Should have *$%&#! seen it coming...Storm Cat arranges $23.1-million private placement
Storm Cat Energy Corp (C:SME)
Shares Issued 66,635,794
Last Close 9/18/2006 $1.56
Tuesday September 19 2006 - News Release
Mr. Scott Zimmerman reports
STORM CAT ENERGY CORPORATION ANNOUNCES C$23.1 MILLION PRIVATE PLACEMENT OF UNITS AND FLOW-THROUGH COMMON SHARES
Storm Cat Energy Corp. has entered into agreements in principal with a single investment group based in Ontario, pursuant to which this investment group will, acting as portfolio manager for fully managed accounts, purchase 7,594,937 units ($12-million) and 6,172,839 flow-through common shares ($11,111,110). Each unit, priced at $1.58 per unit, will comprise one common share and approximately 0.28 of a common share purchase warrant (2,126,582 warrants). Each whole common share purchase warrant will be exercisable into one common share at a price of $1.90 per share for a period of 18 months from closing. Each flow-through common share is priced at $1.80 per share. In connection with the offering, the company will pay a cash commission equal to 6 per cent of the total gross offering amount.
The completion of the offering is subject to the acceptance of the Toronto Stock Exchange and the American Stock Exchange.
The net proceeds from the sale of the units will be used to pay down mezzanine debt recently incurred to finance its previously announced acquisition in the Powder River basin and to finance the company's exploration and development program of the acquired properties in the Powder River basin, Wyoming, and for general corporate purposes. The net proceeds from the sale of flow-through common shares will be used to incur exploration and development expenses which qualify as Canadian exploration expenses (CEE) under the Income Tax Act.