TYLER RESOURCES INC.
TSX VENTURE : TYS

TYLER RESOURCES INC.

November 23, 2007 08:39 ET

Tyler Resources Board Files Directors' Circular, Recommends Shareholders Reject Mercator Minerals' Hostile Takeover Bid

CALGARY, ALBERTA--(Marketwire - Nov. 23, 2007) - Tyler Resources Inc. (TSX VENTURE:TYS) ("Tyler" or the "Company") announced today that the Tyler Board of Directors has filed a Directors' Circular with Canadian securities regulators recommending that Tyler Shareholders REJECT an unsolicited takeover bid from Mercator Minerals Ltd. ("Mercator") and NOT tender their shares to the Mercator Offer.

On November 9th, 2007, 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 Shares on the Toronto Stock Exchange on November 22nd, 2007, the Mercator Offer is equivalent to $0.9888 per Tyler common share. The Mercator Offer will expire on December 17th, 2007, unless withdrawn or extended.

Reasons for the Recommendation

The Tyler Board, based on the advice and recommendations from a Special Committee of independent directors as well as its financial and legal advisors, unanimously recommends that Tyler Shareholders reject the Mercator Offer. The Board cited a number of reasons in the Directors' Circular for doing so, including that:

- The Mercator Offer significantly undervalues Tyler, including Tyler's Bahuerachi deposit, and fails to adequately compensate Tyler's Shareholders for the loss of opportunity to participate in Tyler's future growth;

- Alternative transactions are being aggressively pursued by Tyler which have the potential to generate greater value for Tyler Shareholders;

- The timing of the Mercator Offer is highly opportunistic and disadvantageous to Tyler Shareholders because, if successful, it will deprive them of the potential for enhancement of the value of their Tyler Shares;

- The Mercator Offer represents a discount to the current trading price of the Tyler Shares;

- Tyler Shareholders will experience substantial dilution;

- The share consideration offered by Mercator is volatile and of uncertain value; and

- The purported benefits suggested by Mercator as flowing to Tyler Shareholders will not offset the dilution that will be experienced by Tyler Shareholders and are not unique to a combination with Mercator.

Tyler Shareholders should also note that the terms of the Mercator Offer are 27% lower than an offer Mercator made to Tyler on October 5th, 2007, which contemplated an exchange ratio of 0.1437 Mercator Shares for each Tyler Share, and which Tyler viewed as inadequate and allowed to expire on October 10th, 2007.

A complete and more detailed explanation of all of the reasons for the unanimous recommendation of the Board is provided in the Directors' Circular.

Company Statements

Alan Craven, Chairman of the Board and of the Special Committee, said, "We believe the Mercator Offer is financially inadequate and fails to compensate Tyler Shareholders for the future value of the Bahuerachi deposit as the project moves towards feasibility, development and production."

"Mercator is asking Tyler Shareholders to trade a 100% interest in an emerging world-class asset for a 14.6% fully diluted interest in a combined company with a number of significant operational and financial risks, none of which are currently associated with the advancement of Tyler's business plan. Moreover, Tyler Shareholders face the potential for even greater dilution should Mercator need to raise additional capital to fund the development of Bahuerachi or to maintain its existing operations, an eventuality we believe is likely," said Craven.

Jean-Pierre Jutras, Director, President and CEO of Tyler said, "In our view, in addition to offering inadequate value for Tyler, Mercator has failed to identify and quantify any meaningful synergies in the proposed combination. Mercator proposes to use Tyler's own cash to fund the advancement of Bahuerachi, but on a timeline that is slower than what Tyler has already established to take the project through feasibility. Taken as a whole, this Company does not see how the Mercator Offer serves the best interests of Tyler Shareholders."

Outlook

In addition to the Cerro Prieto Discovery drilling results released on November 14th, 2007, which include 12.6 metres grading 8.4% zinc in a new near surface discovery, Tyler anticipates a number of significant developments over the next several months that should result in a substantial value enhancement for the Company, including:

- Completion of an updated resource estimate for the Bahuerachi deposit in January 2008; and,

- Completion of a pre-feasibility study, based on the updated resource estimate, in the first half of 2008.

If the Mercator Offer is successful, Tyler Shareholders will be denied the opportunity to properly benefit from these events as well as Tyler's long-term development plans for Bahuerachi. There remains very significant exploration potential on the Bahuerachi property, including the potential to discover and delineate additional zones of mineralization as add-ons or as entirely new mineral deposits on site, for which no value is being assigned by the Mercator Offer.

Exploration of Strategic Alternatives to Maximize Shareholder Value

The Board of Directors and the Special Committee, together with Tyler's management, financial advisors and legal advisors, are working to pursue alternative transactions that may enhance Tyler Shareholder value. Tyler has been solicited by, and has initiated contact with, a number of third parties who have expressed an interest in considering alternative transactions. Tyler has established an electronic data room for the purpose of providing confidential information to third parties. Before gaining access to the data room, each third party has been required to enter into a confidentiality and standstill agreement with Tyler.

Discussions are ongoing with third parties in order to generate value-enhancing alternatives. While it is impossible to predict whether any transactions will emerge from these efforts, the Board of Directors believes that Tyler and its assets are potentially very attractive to other parties in addition to Mercator.

Tendering Tyler Shares to the Mercator Offer before the Board of Directors and its advisors have had an opportunity to fully explore all available alternatives may preclude the possibility of a financially superior transaction emerging.

Availability of the Directors' Circular

Shareholders are urged to read the Directors' Circular in its entirety, a copy of which is available on Tyler's web site at www.tylerresources.com and on SEDAR at www.sedar.com. Copies of the Directors' Circular are also being mailed to all Tyler Shareholders.

How to Withdraw Shares from the Mercator Offer

Shareholders who have already tendered their shares to the Mercator offer and wish to withdraw them, may do so by contacting Kingsdale Shareholder Services Inc., the information agent retained by Tyler, toll free at 1-866-639-3460. Shareholders may also contact Kingsdale Shareholder with any questions they have regarding the Mercator Offer and/or Tyler's recommendation.

About Tyler Resources

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.

Note Regarding Forward-Looking Statements

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

  • Corporate Contacts
    Tyler Resources Inc.
    Jean Pierre Jutras, President/CEO/Director
    (403) 269-6753 or Toll Free: 1-888-237-7898
    (403) 266-2606 (FAX)
    Website: www.tylerresources.com
    or
    Media Contacts
    Longview Communications Inc.
    Alan Bayless
    (604) 694-6035
    or
    Longview Communications Inc.
    David Ryan
    (604) 694-6031
    or
    Shareholder Information
    Kingsdale Shareholder Services Inc.
    Toll Free: 1-866-639-3460