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Paulson, Tocqueville, AngloGold grab greater stake of Tower Hill

International Tower Hill Mines Ltd. Dec. 15 said it has arranged a US$22 million non-brokered private placement financing. The offering will consist of 45,833,334 company shares, or roughly 39.4 percent of the 116.4 million shares currently issued and outstanding, at US48 cents per share.

Tower Hill intends to use the net proceeds of the private placement to pay a roughly US$14.8 million payment due in January for the acquisition of certain mining claims and related rights in the vicinity of the company's Livengood property; continuation of optimization studies to further improve and de-risk the Interior Alaska gold project; continue the required environmental baseline studies; and for general working capital purposes.

The offering will be taken up by International Tower Hill Mines three largest shareholders: Paulson & Co. Inc., Tocqueville Asset Management, L.P. and AngloGold Ashanti (U.S.A.) Exploration Inc. Upon completion of the financing, Paulson (34.2 percent), Tocqueville (19.7 percent) and AngloGold (9.5 percent) will beneficially own approximately 63.4 percent of the company's 162,186,972 common shares.

In connection with the financing, International Tower Hill Mines has agreed to appoint one Paulson designee to the company's board of directors at closing, and Paulson will have the right to nominate two individuals for election to the board of directors at Tower Hill's next annual meeting of shareholders.

Typically such a financing - where more than 25 percent of the currently issued and outstanding common shares are being offered and the outcome will materially affect control of the company - would require shareholder approval under Toronto Stock Exchange rules. However, the Tower Hill has applied for a "financial hardship" exemption from the requirement to obtain shareholder approval.

The company's directors, who are free from any interest in the offering and are unrelated to the investors, have authorized the hardship application on the basis that the company is in serious financial difficulty and the offering is designed to improve the company's financial situation.

As a consequence of relying upon the financial hardship exemption, the Toronto Stock Exchange announced it has initiated a remedial de-listing review, which is normal practice when a listed issuer seeks to rely on this exemption.

Tower Hill believes that it will be in compliance with all of the TSX listing requirements, but warns that no assurance can be provided as to the outcome of the review.



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