VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 21, 2011) -
NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA
Timmins Gold Corp. (TSX:TMM) ("Timmins Gold" or the "Corporation") is pleased to announce that it has closed its previously announced brokered private placement (the "Private Placement") of 25,205,090 special warrants ("Special Warrants") exchangeable into common shares of the Corporation ("Common Shares") previously issued to Pacific Road Resources Fund A, Pacific Road Resources Fund B and Pacific Road Holdings NV (each a "Pacific Road Entity" and collectively the "Pacific Road Entities"). The price per Special Warrant was $2.51 (the "Price"). The Private Placement was completed pursuant to an agency agreement dated July 21, 2011 (the "Agency Agreement") among the Corporation, the Pacific Road Entities, M Partners Inc. ("M Partners"), National Bank Financial Inc. (together with M Partners, the "Co-Lead Agents") and Paradigm Capital Inc. (together with the Co-Lead Agents, the "Agents").
The Special Warrants are governed by a special warrant indenture dated July 21, 2011 (the "Special Warrant Indenture") between the Corporation, Computershare Trust Company of Canada, the Pacific Road Entities and the Co-Lead Agents. Each Special Warrant entitles the holder thereof to receive upon exchange, following the Qualification Date (as defined below), and at no additional cost, one Common Share of the Corporation owned by the Pacific Road Entities. The Special Warrants will be automatically exchanged (the "Automatic Exchange", and together with the Private Placement, the "Offering") on the third business day after the date a decision document is issued by the British Columbia Securities Commission under National Policy 11-202 - Process for Prospectus Reviews in Multiple Jurisdictions, evidencing that the securities regulatory authority in each of the Provinces of British Columbia, Ontario and Nova Scotia has issued a receipt for a (final) short form prospectus of the Corporation (the "Final Prospectus") to qualify the distribution of the Common Shares (the "Qualification Date"). If the Qualification Date has not occurred on or before 5:00 p.m. (Toronto time) on August 31, 2011 (the "Qualification Deadline"), the funds representing the aggregate Price paid by each holder of Special Warrants will be returned to such holder unless, pursuant to and subject to the conditions set out in the Agency Agreement and the Special Warrant Indenture, the holders of a specific minimum of Special Warrants elect to complete the exchange of the Special Warrants for the Common Shares subject to applicable Canadian securities laws restrictions for private placements.
The aggregate net proceeds of the Private Placement, after deducting certain expenses of the Private Placement and the Agents' fee, will be paid by the Corporation to the Pacific Road Entities in consideration for the Pacific Road Entities delivering the Common Shares to purchasers of the Special Warrants upon exchange of the Special Warrants. For greater certainty, none of the proceeds of the Private Placement are payable to the Corporation.
The Agents will receive a cash fee from the proceeds payable to the Pacific Road Entities equal to 4% of the gross proceeds from the sale of the Special Warrants. No commission or fee is payable to the Agents or otherwise by the Pacific Road Entities in connection with the distribution of the Common Shares of the Corporation upon exchange of the Special Warrants.
Pursuant to the Agency Agreement, the Pacific Road Entities and the Corporation agreed to each pay approximately 50% of the expected expenses of the Offering.
The Special Warrants will be subject to hold periods expiring on November 22, 2011 under Canadian securities laws and the policies of the Toronto Stock Exchange. None of the securities issued have been registered under the United States Securities Act of 1933, as amended (the "1933 Act"), and none of them have been or may be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there by any sale of the securities in any state where such offer, solicitation, or sale would be unlawful.
The Pacific Road Entities' Common Share holdings in the Corporation prior to the Private Placement equalled 25,205,090 Common Shares, or 18.34% of the issued and outstanding Common Shares of the Corporation. Provided the conditions to the exchange of Special Warrants for Common Shares set out in the Special Warrant Indenture are satisfied, after the Exchange the Pacific Road Entities will own no Common Shares in the Corporation. The Pacific Road Entities may or may not purchase or sell securities of the Corporation in the future on the open market or in private transactions, depending on market conditions and other factors. A copy of the early warning report filed in connection with the Private Placement is available on the Corporation's profile on SEDAR at www.sedar.com or may be obtained by contacting Greg Dick at +61 2 9241 1000.
Caution Regarding Forward-Looking Statements
This News Release contains forward-looking statements. Forward-looking statements are statements which relate to future events. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggestions herein. Except as required by applicable law, Timmins Gold does not intend to update any forward-looking statements to conform these statements to actual results.
About Timmins Gold
Focused solely in Mexico, Timmins Gold is in commercial gold production at its wholly owned San Francisco gold mine in Sonora, Mexico. The mine is a past-producing open pit heap leach operation. Timmins Gold has forecast production at a rate in excess of 100,000 ounces of gold per year at a life of mine cash cost of approximately U.S. $489 per ounce (Micon International NI 43-101F1 Technical Report dated November, 2010).
About the Pacific Road Entities
The Pacific Road Entities are private equity funds investing in the global mining industry. They provide expansion and buyout capital for mining projects, mining related infrastructure and mining services businesses located throughout resource-rich regions of the world. The Pacific Road Entities are managed or advised by Pacific Road Capital Management Pty Ltd ("PRCM"). The PRCM team, located in Sydney, Australia, San Francisco and New York, USA, is comprised of experienced mining investment professionals that have extensive knowledge and experience in the mining and infrastructure sectors, including considerable operating, project development, transactional and investment banking experience. For further information on the Pacific Road Entities and PRCM, please go to their website at www.pacroad.com.au.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.