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PMI Gold Corporation (TSX.V:PMV) ("PMI Gold" or "the Company") is
pleased to announce the completion of its previously announced special
warrant financing. Pursuant to an underwriting agreement with Cormark Securities Inc. (as lead underwriter) ("Cormark"), Haywood Securities Inc., Salman Partners Inc. and M Partners Inc. (collectively,
the "Underwriters"), the Company today issued, on a private
placement basis, 10,715,000 special warrants (the "Special
Warrants") at a price of C$0.70 per Special
Warrant to raise gross proceeds of C$7,500,500
(the "Private Placement").
The gross proceeds of the Private
Placement have been placed in escrow with Computershare Trust Company of Canada ("Computershare") pursuant to the
terms and conditions of a special warrant indenture dated November 29, 2010 among the Company, Cormark and Computershare (the "Special Warrant
Indenture"), which provides, among other conditions, that the proceeds
will be released to the Company upon the Company's confirmation that its
concurrent Australian public offering has been completed to raise gross
proceeds of at least $27,500,000 (Australian
dollars) (the "Release Conditions"). If the Release Conditions have
not occurred by December 20, 2010, the proceeds
of the Private Placement will be returned to the holders of the Special
Warrants and the Special Warrants shall be automatically cancelled.
Accordingly, Special Warrants may not be converted for common shares of the
Company until the Release Conditions have been satisfied.
A copy of the Special Warrant Indenture
will be filed under the Company's profile on the SEDAR website at http://www.sedar.com.
Upon the Release Conditions being
satisfied, the Underwriters will be paid a commission in an amount equal to
6% of the gross proceeds of the Private Placement. The Underwriters will also
be reimbursed for reasonable out-of-pocket expenses in connection with the
Private Placement. Upon the release of the proceeds, JNS Capital Corp., an
arm's length financial advisory consultant of the Company, will be paid a fee
in the amount of C$225,015, representing 3% of
the proceeds of the Private Placement, for services rendered in connection
with the Private Placement.
As previously announced, the Company is
required to use its commercially reasonable best efforts to file a short form
prospectus in applicable Canadian jurisdictions and obtain a final receipt
therefore by December 22, 2010 (the date such
receipt is issued being referred to as the "Qualification Date"),
to qualify the distribution in Canada of the
common shares underlying the Special Warrants. If a final receipt is not
obtained on or before December 22, 2010, each
Special Warrant will thereafter be convertible into 1.1 common shares of the
Company (in lieu of one common share). Provided the Release Conditions have
been satisfied, the Special Warrants will be automatically converted into
common shares of the Company on the date that is the earlier
of (i) three business days after the Qualification
Date, and (ii) March 30, 2011.
The Special Warrants issued under the
Private Placement, and the securities issuable on conversion thereof, are
subject to a hold period under applicable Canadian securities laws and the
policies of the TSX Venture Exchange, expiring March 30,
2011.
In addition, the full amount of the
AUD$27.5 million Australian initial public offering has been receipted in
trust with Computershare (Australia), subject
to final approvals of the Australian Securities Exchange. Funds raised pursuant to the Australian offering and the
Canadian Private Placement will be used primarily to accelerate the progress
of drilling and feasibility studies at the Company's Obotan
and Kubi gold projects in Ghana
and to fast-track regional gold exploration.
On behalf of the Board,
"Douglas R. MacQuarrie"
President & CEO
This news release contains
forward-looking statements which involve known and unknown risks, delays and
uncertainties not under the Company's control which may cause actual results,
performance or achievements of the Company to be materially different from
the results, performance or expectations implied by these forward-looking
statements. We Seek Safe Harbour.
About PMI Gold
Mining analysts have recently stated
that West Africa will soon become the World's
second largest gold producing region after China,
with Ghana by far the largest gold producer in
West Africa. PMI Gold controls four previous
operating mines on 85 kilometres of Ghana's major gold belts all located near the centre
of near 200 million ounces of historical gold production and current
resources. Our Kubi Gold Project (NI43-101 mineral
resource estimate of 604,000 ounces @3.66 g/t gold Indicated; 315,000 ounces
@1.88 g/t gold Inferred, see SEDAR) adjoins the 60 million ounce AngloGold
Ashanti Obuasi mine, the largest underground mine
in West Africa with a 113 year, continuous
mining history. At Obotan, where previous mining
yielded 730,000 ounces of gold at a grade of 2.2 g/t, we recently announced a
maiden +1 million ounce gold mineral resource estimate, and the commencement
of an aggressive drilling campaign.
Neither the 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.
For further information:
Douglas MacQuarrie, President & CEO
Telephone: +1(604)682-8089 Toll-Free: +1(888)682-8089
Facsimile: +1(604)682-8094
or for European Investors: Florian Riedl-Riedenstein: Tel:
+43-2774-28814, e-mail: frram@aon.at
Or visit the PMI Gold Corporation website at
http://www.pmigoldcorp.com
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