Iron Bridge Resources Inc. (TSX: IBR) today responded to a campaign of misinformation recently presented by Velvet Energy Ltd, intended to mislead Iron Bridge shareholders about the value of their investment and the substantial upside potential of their company.

Additionally, the company’s Board of Directors reiterated its prior unanimous recommendation, based upon the recommendation of its independent special committee, that IBR shareholders REJECT the unsolicited offer from Velvet Energy to acquire all of the issued and outstanding common shares of IBR at a price of $0.75 per share in cash.

Velvet is seeking to acquire Iron Bridge’s oil-rich Gold Creek Montney asset at a substantial 85% discount to its resource value potential.  This would deny Iron Bridge shareholders exposure to tremendous growth upside and price improvement in the commodity sector.  Recent comparable Montney land transactions imply a value of approximately $3,500 per acre, almost three times the $1,300 per acre land value implied by Velvet’s offer for Iron Bridge’s 49,600 net acre position.  Further, Velvet’s Offer does not reflect any value for the substantial synergies Velvet would realize by controlling Iron Bridge’s lands, without which it faces major impediments to its own development plans.

Rob Colcleugh, Chief Executive Officer, said, “Having spoken to a large number of our shareholders, I am confident that the current Velvet Offer will be rejected.  Yet, Velvet has made no attempt to contact Iron Bridge to propose an offer that might be more acceptable to our shareholders.  Instead, they try to intimidate shareholders into tendering to the offer with unscrupulous tactics, including using data they know to be incomplete and unrepresentative of the resource quality or its potential.  This is a continued pattern of questionable behavior by Velvet and its management team.  We are dismayed that the Canadian Pension Plan Investment Board and Warburg Pincus would support these types of actions from Velvet’s leadership.

“From the beginning, Velvet has based its campaign on deceptive claims and baseless attacks.  Whether misrepresenting the meagre premium it is offering, the quality of Iron Bridge’s premium assets, the Company’s long-term prospects or the likelihood of superior alternatives emerging, Velvet cannot be trusted and its offer is clearly not in the best interest of Iron Bridge shareholders.”

Velvet’s most recent attacks, citing cherry-picked figures from public datasets to raise doubts about the quality of Iron Bridge’s Gold Creek Montney land holdings, are misleading and self-serving.  In May 2018 the company disclosed initial, enhanced production rates from two of its Gold Creek wells, and has continued a deliberate process of well testing and evaluation.  Production has been constrained by water disposal until an additional, third disposal well enters service which is expected shortly.  While under this constraint, the company fitted the 100/8-21 and 102/8-21 wells with downhole chokes in order to capture data on the impact of production pressure on gas-oil-ratios and water-cuts.  Though this resulted in lower production volumes over the time period in question, it has provided important data with regard to maximizing resource recovery.  With additional water disposal, the Company will now be able to increase flow rates and draw down pressures which is expected to facilitate the clean-up of these wells.  The company intends to provide a full update on its progress at Gold Creek with its second quarter results release, scheduled for August 14, 2018.

Contrary to Velvet’s repeated uninformed claims and misrepresentations, Iron Bridge has continued pursuing its plan to generate substantial long-term value for its shareholders.  IBR is currently engaged in discussions with multiple potential “white-knight” parties that may result in a superior proposal to the Velvet offer, some of which would also allow Iron Bridge’s shareholders to retain the ability to participate in the significant development upside of the asset.  In addition, the company has proposals from a number of potential strategic capital partners that would allow it to drive development plans forward on its own.  These financial parties are supportive of our efforts to examine alternative proposals prior to engaging financing alternatives.  The company is committed to providing an alternative that maximizes value for all of its shareholders.

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