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
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
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
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
'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,
project toward feasibility and to initiate drilling at the Trout Creek gold project in
, a joint exploration agreement with Newmont Mining Corporation.
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
per share for total proceeds of up to
. 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.