November 12, 2007 07:00 ET

Tyler Resources Board of Directors Unanimously Recommends Shareholders Reject Unsolicited Offer by Mercator Minerals Ltd.

CALGARY, ALBERTA--(Marketwire - Nov. 12, 2007) - Tyler Resources Inc. (TSX VENTURE:TYS) ("Tyler" or the "Company") understands that on November 9, 2007 Mercator Minerals Ltd. ("Mercator") formally commenced an unsolicited offer to purchase all of the issued and outstanding common shares of Tyler on the basis of 0.113 of a Mercator common share for each Tyler common share.

Based on the closing price of Mercator common shares on the Toronto Stock Exchange on November 9, 2007, the unsolicited Mercator offer is equivalent to $1.09 per Tyler common share.

Tyler's Board of Directors (the "Board"), based on the advice and recommendations of its Special Committee of independent directors, unanimously recommends that Tyler shareholders REJECT the Mercator unsolicited takeover bid and NOT tender their shares to the offer. The Board has based its recommendation on a number of factors, including that:

- The Mercator offer significantly undervalues the Bahuerachi deposit and is a clear attempt to acquire Tyler before Tyler shareholders can realize the full value for their shares as the Company increases the resource base at Bahuerachi and moves towards the higher valuation typically seen for companies as they advance closer to feasibility, development and production;

- Tyler has been approached by, and has initiated contact with, other parties who have expressed an interest in pursuing potential alternative transactions that may provide superior value to Tyler shareholders;

- The terms of the offer are substantially lower than an offer Mercator made to the Company on October 5, 2007, which contemplated an offer of $1.25 for each Tyler common share implying an exchange ratio of 0.1437 on October 5, 2007, and which Tyler viewed as inadequate and allowed to expire on October 10, 2007.

Following further review, consideration and evaluation of the offer in consultation with its legal and financial advisors, Tyler's Board of Directors will issue and file with Canadian securities commissions a Directors' Circular that will contain important information. Shareholders are urged to read the Directors' Circular in its entirety once it is made available, including the Board of Directors' formal recommendation regarding the offer.

Tyler's Special Committee of independent directors has engaged CIBC World Markets as financial advisor and Burnet, Duckworth & Palmer LLP as legal counsel. The Special Committee, with the assistance of its financial and legal advisors, is considering all possible strategic alternatives available to Tyler to maximize shareholder value including any competing offers it may receive.

Company Statements

Alan Craven, Chairman of the Special Committee said, "We believe Mercator's previous offer significantly undervalued Tyler. This new unsolicited offer is worse. Tyler shareholders own 100% of a world-class asset in the Bahuerachi deposit and emerging mineral district. Mercator's opportunistic offer is inadequate as it fails to recognize Tyler's future growth profile based on the remaining deposit expansion potential and strong discovery potential at Bahuerachi."

Commented Jean-Pierre Jutras, Director, President and CEO of Tyler, "Tyler has delivered a 525 million tonne mineral deposit (measured and indicated resource) from the grassroots stage within three years of commencement of drilling. Based on this track record and management's strong belief that there remains significant upside both at the deposit and regional scale to materially expand on the current resource, it is clear to us that the Mercator offer falls significantly short of providing fair value to our shareholders and seeks to deprive them of significant upside potential. Results from ongoing drilling and an update of the mineral resource at Bahuerachi at year end will be the first steps in demonstrating Bahuerachi's true potential, and an offer at this time will prevent Tyler from delivering the results of its stated work programs and pre-empt Tyler's shareholders from realizing the higher valuation associated with an increased resource base and progress towards production."

"Tyler's value is recognized even by Mercator's own financial advisor, Jennings Capital Inc., which issued a research report on October 10, 2007 establishing a 12-month target price for Tyler of $2.50 per share, implying a potential gain of 121% based on Tyler's closing price on November 9, 2007. In contrast, in a separate October 18, 2007 research report Jennings established a 12-month target price of $11.50 for Mercator, implying a potential gain of just 19% based on Mercator's closing price of $9.68 on November 9, 2007," added Mr. Jutras.

Bahuerachi Property

Tyler's Bahuerachi property is becoming recognized as a world-class base and precious metals district with strong economic potential. Tyler has filed with the applicable securities commissions a detailed National Instrument 43-101 compliant Preliminary Economic Assessment Report or scoping study dated effective November 8, 2007. The study outlined that the Bahuerachi deposit, as it is known today in its early phases of work, could generate a pre-tax internal rate of return of 53%, a preproduction capital payback of less than two years and a net present value of US$1.9 billion at an 8% discount rate based on three year historical average metal prices, which are substantially lower than current prices. The scoping study suggests that Bahuerachi could support an initial mine life of 12 years based on an analysis of only 251 million tonnes, or 41%, of the measured, indicated and inferred resource tonnage identified in the most recent Bahuerachi resource estimate, in May 2007.

Tyler expects to complete a pre-feasibility study in 2008 that will significantly build on the results of the scoping study. The pre-feasibility study will be based on an updated resource estimate, which will incorporate all new drilling information generated from May to December of 2007. This new drilling information, including significant mineralization intercepts in five drill holes disclosed by Tyler on June 13, 2007, six drill holes disclosed by Tyler on August 2, 2007, and all current and ongoing drilling, was not incorporated into the May 2007 resource estimate and therefore the subsequent scoping study.

The Independent Qualified Persons who authored the scoping study were Mr. Herb Welhener, Vice President, Independent Mining Consultants, Inc. of Tucson, Arizona, and Joseph M. Keane, P. Eng., Principal Metallurgical Engineer of K.D. Engineering Company of Tucson, Arizona. Both are Qualified Persons, as defined by Canada's National Instrument 43-101 for the disclosure of mineral projects. As required by National Instrument 43-101, Tyler cautions that the scoping study is a preliminary assessment and is preliminary in nature. It includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized. The scoping study is available for review on SEDAR and on Tyler's website.

The May 2007 resource estimate for the Bahuerachi deposit is filed on SEDAR. Keith McCandlish, P, Geol., is responsible for this resource estimate and is an Independent Qualified Person as defined by NI 43-101. A summary of the May 2007 resource estimate is included in the table below.

Bahuerachi Main Zone Deposit at a 0.2% copper grade cutoff

Resource CuEq CuZnEq
Category Grade Grade
classification Tonnes Cu(%) Mo(%) Au(g/t) Ag(g/t) Zn(%) (%)(1) (%)(1)
Measured 92,398,260 0.47 0.008 0.05 3.86 0.44 0.61 0.84
Indicated 432,111,525 0.38 0.008 0.03 4.07 0.57 0.52 0.82
Measured +
Indicated 524,509,785 0.40 0.008 0.03 4.03 0.55 0.54 0.83
Inferred 80,174,744 0.38 0.007 0.02 3.11 0.45 0.49 0.74

(1) For the purpose of the final report as delivered by AGL, CuEq and CuZnEq
grades based on revised metal price assumptions as follow: Copper
US$1.50/lb, Molybdenum US$15.00/lb, Gold US$550/Oz, Silver US$10.00/Oz
and Zinc US$0.80/lb. Copper equivalents, metallurgical recoveries and
net smelter returns are assumed to be 100%.

Tyler also announces that it has released its audited consolidated financial statements and accompanying management's discussion and analysis for the fiscal year ended July 31, 2007, copies of which are available on SEDAR.

About Tyler Resources Inc.

Tyler Resources Inc. is a well-funded Canadian junior exploration company focused on base and precious metals exploration in Mexico. Tyler's primary project is the Bahuerachi property, which hosts Mexico's fourth largest mineralized porphyry deposit. As part of its ongoing drill program, the Company has now drilled in excess of 52,000 meters of combined diamond and reverse circulation drilling since 2004, making it one of the most active Canadian junior exploration companies operating in Mexico. For more information, visit www.tylerresources.com.

Cautionary language: Except for the historical and present factual information contained herein, the matters set forth in this news release, including words such as "expects", "projects", "plans", "anticipates", will and similar expressions, are forward-looking information that represents management of Tyler's internal projections, expectations or beliefs concerning, among other things, future operating results and various components thereof or the economic performance of Tyler. The projections, estimates and beliefs contained in such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Tyler's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, those described in Tyler's filings with the Canadian securities authorities. Accordingly, holders of Tyler shares and potential investors are cautioned that events or circumstances could cause results to differ materially from those predicted. Tyler disclaims any responsibility to update these forward-looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Tyler Resources Inc.
    Corporate Contacts
    Jean Pierre Jutras, President/CEO/Director
    (403) 269-6753 or Toll Free: 1-888-237-7898
    (403) 266-2606 (FAX)
    Website: www.tylerresources.com
    Longview Communications Inc.
    Media Contacts
    Alan Bayless
    (604) 694-6035
    David Ryan
    (604) 694-6031
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