Can someone pls explain this to me? How/why does a stock to such a discount from a financing like this (effectively 8 cents CAD)...
Mr. Babin apparently knows the mine quite well since he sold it to LSA in 2010.
Is LSA a gem or a dud in the making?
GL all.
LSD11
2014-10-15 17:49 ET - News Release
Mr. Robert Anderson reports
LACHLAN STAR ANNOUNCES PRIVATE PLACEMENT FOR PROCEEDS OF US$1.14 MILLION AND APPOINTMENT OF NEW CHAIRMAN
Lachlan Star Ltd. has agreed on a non-brokered private placement to Hamilton Place Associates LLC of 16,403,486 fully paid ordinary shares at an issue price of 6.97 U.S. cents per ordinary share for proceeds of $1.14-million (U.S.). The issue is within the company's existing share issue capacity without shareholder approval. No fees are payable in connection with the issue. The company has received the subscription funds and is proceeding to issue the shares to Hamilton within the next few days.
Hamilton has also agreed to a prepaid gold loan working capital facility of at least $4-million (U.S.) to the company's subsidiary, Compania Minera Dayton, with such working capital advance and associated terms and conditions to be finalized no later than Dec. 31, 2014. The facility is dependent upon Lachlan Star having $4-million (U.S.) in cash and cash equivalents at Nov. 30, 2014, and Hamilton's representatives having made a site visit to the CMD gold mine by that date.
Upon completion of this placement Peter Babin, a manager of Hamilton, will be appointed non-executive chairman of Lachlan Star, effectively immediately. Mr. Babin was one of the vendors of the CMD gold mine to Lachlan Star in December, 2010, and was a director of the company from that date until November, 2013.
Upon the appointment of Mr. Babin, Scott Perry will stand down from the board of Lachlan Star to focus exclusively on his role as chief executive officer of AuRico Gold. The company thanks him for his efforts over the last three years.
Upon completion of the placement, Hamilton will acquire 9.9 per cent of the outstanding shares of the company, and Mr. Babin, together with his associates, will control, directly or indirectly, approximately 12.36 per cent of the outstanding shares of the company.
We seek Safe Harbor.