million in
cash (inclusive of the current US$1 million dollar loan from
Wolfpack to Timberline, which will be cancelled) in exchange for
the issuance of 42,932,063 shares of common stock of Timberline
(the "Timberline Shares").
Upon completion of the transaction, Timberline shareholders will
hold, as a group, approximately 64% of the outstanding shares of
Timberline, while Wolfpack shareholders will hold, as a group,
approximately 36% of the outstanding Timberline shares. The
transaction remains subject to fulfillment of customary conditions
precedent on behalf of both companies, approval by the shareholders
of both companies, and all necessary regulatory and stock exchange
approvals.
Timberline President and CEO Paul Dircksen commented, "We are
pleased that we have finalized the definitive agreement for this
acquisition. Upon closing of the transaction, we will have acquired
funding to focus on our advanced South Eureka / Lookout Mountain
project in Nevada where we have excellent potential for new
discoveries in addition to the existing significant NI 43-101
resource. The Company intends to limit its expenditures to projects
with superior potential that maximize our opportunities in Nevada,
one of the most favorable gold domains in the world. In addition,
Timberline's shareholders will continue to benefit from the future
developments at Butte Highlands in Montana once the remaining
permits are granted."
Summary of
Arrangement
The transaction between Timberline and Wolfpack is expected to
be completed by way of a statutory plan of arrangement under the
Business Corporations Act (British Columbia) (the
"Arrangement") that contemplates that Timberline will issue the
Timberline Shares to Wolfpack in exchange for all of the issued and
outstanding shares of a Wolfpack subsidiary which holds the Nevada
properties and cash to be acquired and as consideration for the
cancellation of the outstanding US$1 million loan from Wolfpack to
Timberline. Wolfpack will then distribute the Timberline Shares to
its shareholders based on an exchange ratio of 0.75 of one
Timberline Share in exchange for each outstanding common share of
Wolfpack.
Completion of the Arrangement is subject to a favorable vote of
at least two-thirds of the holders of Wolfpack common shares voted
at a special meeting of shareholders and a favorable vote of a
majority of the holders of shares of outstanding Timberline common
stock voted at an annual and special meeting of stockholders. Both
meetings are to be held by no later than June 30, 2014. Completion
of the Arrangement is also subject to certain approvals by the
British Columbia Supreme Court, the NYSEMKT, the TSX Venture
Exchange and the receipt of all other necessary regulatory and
third party approvals.
Stockholders of Timberline will also be asked to approve an
increase in the authorized capital of Timberline from 100,000,000
to 200,000,000 shares to accommodate the issuance of the Timberline
Shares, to approve a possible name change of Timberline, and to
approve a reverse stock split of Timberline's outstanding shares of
common stock.
The Arrangement is subject to customary closing conditions. The
Agreement provides for the payment of reciprocal break fees of
US$500,000 under certain conditions. The Agreement contains a
commitment from both companies not to solicit or initiate
discussions concerning alternative transactions to the proposed
Arrangement.
The Arrangement is expected to close by no later than July 31,
2014.
The Arrangement has been unanimously approved by the Board of
Directors of both Timberline and Wolfpack, and both companies have
agreed to use commercially reasonable efforts to obtain support
agreements from the management and directors of both companies.
Management Team and
Board of Directors
Following completion of the Arrangement, Timberline's Board of
Directors will consist of five (5) directors, three (3) directors
to be appointed by Timberline and two (2) directors to be appointed
by Wolfpack, with William Sheriff of Wolfpack to act as Chairman of
the Board. There will be no change in the management of Timberline.
Paul Dircksen will continue as the President and Chief Executive
Officer of Timberline, Randy Hardy will continue as the Chief
Financial Officer, and Steve Osterberg will continue as the
Vice-President of Exploration.
Reverse Stock
Split
Subsequent to the completion of the Arrangement, Timberline has
agreed to conduct a reverse split of its outstanding shares of
common stock on a basis to be determined by the Board of Directors
of Timberline. The reverse stock split remains subject to approval
of the stockholders of Timberline and all necessary regulatory and
stock exchange approvals.
About Timberline Resources
Timberline Resources Corporation is exploring and developing
advanced-stage gold properties in the western United States.
Timberline holds a 50-percent carried interest ownership stake in
the Butte Highlands Joint Venture in Montana. Timberline's
exploration is primarily focused on the major gold districts of
Nevada, where it is advancing its flagship Lookout Mountain Project
toward a production decision while exploring a pipeline of quality
earlier-stage projects at its South Eureka Property and elsewhere.
Timberline management has a proven track record of discovering
economic mineral deposits that are developed into profitable
mines.
Timberline is listed on the NYSEMKT where it trades under the
symbol "TLR" and on the TSX Venture Exchange where it trades under
the symbol "TBR".
About Wolfpack
Wolfpack Gold's mandate is to advance low cost heap leach and
high grade underground gold projects towards production in the
western United States. The Castle-Black Rock project has a previous
operating history as an open pit heap leach operation before
closing due to low gold prices in the 1980's. With quality assets
in a world class jurisdiction, a budgeted three-year plan and an
exploration team with documented exploration discoveries in Nevada,
Wolfpack Gold is positioned to advance new and existing discoveries
towards production. In addition, the Company has a 100% interest,
with no holding costs, on 115,000+ acres (46,400 ha) of private
mineral rights in New Mexico, including the Crownpoint and Hosta
Butte uranium deposits. These deposits contain an indicated
resource of 26.6 MM pounds U3O8 at an average grade of 0.105% 4
eU3O8 and an inferred resource of 6.1 MM pounds U3O8 at an average
grade of 0.110 eU3O8 (Beahm, 2012). A portion of these resources
are under NRC license.
Additional Information and Where to Find It
In connection with Timberline's and Wolfpack's solicitation of
proxies with respect to the meeting of shareholders of each of
Timberline and Wolfpack to be called with respect to the proposed
Arrangement, Timberline will file a proxy statement with the
Securities and Exchange Commission (the "SEC") and Wolfpack will
file an information circular with certain regulatory authorities in
Canada.
SHAREHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT/INFORMATION
CIRCULAR WHEN IT IS FINALIZED AND DISTRIBUTED TO SHAREHOLDERS
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.
Shareholders will be able to obtain a free-of-charge copy of the
proxy statement/information circular (when available) and other
relevant documents filed with the SEC from the SEC's website at
http://www.sec.gov and with Canadian regulatory authorities from
SEDAR at http://www.sedar.com. Shareholders of Timberline will also
be able to obtain a free-of-charge copy of the proxy statement and
other relevant documents (when available) by directing a request by
mail or telephone to Timberline Resources Corporation, 101 E.
Lakeside, Coeur d'Alene, Idaho 83814 or (208) 664-4859, or from
Timberline's website, www.timberline-resources.com. Shareholders of
Wolfpack will also be able to obtain a free-of-charge copy of the
information circular and other relevant documents (when available)
by directing a request by mail or telephone to Wolfpack Gold Corp.
at Suite 5, 5450 Riggins Court, Reno, Nevada or (775) 284-1271 or
from Wolfpack's website, www.wolfpackgold.com.
None of the securities anticipated to be issued pursuant to the
Arrangement have been or will be registered under the Securities
Act of 1933, as amended (the "U.S. Securities Act") or any state
securities laws, and are anticipated to be issued in reliance upon
available exemptions from such registration requirements under
Section 3(a)(10) of the U.S. Securities Act and applicable
exemptions under state securities laws. This press release does not
constitute an offer to sell or the solicitation of an offer to buy
any securities.
Forward-looking Statements
Statements contained herein that are not based upon current or
historical fact are forward-looking in nature and constitute
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Such forward-looking statements reflect the Company's
expectations about its future operating results, performance and
opportunities that involve substantial risks and uncertainties.
These statements include but are not limited to statements
regarding the development of the Company's Butte Highlands project,
the timing and completion of the Arrangement, approval of the
Arrangement by the court and shareholders of Timberline and
Wolfpack, board and management composition following the Wolfpack
acquisition, the amount of funds to be acquired, the potential for
enhanced value to shareholders following the acquisition of a
Wolfpack subsidiary and potential development and production of the
properties of the combined company and other such similar
statements. When used herein, the words "anticipate," "believe,"
"estimate," "upcoming," "plan," "target", "intend" and "expect" and
similar expressions, as they relate to Timberline Resources
Corporation, its subsidiaries, or its management, are intended to
identify such forward-looking statements. These forward-looking
statements are based on information currently available to the
Company and are subject to a number of risks, uncertainties, and
other factors that could cause the Company's actual results,
performance, prospects, and opportunities to differ materially from
those expressed in, or implied by, these forward-looking
statements. Factors that could cause or contribute to such
differences include, but are not limited to, risks related to the
timing and completion of the proposed transaction with Wolfpack
Gold, unsatisfactory results of due diligence, the receipt of a
superior proposal by one of the parties, failure to receive
necessary regulatory or shareholder approvals, risks and
uncertainties related to mineral estimates, risks related to the
inherently dangerous activity of mining, and other such factors,
including risk factors discussed in the Company's Annual Report on
Form 10-K for the year ended September 30, 2013. Except as required
by Federal Securities law, the Company does not undertake any
obligation to release publicly any revisions to any forward-looking
statements.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Timberline Resources CorporationPaul DircksenCEO208.664.4859
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