Timmins Urges Board of Capital Gold not to
Postpone Capital Gold Special Meeting: Let the Shareholders Speak!
VANCOUVER, B.C. --
Timmins Gold Corp. (TSX-V:TMM). In an appearance on Canada's
Business News Network this afternoon, the CEO of Gammon Gold Inc. stated:
"We will announce tomorrow when the Capital Gold special meeting will
be, but it will be this month." It seems that the CEO of Gammon
intends to postpone the special meeting of the shareholders of Capital Gold
Corporation.
WHO IS RUNNING CAPITAL GOLD:
THE CAPITAL GOLD BOARD OR THE CEO OF GAMMON?
Timmins has repeatedly raised concerns regarding the process by which the
Capital Gold Board of Directors selected Gammon's proposal, a process that
Timmins believes favored Gammon over all other bidders. Such concerns are
exacerbated by the statement of the Gammon CEO. Why would the Gammon CEO be
advising Capital Gold shareholders that Gammon would be announcing the
postponement of the special meeting of Capital Gold shareholders? Gammon
does not own Capital Gold -- the Capital Gold shareholders do.
LET THE SHAREHOLDERS OF CAPITAL GOLD DECIDE
Timmins announced earlier today that it had 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$5.80 per Capital Gold share and exceeds the value of
the Gammon offer by US$0.30 (or 5.4%) per Capital Gold share, based on
closing prices on March 15, 2011.
Proxy Service ISS has noted in its supplementary proxy notice of March 15,
2011 that the Timmins Gold offer is higher.
Timmins also announced that it 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.
"Gammon has tried to scare Capital Gold shareholders by suggesting
that if they don't take the Gammon bid they will be left with nothing. The
truth is that we are committed to the merger of Timmins Gold and Capital
Gold and have been since September 2010. Our offer is clearly superior to
Gammon's revised proposal and we have no intention of going away,"
stated Bruce Bragagnolo, CEO of Timmins Gold.
"The only impediment to getting a deal done is the Capital Gold board.
We are confident that Capital Gold shareholders will not be intimidated by
Gammon's scare tactics and will recognize that our offer is superior,"
Mr. Bragagnolo added.
TIMMINS:
THE BETTER DEAL
- Timmins will issue 2.27 Timmins common shares and US$0.25
in cash for each Capital Gold share
- The combined company will be a Mexico-focused, mid-tier gold
producer -- 50.5% owned by Capital Gold shareholders and 49.5% by
Timmins shareholders -- and is expected to have 2011 production of
160,000 oz. Au and combined proven and probable reserves of ~2.2
million oz. Au
- The Combined Company will benefit from:
- Re-rating upside potential: compared to the Gammon deal,
Capital Gold's own financial advisor said: "the long-term
valuation re-rating was potentially greater under a transaction with
Timmins Gold"
- Management team with a track record of building shareholder
value
- Experienced operations team based in the region
- Enhanced exploration opportunities throughout the district
THE CHOICE IS CLEAR
PRESERVE YOUR RIGHT TO A BETTER DEAL
VOTE NOW AGAINST GAMMON
Timmins urges Capital Gold shareholders to preserve their right to receive
the superior economic terms of Timmins' offer by voting AGAINST the Gammon
deal on the GOLD proxy card. Shareholders who have previously voted for the
Gammon deal on Capital Gold's white proxy card may obtain assistance in
revoking or changing that vote by contacting Innisfree M&A Incorporated
toll-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
shareholders 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 shareholders 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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