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Americas Bullion Corporate Reorganization: Streamlined, Low-Cost Business Structure with Diversification


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2013-12-17 21:30:28 -

Hayden, Idaho, December 17, 2013: Americas Bullion Royalty Corp. (TSX: AMB) (the "Company" or "AMB") is pleased to announce a corporate reorganization that will see the Company streamline as well as diversify its business, increase its royalty portfolio and adopt a low cost business structure to position it for future growth, while continuing to have exposure to exploration successes via equity holdings in select companies. AMB plans to sell assets (the "Sales") to and make equity investments (the "Investments") in Silver Predator Corp. (TSX:SPD) ("SPD"), and Northern Tiger Resources Inc. (TSXV:NTR) ("NTR or Northern Tiger") following NTR's planned merger with Redtail Metals Corp. (TSXV:RTZ) ("RTZ or "Redtail"). After completion of the Sales and Investments, AMB would have minority, but controlling

interest, in SPD and NTR. As a result of the Sales and Investments, AMB would receive in excess of $10 million over a three year period and generate 43 royalty interests, increasing the Company's total royalty portfolio to 55 royalties.

In addition to these Transactions, AMB announces that it has agreed to acquire Resource Holdings Ltd. ("RH"), a Bermuda corporation, from Multi-Strat Holdings Ltd. for the sum of US$1,300,000 (the "RH Acquisition"). RH owns all of the issued and outstanding shares of Resource Re Ltd. ("RE"), a Bermuda corporation, which holds a Bermuda Class 3A insurance license and cash of US$1,000,000.

New AMB Director, Wayne Kauth

Further to the acquisition of RH and in recognition of the diversification of its business model, the Company is pleased to announce that Mr. Wayne Kauth has agreed to join AMB as an independent member of the Company's Board of Directors. Following a 34 year career with Ernst & Young, LLP, Mr. Kauth is now an independent consultant on a wide ranging array of insurance matters. While at Ernst & Young, Mr. Kauth served as the national technical director of accounting and auditing matters for the insurance industry and as the national director of Ernst & Young's insurance practice. Since 2003, Mr. Kauth has served on the Board of Directors for Kemper Corporation, a U.S.-based insurance company registered with the Securities and Exchange Commission and listed on the New York Stock Exchange. He is a National Association of Insurance Commissioners (NAIC) Accreditation Review Team Member and holds the following designations: Chartered Property and Casualty Underwriter; Chartered Life Underwriter; and Fellow in the Life Management Institute. He is a Certified Public Accountant and holds a BBA and MBA from the University of Wisconsin.


PLAN OF ARRANGEMENT

After the RH Acquisition, pursuant to a Plan of Arrangement, (the "Plan of Arrangement") RH will acquire all of the outstanding shares of AMB (the "AMB Shares") in exchange for shares of RH (the "Newco Shares"). As a result, AMB will become a subsidiary of RH ("Newco") and AMB shareholders will become Newco shareholders. The shares of Newco will continue to be listed on the TSX.

When AMB shareholders exchange their AMB Shares for Newco Shares under the Arrangement, the Newco Shares so issued will be restricted voting shares whereby no single shareholder may exercise voting rights for more than 9.9% of the total issued and outstanding Newco Shares which carry voting rights. Newco will issue one share issued for each 100 AMB Shares such that Newco is expected to have approximately 1,803,166 shares outstanding.

The Sales and Investments, the RH Acquisition and the Plan of Arrangement (collectively, the "Transactions") are subject to the approval of any regulatory body having jurisdiction over the Transactions, including but not limited to, the Toronto Stock Exchange (the "TSX") and the Bermuda Monetary Authority. The Plan of Arrangement will require approval of not less than 66 and 2/3% of the votes cast by AMB shareholders voting as a single class.

Closing
The parties anticipate closing the Transactions as soon as possible following the execution of the definitive agreements, Special Shareholder Meetings of AMB, RTZ, NTR and SPD approving the Transactions, and the receipt of any required approvals. The closing of the Transactions shall take place no later than March 14, 2014.

Proposed Post Reorganization Profile of Company's Assets
Upon completion of the Transactions and the Plan of Arrangement, the general nature of the assets of Newco will be:

(a) approximately $12 million in cash on a consolidated basis following closing of the second tranche of the Red Kite settlement (see news release of AMB dated November 26, 2013)

(b) ownership of approximately 49% each of SPD and NTR;

(c) ownership of Resource Re Ltd.;

(d) approximately 55 separate royalty interests including deeded and option related royalties;

(e) securities of unrelated companies with a current market value of approximately $0.5 million;

(f) the Carlin Vanadium Project, Elko County, Nevada;

(g) ownership of approximately 12% in Wolfpack Gold Corp (TSXV:WFP); and

(h) approximately 157oz of gold bullion held at Johnson Matthey.

Distribution to Shareholders of Record
It is intended that as part of the Transactions, RH will distribute to its shareholders of record such number of SPD and NTR shares held by it in order to reduce its post-transaction share position to 49% of the outstanding SPD and NTR shares.

Full details of the Transactions and related transactions disclosed herein will be included in a management information circular to be mailed to AMB shareholders in relation to the AMB Meeting expected to be held in February 2014.

DETAILS OF NORTHERN TIGER/REDTAIL TRANSACTION STRUCTURE

Redtail and Northern Tiger have agreed with AMB to expand the terms of the previously announced Redtail and Northern Tiger (the "Merger"), as described in the joint RTZ/NTR October 28, 2013 news release, to include the acquisition by Northern Tiger of AMB's Brewery Creek Project and a $2.25 million investment by AMB in the merged company. In addition, Northern Tiger has today completed the previously announced acquisition of AMB's interest in the Grew Creek gold project located in Yukon, Canada (the "Grew Creek Project") and related drill and core data (the "Data") for $900,000. Northern Tiger will be the surviving entity upon completion of the Merger and will be renamed "Golden Predator Mining Corp."

Acquisition of Brewery Creek Project, Yukon

Under the terms of the amended and restated business combination agreement among the parties and concurrent with the Merger, Northern Tiger will acquire the balance of AMB's Yukon mineral properties, including the Brewery Creek Project (collectively, the "Yukon Assets"), and AMB's accumulated tax losses, for a purchase price equal to $5,250,000 and the grant by Northern Tiger to AMB of a royalty interest in each of its properties held at closing (the "AMB Acquisition").

To facilitate the AMB Acquisition, AMB will complete a pre-closing reorganization (described above under "Plan of Arrangement"), following which AMB will be a wholly-owned subsidiary of Newco, the common shares of which will continue to be listed on the TSX. On completion of the reorganization, AMB's sole assets will be the Yukon Assets and AMB's accumulated tax losses. Newco will then transfer all of the outstanding shares of AMB to Northern Tiger.

Northern Tiger will satisfy the purchase price in part by the issue to Newco, at closing, of such number of Northern Tiger shares having an aggregate value of $550,000 and a convertible promissory note in the principal amount of $4,700,000 bearing interest at 6% per annum and payable over a period of three years (the "AMB Acquisition Note"). The balance of the purchase price will be satisfied by the grant to Newco of a royalty interest in each of its properties held at the closing of the AMB Acquisition.

The Northern Tiger shares issued at closing will be issued at a deemed price per share equal to the greater of: (i) the volume weighted average trading price (VWAP) of the Northern Tiger shares on the TSX Venture Exchange (TSXV) for the seven trading days immediately preceding the date of the Northern Tiger shareholder meeting called to approve the Merger (the "NTR Meeting"); and (ii) $0.35.

Under the terms of the AMB Acquisition Note, the principal amount will become due as follows: $1,100,000 on the first anniversary of the Merger, $1,600,000 on the second anniversary and $2,000,000 on the third anniversary, in each case with interest accumulated under the note as at such date. Northern Tiger may elect to pay the amount then due (including interest) either in cash or by the issue of Northern Tiger shares (or any combination thereof), at the election of Northern Tiger. Any Northern Tiger shares issued will be deemed issued at a price per share equal to the greater of: (i) the VWAP of the Northern Tiger shares on the TSXV for the fourteen trading days immediately preceding the date that is two days before the date of issue, and (ii) $0.35; subject to a 10% discount in the event the VWAP is equal to or greater than $0.20 but less than $0.35, and a 20% discount in the event the VWAP is $0.35 or more.

Northern Tiger has agreed that, until such time as it has paid the AMB Acquisition Note in full, it will not sell, assign, transfer, joint venture, option or in any way encumber the AMB shares acquired or any of the Yukon Assets without first obtaining the prior written consent of Newco (such consent not to be unreasonably withheld, conditioned or delayed). In addition, Northern Tiger's right to elect to make payments in shares will cease, and become the right of Newco, in the event that Northern Tiger enters into a binding agreement for the sale, option, joint venture or like transaction in respect of the Brewery Creek Project.

If at any time Northern Tiger fails to make a payment under the AMB Acquisition Note when due, Northern Tiger will be required to transfer the AMB shares back to Newco and Northern Tiger will be deemed to have forfeited to Newco, without compensation, any portion of the purchase price then paid to Newco. In addition, Newco would also retain, without compensation to Northern Tiger, all of the royalty interests granted to Newco at the closing of the AMB Acquisition.

Completion of the AMB Acquisition on the terms described above is subject to stock exchange regulatory approval and approval of the AMB shareholders.

Concurrent NTR Financing

AMB has also agreed to invest an aggregate of $2,250,000 in Northern Tiger common shares in connection with the Merger, $450,000 of which will be made immediately available pursuant to a non-revolving credit line (the "Interim Loan") convertible into Northern Tiger shares at closing. This Interim Loan replaces the $150,000 bridge loan announced in Northern Tiger's and Redtail's October 28, 2013 joint news release, and will be advanced in tranches of $50,000 based on the working capital needs of Northern Tiger through to closing. AMB has also advanced $32,500 to Redtail for transaction related expenses. Both loans bear interest at 6% per annum (compounded annually) and are payable in Northern Tiger common shares at completion of the Merger at a price equal to $0.21 per share.

Concurrent with the completion of the Merger, Newco will subscribe, on a private placement basis, for Northern Tiger shares having a value equal to $2,250,000 less the amount then drawn under the Interim Loan (the "Concurrent Financing"). The Northern Tiger shares sold to Newco in the Concurrent Financing will be issued at a price per share equal to the greater of: (i) the VWAP of the Northern Tiger shares on the TSXV for the seven trading days immediately preceding the date of the NTR Meeting; and (ii) $0.28.

Northern Tiger may also raise up to an additional $100,000 at the same time as, and on the same terms as, the Concurrent Financing.

Completion of the Concurrent Financing on the terms described above, including the conversion of the interim loans into Northern Tiger shares, is subject to stock exchange regulatory approval and approval of the AMB shareholders.

Acquisition of Grew Creek Project, Yukon

At the closing of the Grew Creek Acquisition, Northern Tiger paid $200,000 for the Grew Creek Property and $700,000 for the Data. The purchase price for each was satisfied by the issue to AMB of a promissory note (together, the "Grew Creek Notes") in the same principal amount. The Grew Creek Notes bear interest at 6% per annum (compounded annually) and are payable on demand. The terms of the notes permit Northern Tiger to satisfy up to $800,000 of the principal in Northern Tiger common shares at a per-share price of $0.21 at closing of the Merger. The remaining $100,000 is payable in cash. In the event the Merger is terminated or Northern Tiger defaults in payment under the notes, AMB is entitled to repurchase the Grew Creek Property and the Data at the same purchase price.

The Grew Creek Project is under option from a third party. Northern Tiger may exercise the option and acquire a 100% interest in the Grew Creek Project, subject to a 4% NSR in favor of the optionor, upon making a final cash payment to the optionor of $100,000. The Grew Creek Project is located 32 km southwest of Faro and 24 km northwest of Ross River, Yukon. The property's 135 square km encompass 666 quartz claims, extending along both sides of the Robert Campbell Highway for approximately 27 km, with power lines traversing the project area.

Completion of the Merger

All share prices disclosed above assume completion of the previously announced 7:1 consolidation of Northern Tiger shares at closing of the Merger (the "Consolidation").

Upon completion of the Merger and the related transactions disclosed herein and assuming the maximum number of Northern Tiger shares issued on conversion of the Grew Creek Notes, it is anticipated that Newco will hold up to 54% of the outstanding shares of Northern Tiger and will be a "control person" of Northern Tiger (as such term is defined in the policies of the TSXV) at closing. It is intended that, immediately following closing, Newco will distribute to its shareholders such number of Northern Tiger shares then held by it in order to reduce its post-Merger share position in Northern Tiger to 49% of the outstanding Northern Tiger shares. Accordingly, it is anticipated that upon completion of this distribution by Newco, current Northern Tiger shareholders will hold as a group approximately 30% of the merged company and current Redtail Metals shareholders will hold as a group, approximately 17% of the merged company.

Neither AMB nor RTZ are "Non-Arms' Length Parties" (as such term is defined in TSXV policies) to NTR, as a result of common directors and officers. It is anticipated that the Merger will be exempt from the sponsorship requirements contained in TSXV policies. The Merger will not constitute a "reverse takeover" for Northern Tiger under the applicable TSXV policies.

Completion of the transaction is subject to, among other conditions customary for a transaction of this nature, the approval of the TSXV, approval of the Redtail, Northern Tiger and AMB shareholders, completion of the AMB Acquisition, Consolidation and Concurrent Financing, and completion of the entire transaction by not later than March 14, 2014.

It is anticipated that Northern Tiger and Redtail will complete the Merger by way of a plan of arrangement under the Business Corporations Act (British Columbia). Full details of the Merger and the related transactions disclosed herein will be included in the joint management information circular to be filed with the regulatory authorities and mailed to Northern Tiger and Redtail shareholders in relation to their respective meetings called to approve the transaction and related matters.

DETAILS OF SILVER PREDATOR TRANSACTION STRUCTURE

Silver Predator Corp. ("SPD") has agreed to acquire from AMB the Springer Tungsten Mine and Mill along with several other projects, primarily in Nevada, in consideration of US$5,000,000, payable over three years, and the grant by SPD of a royalty interest in all of its properties held at closing (the "Acquisition"). Concurrent with the Acquisition, AMB will commit an additional US$1,800,000 by private placement to further fund SPD.


Acquisition of Springer Mining and Nevada Royalty Corp.

Under the terms of a binding letter agreement, SPD will acquire all of the outstanding shares of each of Springer Mining Company ("Springer Mining") and Nevada Royalty Corp. ("Nevada Royalty") from Golden Predator US Holding Corp. ("GPUS"), a wholly owned subsidiary of AMB. The assets of Springer Mining include the Springer underground mine and mill complex, including substantially all permits required for mining operations, 3,756 acres of fee land, 340 unpatented lode mining claims, 25 placer mining claims, and the Copper King Tungsten Property consisting of 7 patented and 9 unpatented mining claims, all of which are located in Pershing County, Nevada. The assets of Nevada Royalty include the Taylor mill property and equipment and water rights, the Humboldt mill site, and all patented and unpatented mining claims associated with the Modoc, Tempo, Yankee West, Guild/Skipjack, Flamingo and Lewiston properties, most of which are located in Nevada. The transaction will not include the sale of any royalties currently held by AMB. It is anticipated that, on completion of the Acquisition, the Taylor Mine and Mill along with the Springer Mine and Mill will be the principal assets of SPD.

Immediately prior to the Acquisition, AMB intends to complete a pre-closing reorganization, following which AMB will be a wholly-owned subsidiary of Newco, the common shares of which will continue to be listed on the TSX. As part of the reorganization, Springer Mining and Nevada Royalty will contribute all of their existing royalty interests to GPUS prior to the acquisition of Springer Mining and Nevada Royalty by SPD. Newco will then cause GPUS to transfer all of the outstanding shares of Springer Mining and Nevada Royalty to SPD.

SPD will satisfy the purchase price in part by the issue to Newco, at closing, of such number of SPD common shares having an aggregate value of US$500,000, together with a convertible promissory note in the principal amount of US$4,500,000 bearing interest at 4% per annum and payable over a period of three years (the "Acquisition Note"). The balance of the purchase price will be satisfied by the grant to Newco of a royalty interest in each of its properties held at the closing of the Acquisition.

The SPD Shares issued at closing of the Acquisition will be issued at a deemed price per share equal to the volume weighted average trading price (VWAP) of the SPD Shares on the TSX for the seven trading days immediately preceding the date of the SPD's shareholder meeting called to approve the transaction (the "SPD Meeting").

Under the terms of the Acquisition Note, the principal amount will become due as follows: US$1,000,000 on the first anniversary of the Acquisition, US$1,500,000 on the second anniversary and US$2,000,000 on the third anniversary, in each case with interest accumulated under the note as at such date. SPD may elect to pay the amount then due (including interest) either in cash or by the issue of SPD Shares (or any combination thereof). Any SPD Shares issued will be deemed issued at a price per share equal to the VWAP of the SPD Shares on the TSX for the fourteen trading days immediately preceding the date that is two days before the date of issue (subject to a 10% discount in the event the VWAP is at least CAD$0.36 but less than CAD$0.75, and a 15% discount in the event the VWAP is CAD$0.75 or more).

SPD has agreed that, until such time as it has paid the Acquisition Note in full, it will not sell, assign, transfer, joint venture, option or in any way encumber the shares of Springer Mining or Nevada Royalty (or any of the assets acquired therewith) without first obtaining the prior written consent of Newco (such consent not to be unreasonably withheld, conditioned or delayed).

If any time SPD elects to terminate the Acquisition or fails to make a payment under the Acquisition Note when due, SPD will be required to transfer the shares of Springer Mining and Nevada Royalty back to Newco and SPD will be deemed to have forfeited to Newco, without compensation, any portion of the purchase price then paid to Newco. In addition, Newco would also retain, without compensation to SPD, all of the royalty interests granted to Newco at the closing of the Acquisition; provided that if at such time SPD shall have paid Newco at least US$1,000,000 of the purchase price; SPD will retain 100% ownership of the Taylor Mill.

Completion of the Acquisition is subject to, among other conditions customary for a transaction of this nature, stock exchange regulatory approval, approval of the SPD and AMB shareholders, completion of the concurrent financing disclosed below, and completion of the entire transaction by not later than March 14, 2014.

Concurrent SPD Financing

AMB has also agreed to participate in a private placement in SPD for an additional approximately US$1,800,000 (approximately CAD$1,915,000) (the "Concurrent Financing"). On December 13, 2013, the Company announced the completion of an investment by AMB in the amount of approximately $271,000, with an additional approximately $229,000 to close after receipt by SPD of disinterested shareholder approval. SPD anticipates holding the shareholders' meeting to approve the December financing, the Concurrent Financing and the issuance of SPD Shares in connection with the Acquisition, in mid-February (the "SPD Meeting").

The Concurrent Financing is anticipated to close on April 15, 2014, or an earlier date mutually agreed by the parties. The SPD Shares will be issued at price equal to the VWAP of the SPD Shares on the TSX for the seven trading days immediately preceding the date which is two days before the financing closing date.

Completion of the Concurrent Financing on the terms described above is subject to stock exchange regulatory approval and approval of the SPD shareholders.

Completion of the Transaction

So long as Newco holds at least 15% of the outstanding SPD Shares, it will have a pre-emptive right to maintain its percentage shareholding. In addition, on completion of the Acquisition, SPD will reconstitute its board of directors such that it will be comprised of 7 members, 4 of whom will be directors nominated by SPD and three of whom will be nominated by Newco. The exact composition of the board will be disclosed in a subsequent news release, once determined by the parties. Nate Tewalt will continue in his role as the Chief Executive Officer. So long as Newco holds at least 20% of the outstanding SPD Shares it will be entitled to nominate two directors for election to the SPD board and thereafter one director until such time as it owns 10% or less of SPD.

The Acquisition is a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and the policies of the TSX as a result of the fact that AMB currently owns, directly and indirectly, 25,476,535 shares, or approximately 37.51% of SPD's issued and outstanding shares. In accordance with the requirements of MI61-101, the SPD will seek disinterested shareholder approval in respect of the Acquisition. In addition, the SPD may, subject to the availability of an exemption, be required to obtain a formal valuation.

The Company will host a live audio webcast at 1 PM PST on Friday, December 20th, 2013 to provide information about recent developments and answer shareholder inquiries. The live audio webcast, and subsequent Q&A Session, can be accessed at:

event.on24.com/r.htm?e=733134&s=1&k=D09B0AFAF63EA471C0CC7E02CF58 ..

The securities referenced in this news release have not been registered and may not be sold in the United States absent registration or an exemption from registration.

Americas Bullion Royalty Corp.

Americas Bullion Royalty Corp. invests in undervalued natural resource assets seeking to provide superior investment returns. Americas Bullion's assets include royalty holdings across Mexico, Nevada, Wyoming, Oregon and California; the Springer Tungsten Mine and Mill; the Taylor mill and Humboldt mill site in Nevada; the Brewery Creek project, and a portfolio of Yukon exploration properties. The Company provides shareholders with the potential for exploration success through equity positions in related companies while continuing to advance and monetize its holdings.

For additional information:
Americas Bullion Royalty Corp.
William M. Sheriff, Chairman & CEO
(208) 635-5415
info@aubullion.com
www.aubullion.com

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This press release contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance. There are numerous risks and uncertainties that could cause actual results and Americas Bullion's plans and objectives to differ materially from those expressed in the forward-looking information. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, Americas Bullion assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change.

To view this press release as a PDF, please click on the following link:
www.usetdas.com/pr/americasbullion12172013.pdf


Author:
Fred Gautreau
e-mail
Web: www.fscwire.com
Phone: 14037173898

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