Premier Gold Mines Limited. (“Premier”) (TSX:PG) announces that is has amended the previously announced financing by increasing the Underwriters overalottment option by 875,000 Subscription Receipts.
As per yesterdays announcement, Premier Gold Mines Limited has entered into an agreement with Westwind Partners Inc. as lead underwriter on behalf of a syndicate of underwriters (collectively, the “Underwriters”) to sell, on a bought deal private placement basis, 1,600,000 flow-through subscription receipts (“FT Receipts”) at a price of C$3.25 per FT Receipt and 2,000,000 subscription receipts (“Subscription Receipts”) at a price of C$2.50 per Subscription Receipt (the FT Receipts and Subscription Receipts collectively the “Securities”) in the capital of Premier Gold Mines Limited (the “Company”), for aggregate gross proceeds of approximately C$10,200,000. The securities issuable under the private placement are subject to a four month hold period from the closing date.
Each FT Receipt will be automatically exchanged, for no additional consideration, for one flow-through common share of the Company (“Flow-Through Share”) and each Subscription Receipt will be automatically exchanged, for no additional consideration, for one unit (a “Unit”) in the capital of the Company, immediately following execution by both parties of a formal Joint Venture Agreement (the “JV Agreement”) between the Company and Goldcorp Inc. (as outlined in the Company’s press release dated December 4, 2006). Notwithstanding the foregoing, if the JV Agreement is executed prior to the closing of the Offering (as hereinafter defined), the Company will issue Flow-Through Shares and Units rather than FT Receipts and Subscription Receipts and the terms hereof will be deemed to be amended accordingly.
The net proceeds of the offering will be held in escrow pending execution of the JV Agreement. If the JV Agreement is not signed by May 30, 2007, investors will have the option of receiving either the securities underlying their FT Receipts and Subscription Receipts or a refund of their subscription amounts.
Each Unit is comprised of one common share (“Common Share”) in the capital of the Company, and one half of one share purchase warrant (“Warrant”).
The Underwriters will have the option to sell up to an additional 2,875,000 Subscription Receipts or Units, as applicable, at a price of C$2.50 per Subscription Receipt or Unit (“Underwriters’ Option”), which option may be exercised at any time in whole or in part by the Lead Underwriter by notice in writing to the Company no later than 7:30pm (Toronto time) on the second business day prior to the Closing Date.
Goldcorp Inc. (TSX:G) has indicated that it will purchase up to 20% of the financing, as per their right pursuant to the terms of the Red Lake Joint Venture Agreement.
Premier plans to use the net proceeds for exploration and development of current projects, acquisitions and general corporate purposes. The gross proceeds from the sale of the Flow Through Shares will be used for general exploration expenditures, which will constitute Canadian exploration expenses (as defined in the Income Tax Act (Canada)) and will be renounced for the 2007 taxation year.
The Underwriters shall receive compensation comprised of cash and broker warrants upon closing of the offering.
The offering is scheduled to close on or about April 24, 2007 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX. The securities to be issued under this offering will be offered by way of private placement exemptions in all the provinces of Canada, offshore including in the United Kingdom pursuant to applicable exemptions and in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended.
The securities being offered have not, nor will they be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.
Premier Gold Mines Limited is a Canadian-based mineral exploration and development company with diverse property holdings that include several projects and deposits in Northwestern Ontario and a joint venture in Mexico. In the Red Lake gold mining camp, two of these are operated in joint venture with Goldcorp Inc. (TSX:G). A strategic project is also located on the main Musselwhite Gold Mine trend (Goldcorp-Kinross).
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