Premier Announces Closing of Non-Brokered Convertible Debenture Private Placement for $11.5 Million by its Subsidiary Premier Royalty Corporation
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THUNDER BAY, ON, July 10, 2012 /CNW/ - PREMIER GOLD MINES LIMITED (PG:TSX)
(“Premier Gold” or the “Company”) is pleased to announce the closing of
a private placement (the “Private Placement”) by its wholly-owned
subsidiary, Premier Royalty Corporation (“Premier Royalty”), of an
aggregate $11,500,000.00 principal amount of convertible debentures of
Premier Royalty, which accrue interest at a rate of 8% per annum (the
“Convertible Debentures”). The Convertible Debentures mature on May 31,
2013 unless, among other things, they are automatically converted as a
result of the occurrence of a going public transaction by Premier
Royalty, including the closing of the previously announced business
combination transaction (the “Bridgeport Transaction”) involving Premier
Royalty and Bridgeport Ventures Inc. (“Bridgeport”). Upon completion of
the Bridgeport Transaction the principal amount outstanding under the
Convertible Debentures together with all accrued interest thereon will
be converted into units of Bridgeport at a conversion price of $0.35 per
unit (on a pre-consolidated basis), with each unit consisting of one
common share of Bridgeport and 0.375 of a Bridgeport warrant (on a
pre-consolidated basis). Each whole warrant (a “Bridgeport Warrant”)
will be exercisable at a price of $0.50 (each on a pre-consolidated
basis) for a period commencing on the date that is six months following
the completion of the Bridgeport Transaction and ending on the date that
is four years following completion of the Bridgeport Transaction,
subject to early expiry upon the occurrence of certain events.
The debenture also provides that in the event of a going public
transaction for Premier Royalty other than the Bridgeport Transaction
prior to the maturity date of the Convertible Debentures, the whole of
the principal amount outstanding under each debenture together with all
accrued interest thereon will be converted into common shares of the
resulting entity at a conversion price equal to 90% of the price per
share that Premier Royalty or its securityholders receive on the
creation, issuance and/or sale of such shares pursuant to such going
public transaction, as applicable, subject to the provisions of the
Convertible Debentures.
The proceeds of the Private Placement will be used for royalty acquisitions and working capital.
Abraham Drost, Chairman of Premier Royalty Corporation stated that “we
are gratified with the healthy demand and relatively rapid completion of
this financing into Premier Royalty Corporation out of the box and in a
tough market. It speaks to the quality of our precious metal royalty
asset base and a growing recognition that Premier Royalty Corporation
will become a significant new player on the royalty landscape.”
About Premier Gold Mines Limited and Premier Royalty Corporation
Premier Royalty Corporation is a wholly-owned subsidiary of Premier Gold
Mines Limited, one of North America’s leading exploration and
development companies with a high-quality pipeline of projects focused
in proven, safe and accessible mining jurisdictions in Canada and the
United States. Premier’s portfolio includes significant assets in world
class gold mining districts such as Red Lake, Musselwhite and Geraldton
in Ontario and the Carlin Trend in Nevada. Premier believes that
consolidating existing royalties owned by Premier Gold combined with
acquisition of other high quality cash flowing royalty assets into
Premier Royalty can form the basis of a transaction that is value
accretive to Premier shareholders.
FOR FURTHER INFORMATION PLEASE CONTACT:
Ewan Downie, President & CEO
Premier Gold Mines Limited
Abraham Drost, P.Geo., Chairman
Premier Royalty Corporation
Phone: 807-346-1390
Fax: 807-346-0100
e-mail: info@premiergoldmines.com
Web Site: www.premiergoldmines.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This
news release includes certain information that may constitute
“forward-looking information” under applicable Canadian securities
legislation. Forward-looking information includes, but is not limited
to, statements about strategic plans, including a going public
transaction involving Premier Royalty and the completion of the
Bridgeport Transaction. Forward-looking information is necessarily based
upon a number of estimates and assumptions that, while considered
reasonable, are subject to known and unknown risks, uncertainties, and
other factors which may cause the actual results and future events to
differ materially from those expressed or implied by such
forward-looking information, including the risks identified in Premier
Gold’s annual information form under the heading “Risk Factors”. There
can be no assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not place
undue reliance on forward-looking information. All forward-looking
information contained in this press release is given as of the date
hereof and is based upon the opinions and estimates of management and
information available to management as at the date hereof. The Company
disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new information,
future events or otherwise, except as required by law.