Posts Tagged Financings

UNDERWORLD RESOURCES COMPLETES $16 MILLION BROKERED PRIVATE PLACEMENT AND $0.55 MILLION NON-BROKERED PRIVATE PLACEMENT

Underworld Resources Inc. has closed a private placement with a syndicate of agents led by Canaccord Capital Corp. and including Axemen Resource Capital and Dundee Securities Corp., comprising a total of 10 million units at a price of $1.25 per unit and 2,415,000 flow-through units at a price of $1.45 per flow-through unit for total gross proceeds of $16,001,750.

Each unit consists of one common share and one-half of one transferable common share purchase warrant. Each whole unit warrant will entitle the holder to subscribe for one additional common share at a price of $1.60 for a period of one year from the date of closing. Each flow-through unit consists of one flow-through common share and one-half of one transferable common share purchase warrant. Each whole flow-through warrant will entitle the holder to subscribe for one additional common share at a price of $1.65 for a period of one year from the date of closing.

In the event that after four months and one day after the closing, the volume weighted average trading price of the company’s common shares on the TSX Venture Exchange for a period of 15 consecutive trading days exceeds $2, the company may, within five days after such an event, provide notice to the warrant holders of early expiry and thereafter, the unit warrants and the flow-through warrants will expire on the date which is 30 days after the date of the notice to the warrant holders.

The agents have been paid a cash fee equal to 6 per cent of the gross proceeds raised from the offering and have been granted agent’s warrants equal to 6 per cent of the number of units and flow-through units issued as part of the offering. Each agent’s warrant will be exercisable for one non-flow-through common share for a period of 12 months from closing at a price of $1.50.

One director of the company purchased 15,000 units in the offering and, as a result, securityholdings of insiders of the company have increased.

Kinross Gold Corp. subscribed for 1.2 million units of the offering. After giving effect to the offering and the exercise of the warrants, Kinross would hold 1.8 million common shares which, together with the 2,718,181 common shares held by Kinross prior to the offering, constitutes 11.1 per cent of Underworld’s outstanding common shares.

In addition to the brokered financing, Underworld has also completed the non-brokered financing, comprising a total of 400,000 units at a price of $1.25 per unit and 34,500 flow-through units at a price of $1.45 per flow-through unit for total gross proceeds of $550,025. One finder was paid finder’s fees of $30,000 and received finder’s warrants exercisable for 24,000 at a price of $1.50 per share for a period of 12 months from closing.

The company intends to use the funds raised from the issuance of the flow-through units for general exploration expenditures which will constitute Canadian exploration expenditures on the company’s prospects located in the Yukon Territory. The company intends to use the funds raised from the issuance of units for general working capital purposes.

All securities issued under the brokered and non-brokered private placements will be subject to a standard four-month hold period from the date of closing.

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