FOREST GATEForest Gate arranges $1.75-million financing
2008-05-01 10:31 ET - News Release
Mr. Robert Kramberger reports
FOREST GATE ANNOUNCES BOUGHT DEAL - AMENDS PREVIOUSLY ANNOUNCED PRIVATE PLACEMENT
Forest Gate Resources Inc. has entered into an amended brokered private placement agreement with Northern Securities Inc., whereby Northern Securities will act as lead underwriter in a private placement of $1-million in flow-through units and $750,000 in units, with a bought-deal commitment provided by Northern Financial Corp. The revised terms of this private placement replace the terms of the brokered private placement previously announced on April 11, 2008, and reported in Stockwatch.
Under the revised terms, each flow-through unit, priced at 10 cents per flow-through unit, will comprise one common share and one-half of a common share purchase warrant. Each such whole warrant will be exercisable into one common share for a period of two years from closing at an exercise price of 13 cents per share.
Each unit, priced at eight cents per unit, will comprise one common share and one common share purchase warrant. Each such warrant will be exercisable into one common share for a period of two years from closing at an exercise price of 11 cents per share.
The flow-through units and units will be issued pursuant to applicable prospectus and registration exemptions, and will be subject to a four-month hold period.
The company will grant Northern Securities an overallotment option, exercisable until closing, to purchase up to an additional 20 per cent of the number of units and flow-through units issued on closing, at a price equal to the unit issue price and flow-through unit issue price, respectively.
The company will also pay Northern Securities 8 per cent of the total gross proceeds of the offering, payable at closing. In addition, the company will pay Northern Securities a work fee of $20,000 and issue to Northern broker warrants equal to 10 per cent of the number of units and flow-through units sold pursuant to the offering. Each broker warrant will be exercisable into one unit at the issue price at any time prior to the date that is 24 months from closing.
It is anticipated that the financing will be completed on or before the close of business on May 31, 2008. This financing is subject to the usual regulatory approvals.
The company intends to use the proceeds from the private placement for general working capital purposes and its continuing projects in Canada.
We seek Safe Harbor.