McEwen Mining Inc. (NYSE: MUX)(TSX: MUX) has recently unveiled its plan to enhance its portfolio in Nevada's mining sector through the acquisition of Timberline Resources Corporation (TSXV: TBR)(OTCQB: TLRS). This strategic move marks a significant step forward for McEwen and underscores its commitment to expanding its presence in key mining regions.
Under the definitive agreement and plan of merger, McEwen will acquire all issued and outstanding shares of Timberline, consolidating its position in Nevada's rich mining landscape. Timberline shareholders will receive 0.01 of a share of McEwen's common stock for each share of Timberline's common stock, reflecting a value of US$0.102 per Timberline share. This represents a substantial premium of 132% over Timberline's 20-day volume-weighted average price on the OTCQB.
The transaction, valued at US$18.8 million, is subject to customary conditions, including regulatory and stock exchange approvals, as well as approval from Timberline's shareholders holding a majority of its outstanding shares. Timberline's board of directors has unanimously recommended the Transaction, and key stakeholders, representing approximately 40% of Timberline's outstanding shares, have entered into voting and support agreements with McEwen.
Additionally, the Agreement includes standard deal-protection provisions, with Timberline agreeing not to pursue alternative acquisition opportunities. In the event of termination to accept a superior offer, Timberline will be obligated to pay McEwen a termination fee of US$400,000.
Furthermore, existing Timberline warrants and stock options will be converted into McEwen shares based on the Exchange Ratio, providing continuity for Timberline shareholders post-acquisition.
McEwen's acquisition of Timberline underscores its strategic vision and commitment to unlocking value for shareholders. By bolstering its presence in Nevada, McEwen aims to capitalize on the region's significant mineral potential and drive long-term growth.
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