BOISE, Idaho, May 3, 2012 /PRNewswire/ -- Thunder Mountain
Gold, Inc. (the Company) (TSX-V: THM; OTCQB: THMG), a junior gold
exploration mining company is pleased to announce that it has
consummated a US$1.0 million
convertible promissory note (the "Convertible Note") as part
of the financing agreement with Idaho State Gold Company, LLC an
Idaho Limited liability company ("ISGC"). The Closing took place on
May 1, 2012 and the Company received
US$1,000,000.
The Convertible Note associated with the Project financing
provides working capital required to advance the Company's projects
and achieve some of its near-term milestones. The Company's
President, Eric Jones, said "The
Board and management are grateful to our partner - Idaho State Gold
- for believing in our vision and ability to achieve our goal of
developing the South Mountain Project. We are looking forward
to the coming months of project development."
Drafting of the Joint Venture Agreement is underway, following
the execution of a Letter of Intent (the "Letter of Intent")
with the Boise Idaho-based private
equity group, as announced in the Company's April 18, 2012 news release. The Letter of
Intent outlines a plan where Idaho State Gold can earn up to a 75%
participating interest in the project with an investment of
US$18.0 million in the project.
The objective of the Joint Venture Agreement will be to advance the
South Mountain property toward production, subject to completion of
a positive feasibility study on the project.
Prior to its maturity date, the Convertible Note is convertible
only upon the occurrence of certain events and during certain
periods ("Mandatory Conversion"), and thereafter, at any
time at the discretion of ISGC ("Voluntary Conversion").
Mandatory Conversion will occur when the Company and ISGC enter
into and consummate a Joint Venture Agreement, and then the entire
principal and accrued interest under the Convertible Note will be
deemed a capital contribution under any Joint Venture Agreement.
The Convertible Note will be secured by a first priority security
interest over all of the Company's assets and will pay interest at
a rate of 8.00% annually. The Convertible Note is due and payable
on or before the earlier of the following dates: (i) June 30, 2012, or (ii) fourteen business days
following the date on which the parties mutually agree that they
will not finalize a Joint Venture Agreement. If ISGC and the
Company do not execute and consummate a Joint Venture Agreement
prior to the maturity date of the Convertible Note, then ISGC can
voluntarily convert any or all of the unpaid principal and interest
due under the Convertible Note. Upon voluntary conversion, ISGC
will receive shares of the Company's common stock equal to a
conversion price of $0.08 per
share.
There were no finder's fees payable in connection with
transaction and no registration rights were granted in conjunction
with the Convertible Note or securities issuable under the
Convertible Note.
The proceeds of the Convertible Note are required to be used for
the following purposes:
- general corporate purposes,
- initiation of continued exploration work at the South Mountain
project, and
- advancement of the Company's other exploration projects,
including Trout Creek, West Tonopah, Iron Creek/ CAS and Clover
Mountain
The Convertible Note is subject to the approval of the TSX
Venture Exchange.
In addition, the Convertible Note and securities issuable under
the Convertible Note, are "restricted securities" under the United
States Securities Act of 1933, as amended (the "Act"), and unless
so registered, may not be offered or sold in the United States except pursuant to an
exemption from the registration requirements of the Act and
applicable state laws.
Private Placement
The Company also announces that has approved a new non-brokered
private placement of up to 4,000,000 units (each a "Unit") at a
price of US$0.12 per Unit for
aggregate gross proceeds of US$500K
(the "Private Placement"). Each Unit will be comprised
of one share of common stock and one-half of one common stock
purchase warrant (each a "Warrant") entitling the holder to
purchase one additional share of common stock of the Company for a
period of one year following the closing of the Private Placement
at a price of US$0.20 per
share. The Warrants will be subject to an accelerated
exercise period in the event that the Company's shares trade at a
price of greater than US$0.25 per
share for 10 consecutive trading days at any time during the
period following six months after the closing of the Private
Placement. The Company may pay cash finders' fees and issue
finders' warrants in connection with the sale of Units attributable
to arms-length finders, as permitted under the policies of the TSX
Venture Exchange. The proceeds raised pursuant to the Private
Placement will be used for the following:
- exploration on the newly completed option on the Iron Creek
cobalt gold project,
- initiation of exploration on the Thunder Mountain Gold/ Newmont
Mining Trout Creek joint venture, and
- professional and other expenses relating to the negotiation of
a definitive Joint Venture Agreement
The private placement remains subject to the approval of the TSX
Venture Exchange. The securities issued in the private
placement will be subject to a four-month hold period in accordance
with the policies of the TSX Venture Exchange and applicable
Canadian securities legislation. In addition, the securities
will be "restricted securities" under the United States Securities
Act of 1933, as amended.
The Company further announces that it will not be proceeding
with the private placement of up to 2,500,000 common shares at a
price of C$0.20 per share originally
disclosed in its news releases dated December 9, 2011 and December 12, 2011.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the Notes, nor shall there be any
sale of these securities, in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any state.
About Thunder Mountain Gold, Inc.
Thunder Mountain Gold, a junior gold exploration company founded
in 1935, holds a 100% interest in several U.S. gold projects. The
Company's principal assets are The South Mountain Project – a
historic former producer of gold, silver, zinc, lead, and copper,
located in southern Idaho, just
north of the Nevada border, and
their Trout Creek Project – a grass roots gold target in the
Eureka-Battle Mountain trend of central Nevada, currently under Joint Exploration
Agreement with Newmont Gold. For more information on Thunder
Mountain, please visit the Company's website at
www.Thundermountaingold.com.
U.S. Securities Act of 1933
This press release does not constitute an offer of any
securities for sale or a solicitation of an offer to purchase any
securities.
Forward-Looking Statements
This press release contains forward-looking statements that
are based on the beliefs of management and reflect the Company's
current expectations. The forward-looking statements in this press
release also include information relating to the intention of the
Company to complete a Joint Venture Agreement with ISGC pursuant to
the Letter of Intent with ISGC previously disclosed. The
forward-looking statements are based on certain assumptions, which
could change materially in the future, including the assumption
that the Letter of Intent and/or Convertible Note will lead to a
definitive Joint Venture Agreement, that the transactions
contemplated in the Letter of Intent will be completed, and that
the Company will successfully consummate the intended Joint
Venture. By their nature, forward-looking information involves
known and unknown risks, uncertainties and other factors that may
cause actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking information. Such
factors include the risk that the transaction contemplated in the
Letter of Intent may not result in a binding definitive agreement
and any agreement may have terms and conditions different from
those contemplated in the Letter of Intent that the Joint Venture
may not be completed, and the Company may not advance the Projects
contemplated in this press release. There can be no assurance that
forward-looking information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, investors should not
place undue reliance on forward-looking information.
Forward-looking information is provided as of the date of this
press release, and the Company assumes no obligation to update or
revise them to reflect new events or circumstances, except as
required in accordance with applicable laws.
The risks and uncertainties that could affect future events or
the Company's future financial performance are more fully described
in the Company's quarterly reports (on Form 10-Q filed in the US
and the financial statements and Form 51-102F1 filed in
Canada), the Company's annual
reports (on Form 10-K filed in the US and the financial statements
and Form 51-102F1 filed in Canada)
and the other recent filings in the US and Canada. These filings are available at
www.sec.gov in the US and www.sedar.com in Canada. For all such forward-looking
statements, the Company claims the safe harbor for forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. All information in this release is as of
May 2, 2012. The company undertakes
no duty to update any forward-looking statement to conform the
statement to actual results or changes in the company's
expectations.
Cautionary Note to Investors
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release. 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.
For further information, please contact:
Thunder Mountain Gold Inc.
Eric Jones, President and
C.E.O.
Email: eric@thundermountaingold.com
Phone: (208) 658-1037
Jim Collord, Vice President and
C.O.O.
Email: jim@thundermountaingold.com
SOURCE Thunder Mountain Gold, Inc.
