Timmins Gold Increases Offer for Capital Gold
by Adding US$0.25 Cash per Share
VANCOUVER, B.C. -- Timmins Gold Corp. (TSX-V:TMM) today announced that it has
delivered an increased offer to the Capital Gold Board of Directors for the
merger of Timmins Gold and Capital Gold. Under the increased offer, Capital
Gold shareholders will now receive 2.27 Timmins Gold common shares and
US$0.25 in cash for each share of Capital Gold common stock.
The increased offer provides Capital Gold shareholders with total
consideration of US$5.89 per Capital Gold share and exceeds the value of
the Gammon offer by US$0.47 (or 8.7%) per Capital Gold share, based on
closing prices on March 14, 2011.
"Our increased offer underscores our strong commitment to the merger
of Timmins Gold and Capital Gold and reinforces the clear superiority of
our offer over the proposed sale of Capital Gold to Gammon," stated
Bruce Bragagnolo, CEO of Timmins Gold.
Mr. Bragagnolo continued, "Following
numerous meetings with Capital Gold shareholders, we know there is
widespread support for the merger of Timmins Gold and Capital Gold,
including from some of Capital Gold's largest institutional shareholders.
In light of our increased offer, we urge the Board of Capital Gold to
determine that our new proposal is superior to the Gammon offer and to
withdraw its support for the Gammon transaction. The Gammon transaction
significantly increases Capital Gold shareholders' exposure to underperforming
assets. We are confident that the Board of Capital Gold will support our
increased offer, which now delivers even greater value to its
shareholders."
Timmins will amend the terms of its exchange offer, which has not yet
commenced, for all of the outstanding shares of Capital Gold common stock
to reflect the increased offer.
Sprott Resource Lending Partnership has agreed to
provide Timmins Gold with a C$15.0 million credit line and a C$5 million
working capital facility. Availability under the credit line and working
capital facility is not contingent on completion of the merger of Timmins
Gold and Capital Gold.
PRESERVE YOUR RIGHT TO A BETTER DEAL-
VOTE NOW AGAINST THE PROPOSED GAMMON MERGER
Timmins continues to urge Capital Gold shareholders to preserve their right
to receive the improved economic terms of Timmins' offer by voting AGAINST
the Gammon Deal on the GOLD proxy card. Shareholders who have previously
voted on Capital Gold's white proxy card may obtain assistance in revoking
or changing that vote by contacting Innisfree
M&A Incorporated tool-free at 1-877-800-5182 (banks and brokers should
call collect at 212-750-5833).
TIME IS SHORT AND YOUR VOTE IMPORTANT!
To ensure your vote is received before the meeting,
please vote by telephone or via the Internet.
If you have any questions, or need assistance in voting
your shares, please call our proxy solicitor,
INNISFREE M&A INCORPORATED
TOLL-FREE, at 1-877-800-5182.
Important Information
This press release does not constitute an offer to sell or the solicitation
of an offer to buy any securities or a solicitation of any vote or
approval. This press release relates to a business combination transaction
with Capital Gold proposed by Timmins Gold. This material is not a
substitute for the prospectus/offer to exchange Timmins Gold has filed with
the SEC regarding the exchange offer and will send or give to Capital Gold
stockholders when the exchange offer is commenced or for any other document
which Timmins Gold may file with the SEC and Canadian securities regulators
and send to Timmins Gold or Capital Gold stockholders in connection with
the exchange offer. INVESTORS AND SECURITY HOLDERS OF TIMMINS GOLD AND
CAPITAL GOLD ARE URGED TO READ THE PROSPECTUS/OFFER TO EXCHANGE AND ANY
OTHER DOCUMENTS FILED WITH THE SEC AND CANADIAN SECURITIES REGULATORS
CAREFULLY IN THEIR ENTIRETY, BECAUSE THEY CONTAIN IMPORTANT INFORMATION
ABOUT THE EXCHANGE OFFER. Such documents, as well as solicitation
statements relating to the Consent Solicitation and the Proxy Solicitation,
are available free of charge through the web site maintained by the SEC at
www.sec.gov, by calling the SEC at telephone number 800-SEC-0330, or at the
web site maintained by the Canadian securities regulators at www.sedar.com,
or by directing a request to Timmins Gold at Suite 520---609 Granville
Street, Vancouver, BC, Canada V7Y-1G5 or at www.timminsgold.com.
Timmins Gold and its directors and executive officers and other persons may
be deemed to be participants in any solicitation of proxies from Capital
Gold's shareholders in respect of the proposed transaction with Capital
Gold. Information regarding Timmins Gold's directors and executive officers
is available in a prospectus/proxy statement Timmins Gold filed with the
SEC regarding the proposed transaction. Other information regarding
potential participants in such proxy solicitation and a description of
their direct and indirect interests, by security holdings or otherwise, will
be contained in any proxy statement or other documents filed with the SEC
and Canadian securities regulators in connection with the proposed
transaction.
Caution Regarding Forward-Looking Statements
This press 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," "expect," "plan,
"anticipate," believe," "estimate,"
"predict," "potential," "opportunity" or
"continue" or the negative of these terms or other comparable
terminology. These statements are predictions and involve known and unknown
risks, uncertainties and other factors that may cause our actual results,
production, reserves, level of activity, performance or achievements to be
materially different from any future results, production, reserves, levels
of activity, performance or achievements expressed or implied by such
forward-looking statements. Actual results could also differ materially
because of factors such as Timmins Gold's ability to promptly and
effectively integrate the businesses of Capital Gold and Timmins Gold, the
timing to consummate the proposed transaction and any necessary actions to
obtain required regulatory approvals, and the diversion of management time
on transaction-related issues. While these forward-looking statements, and
any assumptions upon which they are based, 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.
Neither 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.
About Timmins Gold
Focused in Mexico, Timmins Gold Corp. became a gold producer in April 2010
with the commencement of commercial production at its wholly owned San
Francisco Mine in Sonora, Mexico. In addition, the Company has an extensive
portfolio of gold projects in Mexico.
Contacts:
Timmins Gold Corp.
Bruce Bragagnolo
CEO and Director
604-638-8980
bruce@timminsgold.com
www.timminsgold.com
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
Shareholders Call Toll-Free: 877-800-5182
Banks and Brokers Call Collect: 212-750-5833
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