Brownstone Energy Inc. (TSXV: BWN)
(“Brownstone” or the “Company”) is pleased to
announce that it has finalized the terms of its previously announced private
placement and intends to enter into an agreement with Jennings Capital Inc.
and Dundee Securities Ltd., acting as co-lead underwriters on behalf of a
syndicate of underwriters which includes Clarus Securities Inc., Fraser
Mackenzie Ltd., PI Financial Corp. and All Group Financial Services Inc.
(collectively, the “Underwriters), to issue 26,315,790 units of the
Company (the “Units”) at a price of $0.95 per Unit for gross
proceeds of $25,000,000 (the “Offering”). Each Unit is
comprised of one common share of the Company (the "Common Shares")
and one-half of one common share purchase warrant (the "Warrants").
Each whole Warrant will entitle the holder to purchase one Common Share at a
price of $1.25 for a period of 18 months from the Closing Date of the
Offering (the “Warrant Term”). If, following the expiry of
the four-month hold period, the closing price of Brownstone’s common
shares exceeds $1.75 for 20 consecutive business days, then the Warrant Term
shall be automatically reduced and the Warrants will expire on the date that
is 30 days following the issuance of a press release announcing the reduced
Warrant Term.
The Company has also granted the
Underwriters an option (the “Over-Allotment Option”) to increase
the size of the Offering by up to an additional 3,947,368 Units, exercisable
in whole or in part at any time up to the Closing Date. If the
Over-Allotment Option is exercised in full, the aggregate gross proceeds
raised will be $28,750,000.
The Company intends to use the net
proceeds of the Offering to fund its exploration and development programs in
Colombia and off-shore Israel, for working capital and general corporate
purposes.
Closing of the Offering is anticipated
to occur on or about March 9, 2011 (the "Closing Date") and is
subject to certain customary conditions and regulatory approvals including
approval of the TSX Venture Exchange. The Common Shares will be subject
to a statutory hold or restricted period of four months following the Closing
Date. In connection with the Offering, the Company has agreed to pay to
the Underwriters a cash commission equal to 6.0% of the gross proceeds raised
and Warrants equal to 6.0% of the number of Units issued pursuant to the
Offering (including the exercise of the Over-Allotment Option).
PowerOne Capital Markets Limited is
acting as an advisor to Brownstone.
About Brownstone
Brownstone Energy Inc. is a
Canadian-based, energy focused investment company with equity interests and
direct interests in oil and gas exploration projects, including working
interests in almost 300,000 acres in the Piceance/Uinta Basins of Colorado
and Utah; 253,000 acres in Rio Negro, Argentina; interests in several
projects in Brazil; a 50% interest in approximately 300,000 hectares in the
Quėbec Lowlands; a 15% participating interest in several off-shore
Israel oil and gas blocks; and is earning interests (14-35%) in 4 Colombian
blocks in the Llanos basin. 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.
ON BEHALF OF THE BOARD
"Rudi Fronk"
President & C.E.O.
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