Niblack Mineral Development Inc. (TSX VENTURE:NIB) ("Niblack" or
the "Company") and Heatherdale Resources Ltd. (TSX VENTURE:HTR)
("Heatherdale") announced on October 5, 2011 that they had entered
into a non-binding letter of agreement providing for Heatherdale to
acquire all of the outstanding common shares of Niblack by way of a
plan of arrangement (the "Arrangement") under the Business
Corporations Act (Alberta).
Niblack is pleased to announce that on October 25, 2011 it
entered into a definitive arrangement agreement (the "Arrangement
Agreement") with Heatherdale which provides that Heatherdale will
acquire all of the common shares of Niblack in exchange for
Heatherdale shares, on the basis of 0.50 Heatherdale share per
Niblack common share. Based on the current number of Niblack shares
outstanding, Niblack anticipates that approximately 18 million
Heatherdale shares will be issued to complete the transaction.
Options and warrants of Niblack that are exercised before closing
will also be entitled to participate in the transaction. Each
unexercised warrant outstanding at closing will be amended such
that it will entitle the holder thereof to purchase the number of
Heatherdale shares equal to 50% of the number of Niblack shares
subject to such warrant, at an exercise price of C$1.20 in the case
of warrants that have a current exercise price of C$0.45 and C$1.73
in the case of warrants that have a current exercise price of
C$0.65. All unexercised options will be cancelled for C$0.01 per
option.
The Arrangement is subject to customary closing conditions,
including the approval of 66 2/3% of the votes cast by
shareholders, optionholders and warrantholders of Niblack (each
voting separately), approval of the Arrangement by the Alberta
court and regulatory approvals (including the approval of the TSX
Venture Exchange ("TSX-V")).
Under the terms of the Arrangement Agreement, Niblack has agreed
that it will not solicit or otherwise participate in any
discussions regarding any merger or other arrangement or sale of
20% or more of its common shares or assets representing 20% of more
of the book value of Niblack's consolidated assets until the
Arrangement Agreement is terminated in accordance with its terms.
Niblack has also granted Heatherdale a right to propose an
amendment to the terms of the Arrangement should Niblack receive a
superior proposal from another party.
The Arrangement Agreement provides for a C$300,000 break fee,
which would be payable by Niblack to Heatherdale in certain
customary events, such as if the Niblack board of directors
withdraws its support for the Arrangement, if Niblack
securityholders do not approve the Arrangement in certain
circumstances and Niblack later completes or accepts another
acquisition proposal, or if Niblack enters into a definitive
written agreement with respect to a superior proposal.
The Arrangement Agreement also provides that if Niblack fails to
complete a private placement of up to 2,500,000 shares for
aggregate proceeds of not less than C$500,000 by November 15, 2011,
Heatherdale may make available to Niblack a loan of up to C$150,000
to pay operating and transaction expenses.
The share consideration offered by Heatherdale pursuant to the
Arrangement Agreement represents an effective purchase price of
C$0.26 per Niblack common share based on the 20-day volume-weighted
average price of Heatherdale common shares on the TSX-V for the
period ended October 25, 2011. The Heatherdale share consideration
being offered represents a C$0.02 premium to the volume-weighted
average price of Niblack common shares on the TSX-V for the 20-day
period ended October 25, 2011 and a C$0.10 premium based on the
closing price of the Niblack common shares on the TSX-V on October
4, 2011, the last trading day prior to the announcement of the
Arrangement.
The directors and officers of Niblack have entered into voting
support agreements with Heatherdale under which they have agreed,
subject to the terms and conditions contained therein, to vote an
aggregate of 2,848,029 common shares, 2,175,000 stock options and
544,000 warrants of Niblack held or controlled by them in favour of
the Arrangement. This represents approximately 7.9% of the
outstanding common shares, 74.3% of the outstanding options and
13.2% of the outstanding warrants of Niblack.
Canaccord Genuity Corp. has provided a fairness opinion to the
Niblack board to the effect that the consideration offered for the
Niblack shares is fair, from a financial point of view, to the
Niblack shareholders.
The board of directors of Niblack, after consultation with
Niblack's financial and legal advisors, has determined that the
Arrangement is in the best interests of Niblack and is fair to the
Niblack securityholders, and unanimously recommends that Niblack
securityholders vote in favour of the Arrangement.
Niblack is in the process of preparing an information circular
relating to the Arrangement. Niblack currently anticipates that the
information circular will be mailed to its securityholders in
mid-November and that a special meeting of securityholders to
consider the Arrangement will be held on or about December 15,
2011. Subject to obtaining securityholder and court approvals, it
is expected that the Arrangement will be completed prior to the end
of December.
About Niblack Mineral Development Inc.
Niblack Mineral Development Inc. (TSX VENTURE:NIB) is an
exploration and development company with a number of mineral rich
assets in South East Alaska. The Company's principal asset is its
interest in the advanced stage copper-gold-zinc-silver Niblack
Project. This project is currently in a joint venture operated by
Heatherdale.
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
John Williamson, President & CEO of Niblack
This release includes certain statements that may be deemed
"forward-looking statements". All statements in this release, other
than statements of historical facts, that address exploration
drilling, exploitation activities and events or developments that
the Company expects, including the completion of the acquisition
described herein, are forward-looking statements. Although the
Company believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are
not guarantees of future events or performance and actual results
or developments may differ materially from those in the
forward-looking statements. Factors that could cause actual results
to differ materially from those in forward-looking statements
include market prices, exploitation and exploration successes,
continuity of mineralization, potential environmental issues and
liabilities associated with exploration, development and mining
activities, uncertainties related to the ability to obtain
necessary permits, licenses and title and delays due to third party
opposition, changes in government policies regarding mining and
natural resource exploration and exploitation, continued
availability of capital and financing, general economic, market or
business conditions and any failure to obtain the shareholder and
court approvals, described hereinabove, which are necessary to
complete the transaction herein described. Investors are cautioned
that any such statements are not guarantees of future events or
performance and actual results or developments may differ
materially from those projected in the forward-looking statements.
For more information on the Company, investors should review the
Company's continuous disclosure filings that are available at
www.sedar.com.
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.
Contacts: Niblack Mineral Development Inc. Investor Services
(604) 697-2861www.niblack.com
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