CALGARY, Oct. 7, 2014 /CNW/ - Montana Exploration Corp.
("MTZ") (TSXV:MTZ) is pleased to announce that MTZ will
acquire Brilliant Resources Inc. ("Brilliant") (TSXV:BLT)
under a Plan of Arrangement subject to approval by the shareholders
of both companies. Brilliant presently has approximately
$8 million of free cash that will
enable MTZ to implement the first phase of a financing plan to
consolidate its interests in the Shaunavon Play in Northern Montana and to drill wells offsetting
its recent Upper Shaunavon oil discovery. To facilitate the
financing, certain shareholders of MTZ and Brilliant will enter
into lockup agreements and the shareholders of MTZ who have funded
recent operations through the subscription for convertible
debentures will cause those debentures to be exchanged for common
shares of MTZ at closing. The number of MTZ shares to be issued to
the Brilliant shareholders is to be determined based upon the
adjusted net working capital of Brilliant. The adjusted working
capital of Brilliant will be multiplied by 1.15 and the share price
of MTZ will be the lesser of the price per share at which the next
material financing of common shares of Montana is completed and $0.25. As part of the transaction, Management of
MTZ will continue to pursue the $80
million legal action that Brilliant has against the Republic
of Equatorial Guinea. Ivory Resources Inc., a wholly owned
subsidiary of Brilliant, has requested arbitration before the
International Chamber of Commerce and the net proceeds of any
recovery will be shared between MTZ and the current shareholders of
Brilliant who will receive special distribution rights upon
closing.
MTZ has previously arrived at an agreement to purchase 36,000
net acres held by its joint venture partner in Montana for $4 million
USD to re-establish MTZ's 100% working interest across the
joint venture block. The acquisition will increase the impact of
new development drilling activities on MTZ and enhance the working
interest of the company on future exploration activities. Brilliant
will advance $4 million Cdn. to MTZ
to facilitate closing under a secured loan bearing 10% interest
that will be consolidated upon completion of the Plan of
Arrangement.
The board of directors of MTZ supports the business combination
based upon Brilliant's free cash, strong shareholder base,
litigation upside, management support and integration with MTZ's
financing plan. MTZ is producing from the Upper Shaunavon and plans
to exploit targets in both the Upper Shaunavon and the Lower
Shaunavon through a combination of vertical drilling and horizontal
drilling.
Forward Looking Statements
This press release contains statements that constitute
"forward-looking information" or "forward-looking" statements"
(collectively "forward-looking information") within the meaning of
applicable securities legislation. Forward-looking information is
often, but not always, identified by the use of words such as
"anticipate", believe", "expect", "plan", "intend", "forecast",
"target", "project", "guidance", "may", "will", "should" "could",
"estimate", "predict" or similar words suggesting future outcomes
or language suggesting an outlook.
Various assumptions were used in drawing the conclusions or
making the forecasts and projections contained in the
forward-looking information contained in this press release. In
respect of the forward-looking statements and information
concerning the anticipated completion of the Arrangement,
Montana has provided such in
reliance on certain assumptions that they believe are reasonable at
this time, including the necessary regulatory, stock exchange and
other third party approvals; and the ability of the parties to
satisfy, in a timely manner, the other conditions to the closing of
the Arrangement.
Forward-looking information is based on current expectations,
estimates and projections that involve a number of risks, which
could cause actual results to vary and in some instances to differ
materially from those anticipated by Montana and described in the forward-looking
information contained in this press release. Undue reliance should
not be placed on forward-looking information. The material risk
factors include, but are not limited to: failure of Montana to obtain necessary regulatory, stock
exchange and other third party approvals; the possibility that
government policies or laws may change or governmental approvals
may be delayed or withheld; and Montana's ability to implement its business
strategy. Readers are cautioned that the foregoing list of risk
factors is not exhaustive.
The forward-looking statements and information contained in this
press release are also affected by the risk factors,
forward-looking statements and assumptions and uncertainties
described in Montana's reports on
file with applicable securities regulatory authorities and which
may be accessed on Montana's each
party's SEDAR profile at www.sedar.com. Readers are cautioned
that the foregoing list of factors that may affect future results
is not exhaustive. When relying on our forward-looking
statements to make decisions with respect to Montana, investors and others should carefully
consider the foregoing factors and other uncertainties and
potential events. Furthermore, the forward-looking statements
contained in this press release are made as of the date of this
press release and Montana does not
undertake any obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
applicable law. The forward-looking statements contained in
this press release are expressly qualified by this cautionary
statement.
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.
SOURCE Montana Exploration Corp.