McIntyre Partners Backs Montana Exploration

Calgary-based Montana Exploration Corp., a junior oil and gas company, has closed a previously-announced strategic financing with an affiliate of McIntryre Partners totaling C$3.5 million. Proceeds of the investment will be used to drill wells targeting oil production and conduct seismic and other oilfield operations. McIntyre is a British private investment firm focused on natural resources and infrastructure sectors.

PRESS RELEASE

Montana Exploration Corp. announces closing of strategic financing with McIntyre Partners and completion of restructuring transactions

CALGARY, March 25, 2013 /CNW/ – Montana Exploration Corp. (“Montana”) is pleased to announce closing on March 22, 2013 of the previously announced private placement (the “Private Placement”) with Wolseley Ventures Limited (an affiliate of McIntyre Partners) (the “Investor”) for aggregate gross proceeds of $3.5 million. The Private Placement resulted in the issuance of 17,500,000 units at $0.20 per unit, each unit consisting of one common share in the capital of Montana and one warrant exercisable for one common share at a price of $0.25 for a period of 12 months. The Investor has the ability to invest up to an additional $8.425 million upon the exercise of the warrants and a purchase option priced at $0.38 per common share.

Montana intends to use the net proceeds of the Private Placement to fulfill its initial obligations under its farmout and participation agreement, publicly disclosed on May 8, 2012, to drill wells targeting oil production and conduct seismic and other oilfield operations on Montana’s substantial acreage position, an extension of the Shaunavon trend from Saskatchewan. Montana’s joint venture partner under the agreement is a private Denver based exploration company which is supported by a substantial New York-based, private equity firm.
As a result of the shareholder approvals received on March 14, 2013 and the completion of the Private Placement, Montana has a considerably simplified capital structure consisting of common shares, warrants and options and has materially reduced its indebtedness, positioning the corporation to pursue its Shaunavon drilling program and other exploration prospects, with a high quality board and management team, a strong shareholder base and a competent and well financed joint venture partner.

Concurrently with closing of the Private Placement, Jack Moore has resigned from the board of directors of Montana and the board has appointed two nominees of McIntyre Partners, Julian McIntyre and Dr. Alex Kulpecz, as directors. The board of directors proposes to renominate Jack Moore to the board at the next annual general meeting.

In addition to completion of the Private Placement, the following transactions which were conditions to closing of the Private Placement have also been completed:

(i) Montana has entered into a purchase agreement with the Investor pursuant to which the Investor has the option, in its sole discretion, for a period of one year to tender a company to Montana for a value to be equal to the confirmed value of the cash and assets held by such company of up to $6,900,000. It is the intention of the parties that the assets of the company will be cash (not to exceed $4,050,000) and interests that Montana and the Investor have jointly identified in Toole County, Montana, located approximately 100 miles west of Montana’s current lands. If this option is exercised by the Investor, Montana will pay the purchase price by the issuance of common shares at a price of $0.38 per common share, which would result in the issuance of up to 18,157,894 common shares;
(ii) Montana has amended the terms of its Series A Convertible First Preferred Shares, Series B Convertible First Preferred Shares and Series C Convertible First Preferred Shares (collectively, the “Preferred Shares”) to deem the conversion of the Preferred Shares into units (the “Preferred Units”), each Preferred Unit consisting of one common share (with an effective price of $0.40 based on the original subscription price, the consolidation of the common shares effective February 28, 2011 and the increase to the exchange ratio approved at last year’s shareholders meeting) and one warrant to purchase an additional common share at an exercise price of $0.50 (reduced from $0.80) expiring on March 22, 2014 (an extension of approximately one year). Holders of Preferred Shares are entitled to receive a Preferred Unit for every eight (8) Series A Convertible First Preferred Shares or Series B Convertible First Preferred Shares and 1.25 Preferred Units for each Series C Convertible First Preferred Share submitted for conversation. Holders of Preferred Shares are
reminded to complete and send their letter of transmittals to Computershare along with the share certificates representing Preferred Shares. Letters of Transmittal are available on SEDAR under Montana’s profile at www.sedar.com.
(iii) $2.46 million of the principal amount owing by Montana under its senior debt (“Senior Debt”) to Rioco Partners, Ltd. has been converted into common shares at a conversion price of $0.25 per common share; and (iv) Rioco Partners, Ltd. has agreed to either acquire the indebtedness of the Corporation to Brookfield Bridge Lending Fund Inc. or to lend sufficient funds to the Corporation to re-pay the indebtedness, in either case on terms such that the amount of the indebtedness will be effectively extended for 18 months.
Cornerstone Capital Partnership LP and its sub-agents acted as financial advisors to Montana in connection with the above transactions and received 100,000 common shares issued at a deemed price of $0.25 per common share, a finder’s fee associated with the Private Placement consisting of $263,000 in cash and 1,050,000 warrants to purchase common shares with an exercise price of $0.25 and a term expiring two years from the date hereof. Now that the initial financing is complete, Montana intends to complete its previously announced rights offering at a price of $0.20 per common share in order to provide existing shareholders with the opportunity to purchase additional common shares at the same price as the equity issued to the Investor under the Private Placement.

SOURCE: Montana Exploration Corp.

For further information:
Charles Selby, Chairman & CEO
Telephone: (403) 265 9091 (ext 247)
Fax: (403) 265 9021
Email: Info@altacanada.com
Don Foulkes, President
Telephone: (403) 265 9091 (ext 248)
Fax: (403) 265 9021
Email: Info@altacanada.com
CO: Montana Exploration Corp.
CNW 09:00e 25-MAR-13

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