Over Seas Lithium InterestEtna signs LOI for potential $5-million POSCO financing
2010-01-13 09:30 ET - News Release
Mr. Andrew Brodkey reports
ETNA RESOURCES INC. (TO BE RENAMED PAN AMERICAN LITHIUM CORP.) ANNOUNCES LETTER OF INTENT WITH POSCO FOR POTENTIAL PRIVATE PLACEMENT
Etna Resources Inc. has entered into a non-binding letter of Intent (LOI) with POSCO, whereby an amount of up to $5-million may be invested by POSCO in Etna.
The LOI provides that POSCO will undertake and complete technical due diligence on Etna and Etna's projects within 30 days from Jan. 4, 2010, and complete all other due diligence and obtain management approvals for the investment within 60 days of the effective date.
Should POSCO determine to proceed, the parties will execute and deliver a subscription agreement for the investment, within 60 days of the effective date, on the following terms:
- POSCO will make an initial payment of $1-million on signing of the subscription agreement.
- POSCO will make the remaining payment of $4-million at closing of the subscription agreement.
- POSCO will receive Etna shares at a price of 50 cents per share, or such greater price if required by the policies of the TSX Venture Exchange.
- For each share purchased, POSCO will receive a one-half warrant to purchase Etna shares at a price of $1.00 per share for two years. The warrants will have a forced conversion feature whereby POSCO will be obligated to exercise the warrants if Etna shares trade at a price of $1.40 or above for 15 consecutive trading days
The securities issuable to POSCO on closing will include a hold period in accordance with applicable securities laws.
Conditions of closing
Closing of the investment is subject to certain conditions including: (a) completion of POSCO's satisfactory due diligence review of Etna and its projects; (b) receipt of all necessary regulatory and exchange approvals; and (c) receipt of all necessary internal, management and board approvals.
We seek Safe Harbor.