The Transaction is expected to result in a new Company, Thunder Mountain Resources, Ltd. to be listed on the TSX-V exchange. The LOI contemplates that Kenai will acquire approximately 40% and THMG will acquire approximately 60% of a reorganized company. The LOI includes provisions that Kenai and THMG attempt to provide financing for the reorganization of up to $600,000. The Transaction will be subject to due diligence by both parties, development of a definitive agreement between the parties, approval by the shareholders of both companies, and the approval of applicable regulatory bodies. Assuming satisfaction of those conditions, closing would take place no later than April 30, 2010.
The LOI, dated September 8, 2009, between and among Thunder Mountain Gold, Inc. a Nevada corporation, Thunder Mountain Resources Inc., a Nevada Corporation, Thunder Mountain Resources Ltd., a Canadian Corporation to be formed, and Kenai Resources Ltd., a British Columbia company, was filed by the Company as Exhibit 99.1 to its Form 8-K filed on September 9, 2009 and is incorporated by reference into this filing.
Jim Collord, President of THMG, said, “Once the transaction is completed, the structuring of Thunder Mountain with Kenai provides the avenue for growth for our Company and excellent upside for our shareholders. We believe in the management team at Kenai, the advanced gold properties they hold and the opportunity to grow in the Canadian market. This is an excellent move for our Company.”
About Kenai Resources, Ltd.
KENAI is based in Vancouver, Canada, and was formerly Triumph Gold Corporation. They engage in the acquisition, exploration, and development of mineral resource properties, primarily gold and silver, in the United States and they hold interests in two advanced properties located in Malheur County in Eastern Oregon near the Idaho border. KENAI public filings in Canada can be accessed via SEDAR (www.sedar.com). (SEDAR is the System for Electronic Document Analysis and Retrieval, the electronic filing system for the disclosure documents of public companies and investment funds across Canada.)
KENAI’s current status of the gold resources from its advanced gold exploration projects are summarized as follows (based on Canadian reporting standards):
Project Tonnes g/t Au Mineralization-Au Status/Classification
Quartz Mtn. OR [1] 15,050,196 0.80 352,677 Indicated - NI 43-101 Compliant
Hope Butte OR [2] 4,609,600 0.95 141,188 Historical - Not NI 43-101 Compliant
Footnotes:[1] Resources above a 0.34 g/t cutoff with silver converted to gold equivalent using a ratio of 49.5:1 silver to gold. Metallurgical recoveries were not considered[2] These resources are considered historic in nature, do not comply with current NI 43-101 standards, have not been verified by the Company and therefore should not be relied upon. It is uncertain if further exploration will result in the discovery of an economic mineral resource.
About Thunder Mountain Gold, Inc
Thunder Mountain Gold is an exploration company focused on the generation of precious and base metal projects in the Western United States, Mexico, and Alaska. A 74-year old company, Thunder Mountain Gold performs its own natural resource exploration and generates value for shareholders by aggressively developing high-grade, high-quality precious and base metal resources in politically stable mining regions. Investor Relations:
Eric Jones e-mail: eric@thundermountaingold.com Jim Collord e-mail: jim@thundermountaingold.com
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which an offer, so
Forward-Looking Statements
Statements made which are not historical facts, such as anticipated production, exploration results, costs or sales performance are “forward-looking statements”, and involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected or implied. These risks and uncertainties include, but are not limited to, metals prices volatility, volatility of metals production, exploration project uncertainties, industrial minerals market conditions and project development risks. Refer to the Company’s Periodic Filings for a more detailed discussion of factors that may impact expected future results. Thunder Mountain Gold undertakes no obligation to publicly update or revise any forward-looking statements.
Cautionary Note to Investors
The United States Securities and Exchange Commission (“SEC”) permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce.
(Kenai Release below.)
KENAI RESOURCES AND THUNDER MOUNTAIN GOLD ANNOUNCE PLANNED MERGER
September 10, 2009: Kenai Resources Ltd. (“Kenai”) (TSX-V: KAI) and Thunder Mountain Gold, Inc. (“THMG”) (OTCBB: THMG) announced today that they have entered into a Letter of Intent dated September 8, 2009 (the “LOI”) for the arm’s length acquisition by Kenai of 100% of the common shares of THMG’s wholly-owned subsidiary – Thunder Mountain Resources Inc. (“THMR), or other business combination of the parties (the “Transaction”). The Transaction merger between the two Companies will result in Kenai being renamed Thunder Mountain Resources, Ltd., maintaining its listing on the TSX Venture Exchange (the “TSX-V”), and holding 100% of the property portfolio of both pre-merger companies. The Transaction will be subject to approval by the shareholders of both companies and to the approval of applicable regulatory bodies.
Daniel Kunz, President of Kenai, said of the merger, “Combining the exploration and development properties of Kenai and Thunder Mountain creates a property portfolio with two advanced gold exploration projects; one advanced copper, zinc, silver, gold exploration property; and several early exploration stage gold properties all located in Nevada and adjacent areas of southwest Idaho and southeastern Oregon in the USA. The combined management and executive team bring extensive exploration, development and financing capability to the transaction and will provide excellent upside for the shareholders of both companies. This is an excellent move for each Company.”
Kenai holds an interest in two mineral property lease agreements to acquire 100% ownership rights to two gold properties located in Malheur County in southeastern Oregon near the Idaho border. The largest property is the Quartz Mountain Gold project (formerly known as the Jessie Page project) and the other property is the Hope Butte Gold project.
Hope Butte Highlights
Chevron Minerals explored Hope Butte from 1985 to 1990 and then by a joint venture with Horizon Gold Corporation in 1991. Chevron Minerals drilled 41 reverse circulation holes on the project and the Horizon/Chevron joint venture drilled 73 core holes and metallurgical samples were collected and tested for recoveries. Chevron drilled into a deep high grader feeder zone at drill hole 21-32 intersecting 4.6 meters (14 feet) of 1.04 ounces per ton (35.7 grams per tonne (“g/t”)).
A 2002 report prepared by Harold M. Jones & Associates Inc. states that the property hosts epithermal gold mineralization in a setting analogous to the Sleeper deposit in Nevada. The report states that the Horizon Gold resource calculation, using a 0.015-ounce per ton cutoff (0.51 g/t), shows 5,070,560 tons grading 0.028 ounces per ton (0.96 g/t) yielding 141,188 ounces of gold.
The Hope Butte resources are considered historic in nature, do not comply with current NI 43-101 standards, have not been verified by the Company and therefore should not be relied upon. It is uncertain if further exploration will result in the discovery of an economic mineral resource.
Quartz Mountain Highlights
The Indicated Resource is 15.0 million tonnes containing 281,439 ounces of gold at a grade of 0.017 ounces per ton (0.58 g/t) plus 3,526,261 ounces of silver at a grade of 0.21 ounces per ton (7.29 g/t) above a cutoff of 0.001 ounces per ton (0.34 g/t) gold.
The Indicated Resource of 15.0 million tonnes has gold-equivalent values of 352,677 ounces gold at an average grade equivalent of 0.023 ounces per ton (0.80 g/t) gold obtained by converting the silver to gold values using a ration of 49.5:1 silver to gold. Metallurgical recoveries were not considered.
The highest assays in the database are 0.44 ounces per ton (14.95-g/t) gold plus 3.1 ounces per ton (106.3 g/t) silver.
An apparent high-grade feeder zone has been intersected in several historical drill holes.
Kenai currently has a NI 43-101 resource estimate on file with SEDAR for the Quartz Mountain Oregon gold project. The study provides a basis to continue expanding the gold and silver resource at Quartz Mountain with the mineralization open to the west and northeast. The property has the potential for a higher-grade feeder zone that is largely unexplored, and several secondary targets that require further work. The report indicates that there is the potential to significantly expand the existing resource base at Quartz Mountain.
Thunder Mountain Gold Inc.
THMG is a 74-year old U.S.-based exploration company focused on the generation of precious and base metal resources in the Western United States. THMG and its wholly-owned subsidiary, THMR, has been involved in the exploration, acquisition, and development of mineral resource properties since 2005, after the sale of its patented and unpatented claims located in the Thunder Mountain Mining District, Valley County, Idaho. THMG/THMR’s current properties consist of its flagship wholly-owned South Mountain Mine in Owyhee County, Idaho, and five other mineral exploration properties in Idaho, Nevada, and Arizona. THMG and THMR are Nevada corporations, and THMG is a registrant in the United States under the United States Securities and Exchange Act of 1934.
THMG’s South Mountain Mine has been mined since the 1870s, with the majority of production of zinc, silver, lead, copper and gold during World War II. Extensive underground workings were developed at the mine with most of the ore being direct shipped to a Utah smelter. THMG purchased South Mountain Mines, Inc. in late 2007, and has been exploring and securing land positions surrounding the 17 patented claims that form the core of the holdings. South Mountain Mines had owned and explored the claims during the period 1977 until THMG acquired them in 2007, and had expended a reported $6 million on expanding the underground workings, metallurgical testing and developing a feasibility study. To date, THMG has expended approximately $1.7 million at South Mountain, including the purchase, acquisition of leases on surrounding private parcels totaling 868 acres, claim staking, rehabilitating the underground workings, core drilling, mapping and sampling.
THMG recently announced that it has identified anomalous gold mineralization in previously unexplored, oriented parallel to copper, zinc, silver, gold, and lead mineralization, located one-half mile to the north of the main South Mountain Mine. The newly identified gold targets significantly raise the potential for discovery of gold resources on the property. The anomalous gold mineralization was discovered through rock chip sampling and a soil orientation survey on private land leased by THMG. All assays were completed by ALS Chemex in Elko, Nevada. This mineralization demonstrates that there is a potential for deeper base metal-gold mineralization associated and a larger gold system on THMG’s South Mountain holdings.
The Planned Transaction
Pursuant to the LOI, prior to the closing of the Transaction (the “Closing”), Kenai will consolidate its issued and outstanding common shares (the “Kenai Shares”), including outstanding warrants and options, on the basis of a two old for one new Kenai Share. Additionally, Kenai may advance $200,000 (“Transactional Funding Tranche”) to THMG, and hopes to raise additional working capital through the exercise of existing warrants. The advance by Kenai is interest bearing and refundable to Kenai according to certain break-apart provisions triggered by the following circumstances:
In the event that the Transaction is not completed due to failure to meet the certain conditions, any funding provided by Kenai to THMG shall be considered as the paid funding of a joint venture by Kenai on THMG/THMRs exploration and mining projects controlled by THMG/THMR on the date of the LOI for a 10% participating ownership. As an alternative to the joint venture mentioned above, by mutual agreement, THMG shall also have the option to repay all or part of the Transactional Funding Tranche, plus interest at 10%, to Kenai within a period of six months of December 31, 2009.
Kenai will issue to THMG’s shareholders approximately 19,000,000 Kenai Shares on a post-consolidation basis in exchange for all of the issued and outstanding shares of THMR. Upon Closing, Kenai will continue as a mining issuer on the TSX-V and will change its name to Thunder Mountain Resources Ltd., subject to regulatory approvals.
Upon signing of the LOI, THMG will solicit the conversion of up to approximately 2,885,000 of its outstanding warrants into common shares of THMG (the “Warrant Conversion”) prior to the Closing. The securities contemplated to be issued in the Warrant Conversion have not been and will not be registered under the Securities Act of 1933, as amended, or any state securities laws, and the securities may not be offered or sold in the United States absent registration or an applicable exemption from such registration. Proceeds of the warrant equity injections will be used to complete the Transaction, and complete the exploration activities to advance the property portfolio.
The LOI will be superseded by a definitive agreement to be negotiated between the parties. The parties have agreed to use every reasonable effort to complete the proposed Transaction as soon as practicable, the completion of which is subject to certain conditions, including board approval and shareholders’ approval of the Transaction to be obtained by both Kenai and THMG; completion of a due diligence investigation; execution of a Definitive Agreement; satisfaction of all conditions to closing set forth in the Definitive Agreement; and receipt of the required approvals under British Columbia and Nevada corporate law. Completion of the proposed Transaction is also subject to approval from the TSX Venture Exchange, and the U.S. Securities and Exchange Commission, but in no event later than April 30, 2010. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Upon signing of the LOI, an Interim Management Committee will be formed to oversee progress on the Transaction, manage interim period exploration and acquisition activities, and business development with third parties for possible financing or ventures. The Interim Management Committee will consist of members nominated by both companies.
Investors are cautioned that, except as disclosed in the management information circulars or filing statements to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon.
On behalf of the Board of Directors,
“Daniel Kunz”
Daniel Kunz
President & CEO
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.
Forward-Looking Statements: Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed and elsewhere in Kenai’s periodic filings with Canadian securities regulators. Such information contained herein represents management’s best judgment as of the date hereof based on information currently available. Kenai does not assume the obligation to update any forward-looking statement.