Sutter currently holds a number of precious metals properties in
Sutter's assets cover 3.2 miles of what has been described as "the most productive portion" of
The Implementation Agreement, which will be filed under Tyhee's and Sutter's profiles on SEDAR, follows one year of extensive due diligence by Tyhee's management and technical team, including comprehensive discussions, site inspections and a review of Sutter's financial situation. Management believes that gold production can be achieved at the
Following completion of the Transaction, Tyhee's President and CEO,
Upon completion of this transaction, Tyhee's core assets will include majority ownership of Sutter, which holds 100% of the
The board of directors of both Sutter and Tyhee believe that the Transaction will benefit each of the companies and their shareholders, and accordingly, the directors of both boards have approved the Transaction.
Tyhee proposes to acquire certain of RMB's current interests in Sutter pursuant to the Implementation Agreement as follows:
1. Tyhee will acquire all of the current stock position in Sutter held by RMB and/or its affiliates (58,216,820 common shares) at
C$0.02per share, paid in cash on closing of the Transaction; 2. RMB will reduce its debt exposure to Sutter by US$8 million, from no more than US$40 millionto no more than US$32 millionby converting the US$8 millioninto 108,454,603 Sutter common shares at a deemed price of $0.0788per share. Tyhee will then acquire such shares at C$0.02per share, paid in cash on closing of the Transaction; and, 3. RMB will assign to Tyhee up to US$17 millionof RMB's debt exposure, with RMB continuing to retain a US$15 millionloan to Sutter, in consideration for the following: i. 90 million Tyhee common shares issued from treasury; ii. US$4 millionin cash; iii.a covenant by Tyhee to consummate an additional financing to raise the remaining balance necessary to achieve commercial production at Sutter' s Lincoln-Comet mine, to a maximum of US$ 17 million; and iv. a covenant by Tyhee to cause Sutter to make interest payments, principal repayments, and mandatory prepayments on the retained US$15 millionloan from RMB to Sutter on a first ranking basis.
This transaction does not require a vote by the shareholders of either Tyhee or Sutter.
Closing of the Transaction is also subject to customary closing conditions, including receipt of the approval of the TSX-V and any other regulatory approvals. In addition, the closing of the Transaction is subject to the completion of certain debt restructurings by Sutter, noted below, and the completion of a minimum of
The Implementation Agreement contains a non-solicitation covenant on the part of RMB and Sutter, subject to customary fiduciary out provisions. The Implementation Agreement also provides Tyhee with the right to match any potential third party proposal. Sutter is permitted to terminate the Implementation Agreement under certain conditions, including the payment of a
In connection with the Transaction, Tyhee intends to complete, through a previously announced (see Tyhee release dated
a. Face value:
US$1,000denominations. b. Term: Five (5) years. c. Interest Rate: Eight (8) percent per annum, payable annually in cash or in ounces of gold, at the election of the holder of the Convertible Debenture. d. Security: Secured against the assets of Tyhee NWT Inc., Tyhee's wholly owned Northwest Territoriessubsidiary. e. Conversion: Principal to be convertible to Tyhee common shares at $0.30per Tyhee common share. f. Redemption: Principal amount to be redeemable by Tyhee after 24 months, subject to payment of premium. g. In addition, if at any time after 24 months from the issuance of the Convertible Debentures gold trades at greater than US$2,000per ounce for a period of 30 consecutive business days or more, the holder would have the option, subject to additional conditions to be determined, to convert the principal amount outstanding on the SPV Loan to gold, at the rate of one ounce for each US$2,000outstanding (delivery terms and timing of repayment remain to be determined), or payment in cash of an amount equal to the principal owing.
Tyhee is also pleased to announce that it has proposed a separate Private Placement financing of 10,000,000 units at
Terms of Loans to Sutter
US$15 millionloan from RMB to Sutter - RMB will retain a secured US$15 millionamortizing loan to Sutter. RMB and Sutter would amend and restate the terms of its existing US$40 milliondebt facility to provide for the following terms: i. US$15 millionprincipal amount; ii. interest at 12% per annum, capitalizing until July 31, 2015and paid monthly commencing on August 31, 2015; iii.repayment in up to 48 consecutive monthly instalments of equal amounts, subject to certain conditions and adjustments, commencing on August 31, 2015; and, iv. such loan would be senior secured debt to Sutter and any other Sutter debt would be fully subordinated on terms satisfactory to RMB. b. Approximately US$17 millionnote payable by Sutter to Tyhee - RMB will assign to Tyhee US$17of existing indebtedness owing under the promissory note dated December 31, 2013issued by Sutter to RMB and Tyhee and Sutter will enter into a new promissory note having terms similar to the note issued to RMB. c. Funds to Restart Production - Further advances ("Tyhee Advances") to Sutter by Tyhee or its related entities would be made up to US$17 millionon the same terms as the SPV Loan that would be provided to Tyhee, except that (i) interest on Tyhee Advances would accrue at 12% per annum; and (ii) security for the Tyhee Advances will be equal ranking to the Tyhee note described above.
The proposed transaction would benefit both Tyhee and Sutter shareholders:
-- For Sutter, improved financial standing, with significantly improved liquidity and access to capital to properly capitalize completion of development of the
Lincolnmine and mill to achieve commercial production. For Tyhee, enabling the execution of its strategy of building its production profile through additional acquisitions with near-term production potential; -- For Tyhee and Sutter, being transformed into a developing precious metals production company with gold production planned from Lincoln; -- For Tyhee and Sutter, significantly enhanced development and exploration upside across a diverse portfolio of precious metals properties, including the Keystone deposit in Californiaas well as the large undeveloped gold resources (Feasibility Study - August 2012) at the Yellowknife Gold Project, NWT, -- For Tyhee and Sutter, utilizing Tyhee's highly experienced underground mining team that will be key to successful operations at Lincoln; and, -- For Sutter, access to an expanded management team that includes complementary experience in exploration, development, operations, and financing.
Tyhee has been aggressively pursuing new opportunities to enable the Company to benefit from gold production in 2014. This revised corporate strategy is aimed at enhancing Tyhee's shareholder value by taking advantage of corporate project opportunities available in the current challenged resource investment environment to generate cash-flow, accelerate growth and provide a strong platform on which to build a new multi-project gold mining company. At the same time, the Company will continue to progress its YGP, an advanced stage wholly-owned gold project in the development and permitting stage.
In line with this strategy, Tyhee has announced plans to create a special purpose vehicle (the "SPV"), through which funds of up to
Up to 10 per cent of the funds raised through the SPV are to be used for general corporate purposes, including the ongoing development of
According to the study's authors -
Sutter has two projects: the
This news release contains "forward-looking information" under Canadian securities law. Any information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words such as "expect", "anticipate", "believe", "plans", "estimate", "scheduling", "projected" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information. Forward-looking information relates to, among other things: the price of silver and gold; the accuracy of mineral resource and mineral reserve estimates; the ability of the Company to finance its operations and capital expenditures; future financial and operating performance including estimates of the Company's revenues and capital expenditures and estimated production.
Forward looking statements made in this news release include all statements related to: the Company's intention to establish a special purpose vehicle; the Company's ability to implement the Company's corporate strategy; the anticipated closing of the Transaction; the anticipated restructuring of the Lincoln Mine operations, the plan to start and expand production from the Lincoln Mine; the planned cash injection into Sutter; potential for additional acquisitions by the Company; becoming the next generation of multi project gold mining company; the heightened recognition of the Company resulting from the Transaction; the potential benefits of the Transaction to shareholders of the Company and Sutter, including improved financial standing, liquidity, access to capital and near-term production potential; and the continued progress of the
Factors that could cause future events to differ from those anticipated in forward looking statements include: inability to identify merger or acquisition opportunities, or once identified, negotiate a transaction on terms acceptable to Tyhee; inability to meet the conditions provided for in the Implementation Agreement, including obtaining sufficient funding for the acquisition and the proposed cash injection; delays in obtaining approvals for acquisition or merger activity, including approval of the
Although Tyhee has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking information, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, any proposed transaction could be modified, restricted or not completed, and the results or events predicted in these forward looking statements may differ materially from actual results or events. Accordingly, readers should not place undue reliance on forward-looking information.
The forward-looking information in this news release is made as of the date of this news release, and Tyhee disclaims any intention or obligation to update or revise such information, except as required by applicable law. This news release does not constitute an offer to buy any securities or a solicitation of any vote or approval or a solicitation of an offer to sell any securities.
FOR FURTHER INFORMATION PLEASE CONTACT: GT Investor Relations Inc.
Greg TaylorO: 905 337-7673 C: 416 605-5120 firstname.lastname@example.org Tyhee Gold Brian BriggsPresident 604 681-2877 email@example.com Amanda MillerChief Financial Officer 303 238 1438 ext. 223 firstname.lastname@example.org Source: Tyhee Gold Corp.