Red Eagle Mining extends superior offer to acquire CB Gold

VANCOUVER, Sept. 1, 2015 /CNW/ - Red Eagle Mining Corp. (TSX-V: RD, OTCQX: RDEMF, SSE-V: RDCL) has extended the expiry of its share exchange takeover bid (the "Offer") to acquire all of the issued and outstanding common shares ("Shares") of CB Gold Inc. ("CB Gold") from August 31, 2015 to September 14, 2015.  A notice of variation and extension has been filed and mailed to CB Gold shareholders. 

• Holders of 48% of CB Gold Shares have already tendered their Shares to Red Eagle Mining's Offer. 
• Red Eagle Mining has waived the minimum tender condition and intends to take up all Shares tendered on September 14, 2015.
• Red Eagle Mining has commenced purchasing Shares on the TSXV and may effect market purchases of up to 5% of the Shares.
• Red Eagle Mining intends to apply to the Commission to cease-trade: (i) CB Gold's shareholder rights plan, (ii) CB Gold's private placement with Batero, and (iii) Batero's bid for CB Gold.

Since CB Gold's shareholder rights plan requires a minimum tender of 50.1%, Red Eagle Mining intends to apply to the British Columbia Securities Commission (the "Commission") to cease-trade CB Gold's shareholder rights plan.  Immediately following the announcement of Batero Gold Corp.'s ("Batero") competing 'insider' bid, CB Gold announced that it had issued 11,500,000 Shares to Batero.  These Shares were issued by way of private placement in violation of applicable securities laws and to the best of our knowledge the private placement has still not received final approval of the TSX Venture Exchange ("TSXV").  Red Eagle Mining intends to also apply to the Commission to have this private placement cease traded or reversed.  Excluding Shares issued in the private placement, holders of 52% of CB Gold Shares have already tendered their Shares to Red Eagle Mining's Offer.  As previously announced, Red Eagle Mining has also advised the Commission of a number of other violations of securities laws which have been committed by CB Gold and Batero in relation to the Batero bid and intends to make an application seeking such relief as the Commission may see fit to impose, including a cease trade of the Batero bid.

The Offer now expires September 14, 2015.  Shareholders whose CB Gold Shares are registered in the name of an investment dealer, stockbroker, bank, trust company or other nominee should instruct that nominee to promptly tender their Shares.  Shareholders are encouraged to provide tender instructions well in advance of the expiry as nominees may implement internal tender submission deadlines as early as Thursday, September 10, 2015.  Shares not tendered by the deadline are at risk of being orphaned.  No further action is required for Shares which have already been tendered.

Red Eagle Mining has been advised that CB Gold's entrenched management is actively spreading misleading information with regards to Red Eagle Mining and the Offer.  Red Eagle Mining outlines the reasons and benefits of tendering to its Offer below and addresses concerns with the actions of CB Gold and Batero, of which shareholders should be aware of and carefully consider before making their decision. 

Reasons to Accept the Red Eagle Mining Offer

Support of CB Gold Shareholders - Holders of 48% of CB Gold Shares or 67% of disinterested shareholders have already tendered their shares to Red Eagle Mining's Offer.  Excluding shares issued in the Batero private placement, holders of 52% of CB Gold Shares have already tendered their shares to Red Eagle Mining's Offer.

Advanced Gold Development Company Exposure - Participation in Red Eagle Mining's flagship project, the 100% owned, fully permitted, fully financed and in construction Santa Rosa Gold Project in Colombia which is expected to be in production during 2016.  Red Eagle Mining also plans to aggressively advance development of the Vetas gold deposit.

Superior Financial Capacity - Red Eagle Mining's strong financial capacity and institutional shareholder base, including significant shareholders Liberty Metals & Mining Holdings LLC, Stracon GyM and Orion Mine Finance.  Red Eagle Mining has raised over $100 million in equity and debt financing during 2015.

Significant Premium - The Offer represents a premium of 46% to CB Gold's 20-day VWAP of $0.035 and CB Gold's closing share price of $0.035 on June 12, 2015, the last trading day prior to CB Gold's announcement of Red Eagle Mining's proposal.

Exposure to a Superior Suite of Assets - The Batero-Quinchia project has permitting challenges and is not feasible at current gold prices.  Accordingly, Batero has a market capitalization of only approximately $7 million and will be inadequately funded to sufficiently advance its projects with less than $5 million in cash if its offer were to be successful.

Colombian Experience - Red Eagle Mining's proven experience in discovery, permitting, financing, and developing underground gold projects in Colombia.  The Santa Rosa Gold Project is the first significant gold mine in Colombia to be permitted and commence construction in decades.

No Control Position - Without a controlling shareholder, Red Eagle Mining is managed for the benefit of all shareholders.  CB Gold and Batero insider, the Navarro-Grau Group has a history of obtaining control of public companies through diluting existing shareholders.

All Share Consideration - In current gold markets, share consideration offers CB Gold shareholders the ability to have additional exposure to future upside through the Santa Rosa Gold Project and the Vetas gold deposit, rather than crystalizing losses at the bottom of the cycle through Batero's partial cash offer.

About the Red Eagle Mining Offer

The Red Eagle Mining Offer is for all of the issued and outstanding Shares of CB Gold, including any CB Gold Shares that may become issued and outstanding upon the exercise of existing CB Gold convertible securities. The Offer is subject to certain customary conditions including CB Gold's shareholder rights plan being waived, invalidated, or cease-traded, receipt of all necessary regulatory approvals and no material adverse change in CB Gold.  The Offer will not be subject to the approval of Red Eagle Mining's shareholders and is not subject to any financing or due diligence conditions.

Under the terms of the Offer, each CB Gold Share will be exchanged for 0.162 of a Red Eagle Mining common share with an implied value of $0.05 per CB Gold Share and an implied total offer value for all outstanding CB Gold Shares of approximately $8,400,000 based on Red Eagle Mining's 20-day volume weighted average share price ("VWAP") of $0.31 on June 12, 2015, the last trading day prior to CB Gold's announcement of Red Eagle Mining's proposal.  The Offer will remain open until 4:00PM (Toronto time) on September 14, 2015 ("Expiry Time"), unless withdrawn or extended.

The full details of the Offer are set out in the takeover bid circular ("Circular"), accompanying offer documents and the notice of variation and extension (collectively the "Offer Documents"), which Red Eagle Mining has filed with Canadian securities regulatory authorities on SEDAR and mailed to CB Gold's shareholders.  CB Gold shareholders are encouraged to carefully review the Offer Documents, which contains the full terms and conditions of the Offer as well as detailed instructions on how to tender their common shares to the Offer.  No further action is required for Shares which have already been tendered.

This press release does not constitute an offer to buy or an invitation to sell, or the solicitation of an offer to buy or invitation to sell, any securities of Red Eagle Mining or CB Gold.  Such an offer may only be made pursuant to an offer and takeover bid circular filed with the securities regulatory authorities in Canada and pursuant to registration or qualification under the securities laws of any other such jurisdiction.

How to Tender Shares to the Offer

All questions regarding the Offer and how to tender CB Gold Shares should be directed to the Information Agent, Laurel Hill Advisory Group at +1 877 452 7184 (North American Toll-Free) or +1 416 304 0211 (Collect Calls) or by email at assistance@laurelhill.com.  Shareholders who wish to accept the Offer may do so before the Expiry Time by delivering to Computershare (the "Depositary") (a) certificates representing the CB Gold shares to be tendered, (b) a properly completed and executed letter of transmittal (the "Letter of Transmittal") or a manually executed facsimile, and (c) any other documents required by the instructions set out in the Offer Documents.  The Letter of Transmittal was included in the Offer Documents and specified the offices of the Depositary at which valid deposits under the Offer may be made.  Alternatively, shareholders may follow the procedure for guaranteed delivery using a notice of guaranteed delivery, as described in the Offer Documents.  Shareholders whose CB Gold Shares are registered in the name of an investment dealer, stockbroker, bank, trust company or other nominee should contact that nominee for assistance if they wish to accept the Offer.

Advisors

Red Eagle Mining has engaged National Bank Financial Inc. as its financial advisor and Farris Vaughan Wills & Murphy LLP as its legal counsel in respect of the Offer.

About Red Eagle Mining

Red Eagle Mining is a well-financed gold exploration and development corporation with an experienced mine-development team.  Management is focused on building shareholder value through discovering and developing gold projects with low costs and low technical risks in Colombia, a jurisdiction with prolific historic production but until recently limited modern exploration.  Red Eagle Mining is developing the 100 square kilometre historic Santa Rosa Gold Project located in the Antioquia Batholith.  Construction is underway at the fully permitted and fully financed San Ramon Gold Mine with production expected to commence in the second half of 2016.

For assistance with the Offer please contact the Information Agent:

Laurel Hill Advisory Group
+1 877 452 7184 North American Toll-Free
+1 416 304 0211 Collect Calls Outside North America
+1 416 646 2415 Facsimile
assistance@laurelhill.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release includes forward-looking statements that are subject to risks and uncertainties.  All statements within, other than statements of historical fact, are to be considered forward looking.  Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements.  Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions.  There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties.  We do not assume any obligation to update any forward-looking statements. This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States.  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 or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

SOURCE Red Eagle Mining Corp.