Heatherdale Resources Ltd. and Niblack Mineral Development Inc. jointly announce that Heatherdale intends to acquire all of the outstanding shares of Niblack.
On August 23, 2011, Heatherdale, Niblack and certain of their respective subsidiaries entered into a non-binding letter agreement pursuant to which they agreed to carry out due diligence reviews on each other with a view to concluding a transaction by which Heatherdale would acquire all Niblack common shares in exchange for Heatherdale common shares, and agreed to deal exclusively with each other with respect to the transaction until October 23, 2011.
The parties have completed their due diligence reviews and have agreed in principle that, subject to the board, shareholder and court approvals described below, Heatherdale will acquire all of the common shares of Niblack in exchange for Heatherdale shares, on the basis of 0.50 Heatherdale shares per Niblack common share. Based on the current number of outstanding shares in Niblack, Heatherdale anticipates issuing approximately 18 million shares to complete the transaction. Options and warrants that are converted to Niblack shares before closing will be entitled to participate in the transaction. Each unexercised warrant of Niblack will be amended so that it will entitle the holder thereof to purchase a number of Heatherdale shares equal to 50% of the number of Niblack shares subject to such warrant, at an exercise price of $1.20 in the case of warrants that have a current exercise price of $0.45 and $1.73 in the case of warrants that have current exercise price of $0.65. All unexercised options will be cancelled for $0.01 per option.
Heatherdale and Niblack expect to effect the transaction by means of an arrangement under the Alberta Business Corporations Act. The transaction is subject to negotiation of a definitive arrangement agreement, receipt of a favourable fairness opinion by the Niblack board, approval by Heatherdale’s board of directors, and 66-2/3% of votes cast by Niblack’s shareholders and its optionholders and warrantholders, as well as approval of the arrangement by the Alberta Court of Queen’s Bench.
Niblack has engaged Canaccord Genuity Corp. to deliver a fairness opinion in connection with the transaction.
Heatherdale and Niblack currently hold 60% and 40% interests, respectively, in the advanced exploration stage Niblack Project. Significant mineral resources have been outlined in two of the six known copper-gold-zinc-silver volcanogenic massive sulphide (VMS) deposits on the Niblack property that have laid the foundation for engineering and scoping studies that have been initiated in 2011.
“After three years of successfully operating the Niblack Project as a joint venture, the boards of directors of Heatherdale and Niblack have agreed that the best way to efficiently advance development of the Niblack Project is to consolidate project interests into one company,” said Heatherdale Chairman Scott Cousens.
“During this time we have had an excellent working relationship with the professional team at Niblack, and through our joint efforts we have achieved a number of milestones at the Niblack Project over the past 24 months, including a significant increase in mineral resources and establishing the veracity of our geological model through discovery of new zones. Work is now focused on progressing with engineering work toward completion of a Preliminary Economic Assessment for the project.
Having reached the next stage at the Niblack project, we believe that this transaction will provide Niblack investors, along with Heatherdale investors, with the opportunity to participate in the future growth of the combined company,” added Cousens.
The offer will provide Niblack shareholders with increased value provided through ownership of shares in a well structured company which is operated by strong management with years of Alaskan development experience. stated John Williamson, CEO and President of Niblack.
Pursuant to the August 2011 letter agreement, Heatherdale agreed to sole fund the Niblack Project until the earlier of completion of the transaction, or 60 days after the termination of the letter agreement or the definitive agreement relating to the transaction (as applicable), and Niblack will not be required to make any cash contributions to the Niblack Project until such date.
About Heatherdale Resources Ltd.
Heatherdale Resources Ltd. also has a 60% interest, with options to acquire a 100% interest, in a second Alaska prospect that complements Niblack and also provides a longer-term development opportunity. The mid-stage Delta Project is located in east-central Alaska. The 39,840-acre Delta property hosts several massive sulphide occurrences, some with inferred mineral resources, and excellent untested exploration potential.
Heatherdale is associated with the Hunter Dickinson group, a private company with a track record of successful mineral exploration and development projects around the world. For further details, please visit the company website at www.heatherdaleresources.com or contact Investor Services at (604) 684-6365 or within North America at 1-800-667-2114.
About Niblack Mineral Development Inc.
Niblack Mineral Development Inc. is an exploration and development company with a number of mineral rich assets in South East Alaska. The Corporation’s principal asset is the Niblack advanced stage copper-gold-zinc-silver Project. This project is currently in a joint venture operated by Heatherdale.
For further details, please visit the company website at www.niblack.com or contact investor services at (604) 697-2861. Niblack Mineral Development Inc. is a member of the Discovery Group of companies, for more information on the group visit www.discoveryexp.com.
On behalf of the Board of Directors On behalf of the Board of Directors
Patrick Smith John Williamson
President & CEO of Heatherdale President & CEO of Niblack