Ms. Pamela Strand reports
SHEAR MINERALS LTD. ANNOUNCES PRICING AND TERMS FOR ITS PRIVATE PLACEMENT OFFERING
Shear Minerals Ltd. has agreed upon the terms and pricing for its marketed private placement previously announced in Stockwatch on July 23, 2010. Under the offering, Shear Minerals has agreed to issue up to $15-million of securities consists of conventional units, each consisting of: (i) one common share and one common share purchase warrant at a price of 6.5 cents per conventional unit; and (ii) flow-through unit, each consisting of one flow-through common share and one-half of one common share purchase warrants at a price of 6.5 cents per flow-through unit. The agents for the offering include RBC Capital Markets, as lead agent, and Macquarie Capital Canada Ltd.
Each conventional unit warrant entitles the holder thereof to acquire one additional common share at a price of 7.5 cents for a period of 48 months following the date of issuance. Each flow-through unit warrant entitles the holder thereof to acquire one additional common share at a price of eight cents for a period of 24 months following the date of issuance. The agents may increase the size of the offering of conventional units by up to 15 per cent up to 48 hours prior to closing. Closing of the offering is expected to be on or about Aug. 27, 2010.
On July 19, 2010, Shear Minerals announced in Stockwatch it had entered into a definitive agreement with Tahera Diamond Corp. and Benachee Resources Inc. to acquire a 100-per-cent interest in the Jericho diamond mine, related processing facilities and all supporting exploration assets, located in the Kitikmeot region of Nunavut. On July 27, 2010, the Ontario Superior Court gave its approval of the Jericho acquisition. The net proceeds received by Shear Minerals from the offering of conventional units will be used to finance the Jericho acquisition, exploration and development activities and general corporate purposes. The gross proceeds of the flow-through-unit share offering will be used by Shear Minerals to incur Canadian exploration expenses prior to Dec. 31, 2011. Shear Minerals is expected to renounce the qualifying expenditures to subscribers of the flow-through unit shares, with an effective date not later than Dec. 31, 2010. The offering is subject to certain conditions including, but not limited to, successful concurrent completion of the Jericho acquisition and the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange of the Jericho acquisition and the offering. Additional information can be found at the company's website.
In accordance with applicable securities laws, there will be a four-month hold on the securities comprising the conventional units and the flow-through units. As a result of the expected significant increase in its issued and outstanding share capital which will result from the concurrent completion of the Jericho acquisition and the offering, it is intended that at the next annual meeting of its shareholders Shear Minerals will propose a consolidation of its then issued and outstanding shares. While the specific consolidation ratio to be proposed will be determined in due course, the ratio is not expected to exceed 1:10.