RTG Mining Inc. to merge with Sierra Mining Limited

PERTH, Western Australia, Feb. 24, 2014 /CNW/ - RTG Mining Inc. (TSX:RTG) 
(RTG) and Sierra Mining Limited (ASX:SRM) (Sierra) are pleased to announce 
that they have entered into a conditional Scheme Implementation Deed (Merger 
Agreement) to combine the two companies at an agreed exchange ratio(1) of: 
    --  3 RTG shares for each Sierra share held; plus 

        --  1 RTG option for every 3 Sierra shares held.

The RTG options will be exercisable for a period of three years at an exercise 
price of C$0.15 ($A0.15(2)).

This consideration represents:
        --  approximately A$0.3013 (C$0.301) per Sierra share;
        --  a premium of 27.4% to the 30 day VWAP of the Sierra share price
            based on the 30 day VWAP of the RTG share price; and
        --  a premium of 15.9%4 to the closing price of Sierra shares of
            A$0.26 on 21 February 2014.

The resultant combined entity will be led by a management team which holds the 
exploration, mine development and operating experience in the Philippines to 
progress Sierra's Mabilo and Bunawan Projects. The management team of RTG was 
previously responsible for the successful development and operation of the 
Masbate Gold Mine for CGA Mining Limited prior to its acquisition by B2Gold 
Corp. in early 2013. The transaction with RTG will also provide improved 
funding capability, a listing on the Toronto Stock Exchange (TSX) and a strong 
institutional shareholder following, resulting in a combined company well 
positioned to capitalise on the significant mine development opportunity at 
Mabilo and Sierra's other regional projects in the Philippines.

The Mabilo Project is a potentially high grade polymetallic development 
project, with a direct shipping opportunity in the early years of operation 
which would strongly mitigate the need for development capital. Mabilo is a 
near-surface deposit, and it is anticipated that the newly combined company 
will be well positioned to further explore and develop the mineral potential 
of the area in the near-term.  Sierra also owns the Bunawan Project which is a 
highly prospective high grade gold exploration project, situated contiguous to 
the existing high grade Co-O mine owned by Medusa Mining Limited.

(1) To allow comparison with current share market trading prices, the exchange 
ratio shown is a pre-RTG share consolidation basis. On a post RTG share 
consolidation basis, the exchange ratio is 3 RTG shares for each 10 Sierra 
Shares held and 1 RTG Option for every 30 Sierra Listed Options held with the 
RTG Options to be issued as consideration having an exercise price of C$1.50 
after the RTG Share Consolidation.
(2) Assumes an exchange rate on 21 February 2014 of CAD:AUD 1.005.
(3) Calculated using the closing share price for RTG on TSX on 21 February 
2014, and the Black-Scholes option pricing model based on Sierra's 12 month 
(4) Based on the closing price for RTG shares and Sierra shares on 21 February 

The merger will be implemented by way of Scheme of Arrangement between Sierra 
and its shareholders under the Australian Corporations Act 2001 (Merger).  RTG 
is listed on the TSX, and will also seek a listing on the Australian 
Securities Exchange (ASX) as part of the transaction.

The Merger is conditional upon approvals from Sierra shareholders, RTG 
shareholders and the Australian Court as well as necessary regulatory 
approvals and other customary conditions (see Merger Agreement for more 
details). In conjunction with the Merger, RTG also intends to undertake a 
consolidation of its shares on a 10:1 basis(5).

The Merger Agreement will be available on SEDAR (www.sedar.com) under the 
profile of RTG, the electronic filing system for the disclosure of Canadian 
public companies.

The Merger Agreement will also be released to the ASX by Sierra in a 
contemporaneous announcement.


Sierra Directors unanimously recommend that Sierra shareholders vote in favour 
of the Merger in the absence of a superior proposal and subject to an 
Independent Expert concluding that the Scheme is in the best interests of 
Sierra shareholders. On the same basis, the Sierra Directors intend to vote 
the Sierra shares they respectively currently control in favour of the Merger. 
 In aggregate, the Sierra Directors control approximately 15.9% of the diluted 
capital of Sierra.

The RTG Directors unanimously recommend that RTG shareholders vote in favour 
of all resolutions required to implement the Merger, and they intend to vote 
all RTG shares they respectively control in favour of the Merger.

Ms Justine Magee, Chief Executive Officer of RTG said "The acquisition fits 
well with our strategy of targeting projects with low technical and project 
risk where we can add value through rapid and successful development and 
optimisation.  RTG's strong financial position, technical expertise and track 
record of building mines responsibly and efficiently in the Philippines 
positions us to rapidly advance the Mabilo Project and maximise value for both 
RTG and Sierra shareholders and other stakeholders."

Mr Matthew Syme, Chief Executive Officer of Sierra said "We believe we have 
put together an unsurpassed package of exploration and development assets in 
Sierra. We have great confidence that Mike Carrick, Justine Magee and the RTG 
team are the right management group to now extract the best value from 
Sierra's projects, given their outstanding track record of delivering 
profitable mining outcomes in the Philippines. This transaction puts the right 
assets, management and capital together, while ensuring that Sierra's 
shareholders retain maximum exposure to the outstanding potential of the 
merged entity. We have taken advice from our financial and legal advisers and 
concluded that this offer is in the best interests of Sierra's shareholders. 
Therefore the Board and management recommends this offer to Sierra 
shareholders, subject to confirmation by an Independent Expert's Report."

B2 Gold has advised both companies that it supports the transaction. B2 Gold 
is the largest shareholder in both RTG and Sierra, with an 18.2% shareholding 
in RTG and a 7.4% interest in Sierra.

Clive Johnson, President and Chief Executive Officer of B2 Gold said "The RTG 
management team have an excellent track record in the development of new gold 
projects and particularly in the Philippines. The business case for this 
merger is compelling and we look forward to continuing our support of the 
merged entity."

(5) To allow comparison with current share market trading prices, the 
information and exchange ratios in this announcement are shown on a pre RTG 
share consolidation basis.  On a post RTG share consolidation basis, the 
exchange ratio is 3 RTG shares for each 10 Sierra Shares held and 1 RTG Option 
for every 30 Sierra Listed Options held with the RTG Options to be issued as 
consideration having an exercise price of C$1.50 after the RTG Share 

Merged entity board of Directors

Following the Merger becoming effective, Mr Matthew Syme, Sierra's current 
Managing Director will be invited to join the Board of the merged RTG entity 
as a Non-Executive Director with the existing RTG Board of Directors.

Treatment of Sierra options

Sierra's listed options will be acquired under a separate scheme of 
arrangement between Sierra and its optionholders under the Corporations Act 
(Option Scheme).  The exchange ratio(6) for the listed options of 2 RTG shares 
for each Sierra listed option held plus 2 RTG options for every 9 Sierra 
listed options held, reflects the exchange ratio for the acquisition of Sierra 
shares under the Merger.  The Merger is subject to a waivable condition that 
the Option Scheme is approved.  The Option Scheme is itself conditional and 
will only be implemented if the Merger proceeds.  See the Merger Agreement for 
more details.

If the Merger becomes effective, RTG also proposes to acquire all outstanding 
unlisted Sierra options and will issue RTG shares and options as consideration 
for the transfer of these options at an exchange ratio which reflects the 
exchange ratio for the acquisition of Sierra shares.

Overview of Merger process

The Merger and the Option Scheme are subject to various ASX, TSX and 
Australian Securities and Investments Commission approvals, shareholder 
approvals and Australian Court approval.  The parties are progressing to 
obtain these approvals.

A Scheme booklet setting out information relevant to the Merger, including an 
Independent Expert's Report on whether the Merger is in the best interests of 
Sierra shareholders will be sent to all Sierra shareholders and listed 
optionholders to consider before the meetings of Sierra shareholders and 
optionholders to approve the Merger and the Option Scheme respectively.

In addition RTG shareholders will receive a circular in relation to the RTG 
shareholder approvals required to implement the Merger.

Indicative timing for implementation of the Merger is as follows:
    Event                                                      Target Date
    Court hearing to approve scheme booklet                 late March 2014
    RTG Circular sent to RTG shareholders                   late March 2014
    Scheme booklet sent to Sierra shareholders and          late March 2014
    RTG shareholders meeting                                mid April 2014
    Sierra shareholders meeting and optionholders meeting   late April 2014
    Court hearing to approve Merger and Option Scheme       late April 2014
    Merger and Option Scheme become effective               late April 2014
    Sierra shareholder and optionholders receive RTG shares early May 2014
    and options
    RTG listed on ASX                                       early May 2014

(6) To allow comparison with current market trading prices, the information 
and exchange ratios in this announcement are shown on a pre RTG share 
consolidation basis.  On a post RTG share consolidation basis, the exchange 
ratio under the Option Scheme is 2 RTG shares for each 10 Sierra Shares held 
and 1 RTG Option for every 45 Sierra Listed Options held with the RTG Options 
to be issued as consideration having an exercise price of C $1.50 after the 
RTG Share Consolidation.

Exclusivity arrangements

The Merger Agreement also contains customary exclusivity arrangements, 
including no-shop and no-talk provisions, matching and notification rights in 
the event of a competing proposal and a reciprocal reimbursement fee payable 
by RTG or Sierra in specified circumstances.  Details are set out in the 
Merger Agreement.


RTG's Australian legal counsel is Corrs Chambers Westgarth and its Canadian 
legal counsel is Blake, Cassels & Graydon LLP.  RTG's financial advisor is 
Haywood Securities Inc.

Sierra's Australian legal counsel is Hardy Bowen Lawyers and its Canadian 
Legal Counsel is Stikeman Elliott LLP.

About RTG(7)

RTG Mining Inc. is a British Virgin Islands-incorporated company listed on the 
main board of the TSX.  It is a mining exploration company focused on 
identifying new gold development and operating acquisition opportunities.

As at 31 December 2013, RTG had cash and receivables of in excess of US$12.8m 
(A$14.3m(8)).  RTG has sold its interest in the Mkushi Copper Project in 
Zambia for consideration of US$13.1m, including US$6.6m in shares of Elephant 
Copper Limited and a convertible note due in January 2015 for US$6.5m.  RTG 
has also entered into a sale agreement for its interest in the Segilola Gold 
Project in Nigeria to the current joint venture partner for a total 
consideration of US$14m, with US$1m due on completion, US$5m due in 18 months 
after completion and a 3% net smelter royalty, under which up to a maximum of 
US$8m may be paid to RTG. The sale also resolves the existing dispute with the 
current joint venture partner.  Completion is anticipated in the next couple 
of months.

RTG is led by the previous management team of CGA Mining Limited which 
developed the Masbate Gold project in the Philippines and successfully merged 
with B2Gold Corp. in a US$1.1bn scheme of arrangement in January 2013.  The 
RTG Board comprises Michael Carrick (Chairman), Justine Magee (President and 
CEO), Phil Lockyer, David Cruse and Rob Scott (Non Executive Directors).

About Sierra(9)

Sierra is an Australian company listed on ASX which is focused on exploration 
and development of gold and copper projects in the Philippines.

Sierra has a majority interest in the Mabilo Project, with exploration to date 
highlighting high grade gold, copper and magnetite mineralisation and 
significant exploration potential.  Sierra has a joint venture with Galeo 
Equipment and Mining Company, Inc. in relation to the Mabilo Project, under 
which Galeo can hold and retain up to 42%(10) of the joint venture, subject to 
payment of farm-in expenditures, provision of approximately 14,000 metres of 
drilling within a 2 year period (further mitigating near term funding 
requirements), provision of management services and satisfaction of other 
conditions within defined periods.  Sierra also has an interest in the 
Nalesbitan Project in Eastern Luzon and two permit applications in eastern 
Mindanao known as the Bunawan Project which provides a significant land 
holding of over 88 square kilometres adjacent to Medusa Mining Limited's Co-O 
Mine.  Sierra had cash reserves of approximately A$2m as at 31 December 2013.

(7) Information in this announcement regarding RTG has been prepared by RTG 
and RTG takes responsibility for the accuracy and completeness of that 
(8) Assumes an exchange rate on 21 February 2014 of USD:AUD 1.114.
(9) Information in this announcement regarding Sierra has been prepared by 
Sierra and Sierra takes responsibility for the accuracy and completeness of 
that information.
(10) The joint venture arrangements with Galeo are subject to a Memorandum of 
Understanding announced in November 2013 and also a subsequent conditional MOU 
with Galeo which allows it to earn up to 42% of the joint venture by mining 
1.5Mt of waste, subject to satisfaction of a range of conditions, including 
Sierra shareholder approval.

Cautionary Note Regarding Forward Looking Statements

Certain statements contained in this announcement constitute forward looking 
statements within the meaning of applicable securities laws including, among 
others, statements made or implied relating to RTG's and / or Sierra's 
objectives, strategies to achieve those objectives, beliefs, plans, estimates 
and intentions, and similar statements concerning anticipated future events, 
results, circumstances, performance or expectations that are not historical 

Forward looking statements generally can be identified by words such as 
"objective", "may", "will", "expect", "likely", "intend", "estimate", 
"anticipate", "believe", "should", "plans" or similar expressions suggesting 
future outcomes or events. All statements, other than statements of historical 
fact, included herein including, without limitation; statements about the 
completion of the Merger, development and exploration potential of Sierra's 
properties, use of proceeds and the business objectives of RTG, Sierra and the 
merged entity, are forward-looking statements. By their nature, such forward 
looking statements are not guarantees of future performance and reflect RTG's 
and Sierra's current beliefs based on information currently available to them. 
 Such statements involve estimates and assumptions that are subject to a 
number of known and unknown risks, uncertainties and other factors inherent in 
the businesses of RTG and Sierra and the risk factors discussed in materials 
filed with the relevant securities regulatory authorities from time to time 
which may cause the actual results, performance or achievements of the 
companies to be materially different from any future results, performance or 
achievements expressed or implied by such forward looking statements.  Those 
risks and uncertainties include, but are not limited to: the mining industry 
(including operational risks; risks in exploration, and development; the 
uncertainties involved in the discovery and delineation of mineral deposits, 
resources or reserves; and the uncertainty of mineral resource and mineral 
reserve estimates); the risk of gold, copper and other commodity price and 
foreign exchange rate fluctuations; the ability to fund the capital and 
operating expenses necessary to achieve stated business objectives; the 
uncertainty associated with commercial negotiations and negotiating with 
foreign governments; the risks associated with international business 
activities including disputes with joint venture partners; risks related to 
operating in the counties in which the respective companies operate; 
environmental risk; the dependence on key personnel; and the ability to access 
capital markets.

Readers are cautioned not to place undue reliance on these forward looking 
statements, which speak only as of the date the statements were made and 
readers are advised to consider such forward looking statements in light of 
the risks set forth above.  Except as required by applicable securities laws, 
RTG and Sierra assume no obligation to update or revise any forward looking 
statements to reflect new information or the occurrence of future events or 

This press release does not constitute an offer to sell or the solicitation of 
an offer to buy, nor shall there be any sale of these securities, in any 
jurisdiction in which such offer, solicitation or sale would be unlawful prior 
to registration or qualification under the securities laws of such 
jurisdiction. The securities have not been and will not be registered under 
the United States Securities Act of 1933, as amended (the "U.S. Securities 
Act"), or any state securities laws and may not be offered or sold within the 
United States, unless an exemption from such registration is available.

SOURCE  RTG Mining Inc. 
Enquiries  RTG  Michael Carrick Chairman  Tel: +61 8 6489 2900 
Fax: +61 8 6489 2920 Email:mcarrick@rtgmining.com  Justine Magee Chief 
Executive Officer  Tel: +61 8 6489 2900 Fax: +61 8 6489 2920 
Email:jmagee@rtgmining.com  Sierra  Ian Middlemas Chairman  Tel: +44 207 478 
3900 Fax: +44 207 434 4450  Matthew Syme Managing Director  Tel: +61 8 9322 
6322 Fax: +61 8 9322 6558 Email:matt.syme@sierramining.com.au   
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