Montana Exploration Corp. announces agreement to acquire Brilliant Resources Inc. to finance Shaunavon drilling program

CALGARY, Oct. 7, 2014 /CNW/ - Montana Exploration Corp. ("MTZ") (TSXV:MTZ) is pleased to announce that MTZ will acquire Brilliant Resources Inc. ("Brilliant") (TSXV:BLT) under a Plan of Arrangement subject to approval by the shareholders of both companies. Brilliant presently has approximately $8 million of free cash that will enable MTZ to implement the first phase of a financing plan to consolidate its interests in the Shaunavon Play in Northern Montana and to drill wells offsetting its recent Upper Shaunavon oil discovery. To facilitate the financing, certain shareholders of MTZ and Brilliant will enter into lockup agreements and the shareholders of MTZ who have funded recent operations through the subscription for convertible debentures will cause those debentures to be exchanged for common shares of MTZ at closing. The number of MTZ shares to be issued to the Brilliant shareholders is to be determined based upon the adjusted net working capital of Brilliant. The adjusted working capital of Brilliant will be multiplied by 1.15 and the share price of MTZ will be the lesser of the price per share at which the next material financing of common shares of Montana is completed and $0.25. As part of the transaction, Management of MTZ will continue to pursue the $80 million legal action that Brilliant has against the Republic of Equatorial Guinea.  Ivory Resources Inc., a wholly owned subsidiary of Brilliant, has requested arbitration before the International Chamber of Commerce and the net proceeds of any recovery will be shared between MTZ and the current shareholders of Brilliant who will receive special distribution rights upon closing.

MTZ has previously arrived at an agreement to purchase 36,000 net acres held by its joint venture partner in Montana for $4 million USD to re-establish MTZ's 100% working interest across the joint venture block. The acquisition will increase the impact of new development drilling activities on MTZ and enhance the working interest of the company on future exploration activities. Brilliant will advance $4 million Cdn. to MTZ to facilitate closing under a secured loan bearing 10% interest that will be consolidated upon completion of the Plan of Arrangement.

The board of directors of MTZ supports the business combination based upon Brilliant's free cash, strong shareholder base, litigation upside, management support and integration with MTZ's financing plan. MTZ is producing from the Upper Shaunavon and plans to exploit targets in both the Upper Shaunavon and the Lower Shaunavon through a combination of vertical drilling and horizontal drilling.

Forward Looking Statements

This press release contains statements that constitute "forward-looking information" or "forward-looking" statements" (collectively "forward-looking information") within the meaning of applicable securities legislation. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", believe", "expect", "plan", "intend", "forecast", "target", "project", "guidance", "may", "will", "should" "could", "estimate", "predict" or similar words suggesting future outcomes or language suggesting an outlook.

Various assumptions were used in drawing the conclusions or making the forecasts and projections contained in the forward-looking information contained in this press release. In respect of the forward-looking statements and information concerning the anticipated completion of the Arrangement, Montana has provided such in reliance on certain assumptions that they believe are reasonable at this time, including the necessary regulatory, stock exchange and other third party approvals; and the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Arrangement.

Forward-looking information is based on current expectations, estimates and projections that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Montana and described in the forward-looking information contained in this press release. Undue reliance should not be placed on forward-looking information. The material risk factors include, but are not limited to: failure of Montana to obtain necessary regulatory, stock exchange and other third party approvals; the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; and Montana's ability to implement its business strategy. Readers are cautioned that the foregoing list of risk factors is not exhaustive.

The forward-looking statements and information contained in this press release are also affected by the risk factors, forward-looking statements and assumptions and uncertainties described in Montana's reports on file with applicable securities regulatory authorities and which may be accessed on Montana's each party's SEDAR profile at www.sedar.com.  Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive.  When relying on our forward-looking statements to make decisions with respect to Montana, investors and others should carefully consider the foregoing factors and other uncertainties and potential events.  Furthermore, the forward-looking statements contained in this press release are made as of the date of this press release and Montana does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.  The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

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SOURCE Montana Exploration Corp.

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