Pilot Gold to acquire Cadillac Mining

Vancouver, British Columbia .- Cadillac Mining Corporation (TSXV:CQX) (“Cadillac” or the “Company”) announces that it has entered into an arrangement agreement (the “Agreement”) pursuant to which Pilot Gold Inc. (TSX:PLG) (“Pilot Gold”) has agreed to acquire all the issued and outstanding shares of Cadillac by way of a court-approved plan of arrangement (the “Transaction”).

Pursuant to the terms of the Agreement, Cadillac shareholders will receive 0.12195 of a Pilot Gold share and 0.12195 of a Pilot Gold share purchase warrant (“Pilot Warrants”) for each common share of Cadillac held.  Each Pilot Warrant shall entitle the holder to acquire one Pilot Gold share at an exercise price of C$2.00 for a period of two years from the closing of the Transaction.  Existing Cadillac warrants and options will be exercisable for Pilot Gold shares, adjusted in respect of exercise price and number, based on the 0.12195 exchange ratio.  Further, Pilot will retire Cadillac’s working capital deficiency at closing of the Transaction.

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

Within the context of persistent depressed junior equity markets, the means of raising adequate financing to properly explore the large complex gold system at Goldstrike in southwestern Utah was not clear to Cadillac’s management, and at best potentially extremely dilutive to the Company’s shareholders.  Not only has Pilot the financial resources to explore the Goldstrike property, its talented geological team is very experienced in the Great Basin, having  discovered the multi-million ounce Long Canyon deposit near Wells, Nevada, ultimately resulting in its sale to Newmont Mining in 2011 for $2.3 billion.

In addition to continued exposure to progress at the Goldstrike project and its interests on the Cadillac Break in Quebec, Cadillac’s shareholders will also participate in developments in Pilot Gold’s broad exploration portfolio, highlighted by Kinsley Mountain in Nevada and TV Tower and Halilaga in Turkey.  Kinsley Mountain, situated approximately 250 miles north of Goldstrike, and also at the eastern margin of the Great Basin, is of particular interest to Cadillac, due to the numerous striking historical and geological parallels between the two properties.  Recently, after a considerable exploration effort at Kinsley, Pilot announced very promising high-grade drill results in Paleozoic strata.  Cadillac’s management regards the Agreement with Pilot as the best route available to unlock Goldstrike’s potential, whilst also participating in the development of Pilot Gold’s portfolio of excellent projects.

Consequently, the Board of Directors of Cadillac (the “Board”) have unanimously approved the Transaction and will recommend that Cadillac shareholders vote in favour of the Transaction. Certain of Cadillac’s shareholders, including all of the senior officers and members of the Board 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 ⅔ of the votes cast at a special meeting of Cadillac shareholders that is expected to be held in August 2014, followed by the approval of the Supreme 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”).

The terms and conditions of the Agreement will be disclosed in more detail in the Cadillac management information circular which is expected to be filed and mailed to Cadillac shareholders in July 2014.  It is anticipated that the Transaction, if approved by Cadillac’s shareholders, will be completed in late August 2014.   Copies of the Plan of Arrangement and management information circular will be filed with Canadian securities regulators and will be available under Cadillac’s company profile at www.sedar.com.

Under the Agreement, Pilot Gold will make available to Cadillac a senior secured line of credit of $200,000 to meet certain of Cadillac’s costs prior to completion of the transaction. The loan and accrued interest become due and payable in cash immediately upon termination of the Agreement, or cancelled upon completion of the Transaction.

On June 9, 2014, Cadillac and Morecore Drilling Inc. entered into a settlement agreement resulting in the removal of a mechanic’s lien in the State of Utah against the Cadillac’s Goldstrike project BLM claims.

About Cadillac Mining Corporation

Cadillac Mining Corporation is a junior exploration company based in Vancouver, Canada focused on large-scale precious metal projects the Great Basin in the western USA and in the Abitibi geological province in Canada. The Company’s long term objective is the discovery of a major deposit through carefully planned exploration strategies.

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