Not for Distribution to U.S. Newswire Services
or Dissemination in the United States
Selwyn Announces Equity Financing of Up to $15
Million for Scotia Mine Acquisition
Vancouver, BC, March 31, 2011 � Selwyn Resources Ltd. (TSX.V:
SWN) (�Selwyn�) today announced that it has entered into an agreement
with Paradigm Capital Inc. to act as lead agent on behalf of a syndicate
including Canaccord Genuity
Corp. (collectively, the �Agents�) to undertake a best efforts private
placement financing of up to 50,000,000 subscription receipts (the
�Subscription Receipts�) at a price of $0.30 to raise gross proceeds of
up to $15 million (the �Offering�). Selwyn has granted to the Agents an
option to sell up to an additional 15% of the Subscription Receipts for
additional gross proceeds of $2.5 million (the �Agents� Option�).
Each
Subscription Receipt will be convertible for no additional consideration
into one common share of Selwyn (a �Common Share�) and one-half of one
Common Share purchase warrant upon satisfaction of certain release
conditions (the �Release Conditions�). Each whole warrant will entitle
the holder thereof to purchase one Common Share at a price of $0.40 per
common share and will be exercisable for a period of 24 months after the
closing date of the Offering.
The
proceeds from the Offering will be used for the purchase consideration
payable by Selwyn in connection with the acquisition of ScoZinc Ltd. from Acadian Mining Corporation (see
February 8, 2011 news release) and for general working capital purposes
(the �Proposed Transaction�).
The Release Conditions include:
1.
all approvals for the Proposed
Transaction have been obtained;
2.
all conditions precedent to closing
of the Proposed Transaction have been satisfied, as defined in the Selwyn
and Acadian Mining Corporation binding Letter Agreement or final Share
Purchase Agreement as applicable; and
3.
Selwyn and Paradigm Capital Inc., on
behalf of the Agents, having delivered a joint notice to the Escrow Agent
confirming the Release Conditions have been satisfied and any other
regulatory approvals with respect to the issue of Common Shares and
Warrants upon conversion of the subscription receipts have been
satisfied.
On
the Closing Date, the gross proceeds from the Offering will be delivered
to and held by a licensed Canadian trust company or other escrow agent
until the Subscription Receipt deadline of May 31, 2011 or upon
satisfaction of the Release Conditions, whichever is earlier.
Selwyn
also intends to raise approximately $30 million in debt as part of the
funds to reopen the Scotia Mine.
About Selwyn Resources Ltd.
Selwyn�s
main focus remains the exploration and development of its properties that
make up the Selwyn Project in the Yukon, by the joint venture comprised
of Selwyn and Chihong Canada Mining Ltd. The
acquisition of the Scotia Mine will provide Selwyn with a new opportunity
for growing the Company, expanding its management team, and providing
cash flow to fund growth as it advances the Selwyn Project.
Forward-Looking Statements
This
press release contains forward-looking statements concerning the issue of
the Subscription Receipts and the acquisition of ScoZinc
Ltd. These forward-looking statements are based on assumptions and
judgments of management regarding the Subscription Receipts issue and the
acquisition that may prove to be inaccurate due to factors beyond
Selwyn�s control, including the satisfaction of conditions to the closing
of the acquisition and the Subscription Receipts issue. Although we have
attempted to identify important factors that could cause actual results
to differ materially from those contained in the forward-looking
statements, there may be other factors that cause results not to be as
anticipated or intended. There is no assurance that such information will
prove to be accurate, as future events could differ materially from those
anticipated in such information and accordingly, there is no assurance
that the acquisition of the ScoZinc Ltd. and
the completion of the Subscription Receipts issue will be completed as
anticipated. Readers should not place undue reliance on forward-looking
statements.
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For more information contact:
Dr. Harlan Meade, President and CEO
Catalin Chiloflischi,
Manager of Investor Communications
Telephone: +1 (604) 801-7240
Toll-free: +1 (888) 989-9188
Facsimile: +1 (604) 689-8355
Email: info@selwynresources.com
Website: www.selwynresources.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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