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Brownstone Energy Inc. (TSXV: BWN) is pleased to announce the closing
today of its previously announced underwritten private placement (the
"Offering") of units. The company raised gross proceeds of
$28,750,000 through the sale of 30,263,158 units (which include the units
sold pursuant to the exercise in full of the underwriters’ over-allotment
option), at a price of $0.95 per unit. Each unit was comprised of one common
share and one-half of one common share purchase warrant of the company. Each
whole warrant entitles the holder to acquire one common share of Brownstone
at a price of $1.25 per share, until expiry on September 11, 2012, subject to
accelerated expiry, at the company’s option, if, at any time following
July 11, 2011, the closing price of Brownstone’s common shares on the
TSX Venture Exchange is at least $1.75 over a period of 20 consecutive
trading days.
The
Offering was conducted through a syndicate of underwriters led by Jennings
Capital Inc. and Dundee Securities Ltd. as co-lead underwriters, and
including Clarus Securities Inc., Fraser Mackenzie
Limited, PI Financial Corp. and All Group Financial Services Inc. As
consideration for their services, the company paid to the underwriters a cash
commission equal to 6% of the gross proceeds raised under the Offering and
issued to them an aggregate of 1,815,789 broker warrants (equal to 6% of the
total number of units sold under the Offering), each broker warrant entitling
the holder to acquire one common share of the company, on the same terms and
subject to the same conditions as the warrants comprising the units.
PowerOne Capital Markets Limited, which acted
as financial advisor to the company in connection with the Offering, received
a cash commission equal to 1% of the gross proceeds raised under the Offering
and an aggregate of 302,632 broker warrants.
All
of the securities issued in connection with the Offering (including common
shares underlying the warrants and broker warrants) are subject to a hold
period expiring on July 12, 2011.
The
net proceeds of the Offering will be used to fund the company’s
exploration and development programs in Colombia and off-shore Israel, to
repay outstanding indebtedness and for working capital and general corporate
purposes.
Insiders
of Brownstone purchased an aggregate of 1,694,000 units under the Offering,
representing approximately 5.6% of the total number of units sold. A
material change report in respect of the Offering will be filed on SEDAR in
accordance with applicable securities law requirements. The report could not
be filed at least 21 days prior to closing as material information concerning
the Offering was not then known by the company.
The Offering is subject to final
acceptance by the TSX Venture Exchange.
About Brownstone
Brownstone
Energy Inc. is a Canadian-based, energy focused investment company with
direct interests in oil and gas exploration projects, including varying
interests in 5 off-shore Israel concessions and varying interests in 4
Colombian blocks in the Llanos basin, as well as other oil and gas interests
worldwide. By owning and managing a diversified portfolio of energy-based
projects, Brownstone provides shareholders with a unique energy alternative.
For additional information, please see Brownstone's website: www.brownstoneenergy.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined
in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy
or accuracy of this release.
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