Pilot Gold Inc. (TSX:PLG) is pleased to announce that it has entered into an arrangement agreement with Cadillac Mining Corporation (TSX-V:CQX) pursuant to which the Company has agreed to acquire all of the issued and outstanding shares of Cadillac by way of a court-approved plan of arrangement.
 

Cadillac’s Goldstrike project, located in Western Utah, is a sediment-hosted gold project that produced roughly 209,000 oz of gold from 1988 to 1996 in an open pit heap leach operation.
 

“Upon closing of the acquisition, Goldstrike will enhance our high quality portfolio of Eastern Great Basin projects,” stated Matt Lennox-King, President and CEO. “This transaction provides us with another data rich, past producing, oxide heap leach project that our team will incubate as we continue to advance our Kinsley and TV Tower projects. With two significant porphyry discoveries at TV Tower and ongoing growth at Kinsley, Cadillac shareholders will gain access to our world class advanced exploration portfolio, strong treasury and Pilot Gold’s proven technical and management team.”
 

Pursuant to the terms of the Agreement, Cadillac shareholders will receive (i) 0.12195 of a Pilot Gold share and (ii) 0.12195 of a Pilot Gold share purchase warrant for each common share of Cadillac held. Each whole Pilot Warrant shall entitle the holder to acquire one Pilot Gold share at an exercise price of C$2.00. The Pilot Warrants will expire two years from the closing of the Transaction. Existing Cadillac warrants and stock options will be exercisable for Pilot Gold shares, adjusted in respect of exercise price and number, based on the 0.12195 exchange ratio.
 

The Transaction represents a 121% premium over the previous closing price of Cadillac as of June 12, 2014, the last full trading day prior to the announcement of the Agreement and a 95% premium to the 20-day volume-weighted average price.
 

The Board of Directors of Cadillac have unanimously approved the Transaction and will recommend that Cadillac shareholders vote in favour of the Transaction. Each senior officer of Cadillac, each member of the Cadillac Board and an advisor to Cadillac have entered into voting and support agreements with Pilot Gold pursuant to which each has agreed to vote in favour of the Transaction, which together represent approximately 30.1% of the issued and outstanding common shares of Cadillac.
 

Transaction Details
 

The Transaction will be carried out by way of a plan of arrangement, the implementation of which will be subject to shareholder approval representing at least 66 2/3% of the votes cast at a special meeting of Cadillac shareholders that is expected to be held in mid-August 2014, followed by the approval of the Superior Court of British Columbia. Pursuant to the terms of the Agreement, the proposed transaction is also subject to applicable regulatory and stock exchange approvals and the satisfaction of certain closing conditions customary in transactions of this nature. The Agreement also provides for, among other things, customary board support and non-solicitation covenants (subject to the fiduciary obligations of the Cadillac Board and a Pilot Gold “right to match”).
 

It is anticipated that the Transaction, if approved by Cadillac’s shareholders, will be completed in late August.
 

Under the Agreement, Pilot Gold will make available to Cadillac an interest-bearing senior secured line of credit of up to $200,000 to meet certain of Cadillac’s costs prior to completion of the Transaction. The loan and accrued interest become due and payable upon the occurrence of certain events, including upon termination of the Agreement.
 

Blake, Cassels & Graydon LLP is acting as legal counsel to Pilot Gold. Legal counsel to Cadillac is McCullough O’Connor Irwin LLP.
 

ABOUT PILOT GOLD
 

Pilot Gold is a well-funded gold exploration and development company led by a proven technical team that continues to discover and define high-quality projects featuring strong grades, meaningful size and mining-friendly addresses. Our three key assets include interests in the Kinsley project in Nevada and the TV Tower and Halilaga projects in Turkey, each of which has the ability to become a foundational asset. We also have a pipeline of projects characterized by large land positions and district-wide potential that can meet our growth needs for years to come.