Citation Resources (TSX:V.CTT, Stock Forum), a Vancouver-based mining firm engaged in the exploration and development of precious and base metal resources, announced today that the company had entered into a binding agreement with Inlet Resources (TSX:V.INL, Stock Forum) where Inlet has agreed to buy up all issued and outstanding shares of Citation in a exchange for common shares of Inlet.
According to the news release, “Pursuant to the Merger, Citation Shareholders will receive half of an Inlet Share for each Citation Share held by them (the "Exchange Ratio") on the date the Merger is completed (the "Closing"). Based on the Inlet Share closing price prior to the halt of trading on April 21, 2014, the Exchange Ratio represents an implied value of $0.0675 per Citation Share and an implied premium of 25.3% to the 20-day closing average volume weighted Citation Share price prior to the halt of trading on April 21, 2014, of $0.0539.”
The release went on to note, “Pursuant to the Letter Agreement, Citation has agreed to use reasonable efforts to cause the directors and officers of Citation to enter into lock-up agreements with Inlet, pursuant to which they will vote their Citation Shares in favour of the Merger. The lock-up agreements provide that the Citation directors and officers may under certain circumstances terminate the lock-up agreements upon accepting an unsolicited superior proposal.”
Company Chairman and CEO, Matthew Watson, commented, “I am delighted to announce a transaction which brings both financing and management to Citation. Inlet's proven management and technical capability in advancing exploration and development projects, combined with Citation's permitted, drill-ready Biricu Project creates a unique foundation to deliver value to shareholders of Citation.”
He then concluded, “Our exploration program at Biricu has demonstrated very attractive geological aspects of the Biricu concessions consistent with other discoveries in the Guerrero Gold Belt and Citation now has an accomplished partner with the resources necessary to immediately launch the initial drill program for the Biricu Property.”