Timmins Gold Corp. (TMM.TO: Quote,TGD: Quote) and Newstrike Capital Inc. (NES.V) announced that they have entered into a definitive arrangement agreement pursuant to which Timmins Gold has agreed to acquire all of the issued and outstanding common shares of Newstrike by way of a court approved plan of arrangement.
The combination of Timmins Gold and Newstrike will create an emerging intermediate, Mexican-focused gold producer with a portfolio of high-quality production and development assets all based in Mexico. With the San Francisco providing a solid base of operations, the combined company will have a leading growth profile driven by what Timmins Gold believes are two economically robust development projects with manageable capital requirements, Newstrike's Ana Paula gold project and Timmins Gold's Caballo Blanco gold project.
Under the terms of the Arrangement, Newstrike shareholders will receive 0.9 of a Timmins Gold common share and C$0.0001 in cash for each Newstrike common share, representing the equivalent of C$1.15 per Newstrike Share and a premium of 20.0% based on the closing prices of the Timmins Gold Shares on the Toronto Stock Exchange and the Newstrike Shares on the TSX Venture Exchange on February 13, 2015, and C$1.20 per Newstrike Share and a premium of 22.4% based on the 20-day volume-weighted-average-price of the Timmins Gold Shares on the TSX and the Newstrike Shares on the TSX-V as of February 13, 2015.
The Exchange Ratio implies a total transaction value of approximately C$140 million on a fully-diluted in the money basis. In addition, each outstanding option to purchase a Newstrike Share will be exchanged for an option to purchase a Timmins Gold Share, based upon the Exchange Ratio.
In connection with the Arrangement, Timmins Gold announces that it will undertake a non-brokered private placement of Timmins Gold Shares in an aggregate amount of up to C$10 million at a price of C41.25 per Timmins Gold Share.
Upon completion of the Arrangement, one nominee of Newstrike will be appointed to the Timmins Gold board of directors.
by RTT Staff Writer
http://www.rttnews.com/2457415/timmins-gold-to-combine-with-newstrike-to-create-an-intermediate-gold-procucer.aspx
