Mr. Marc Cernovitch reports
HALO ANNOUNCES FINANCINGS TO RAISE UP TO $4.5 MILLION
Halo Resources Ltd. has arranged for financings to raise up to an aggregate of $4.5-million.
Private placement by HudBay Minerals
Halo has entered into a subscription agreement for a non-brokered, private placement to raise $1,827,500 through the sale of 3,655,000 units to HudBay Minerals at a price of 50 cents per unit. Each unit comprises one common share and one-half of one non-transferable common share purchase warrant. Each whole warrant entitles HudBay to purchase one common share of the company at an exercise price of 60 cents for a period of 24 months from the date of issuance. Completion of the financing is conditional on the company raising not less than an additional $2.2-million in the financings described below as well as other customary closing conditions. Upon completion of the HudBay private placement, HudBay will hold up to 14.5 per cent of the issued and outstanding shares of Halo on a non-diluted basis and up to 19.9 per cent, assuming full exercise of the warrants by HudBay.
Marc Cernovitch, chairman of Halo, comments, "We believe HudBay's investment in Halo is an endorsement of the Sherridon district and its potential to join Snow Lake and Flin Flon as part of the region's metal production pipeline and recognizes the value of Halo and the quality and potential of its mineral properties."
Pursuant to the subscription agreement, HudBay shall, at its option, be entitled to maintain its proportionate equity interest in Halo through a right to participate in any subsequent issuances of equity or securities convertible into equity.
An option agreement announced Dec. 21, 2009, allows HudBay to earn up to a 67.5-per-cent joint venture interest in a 1.1-square-kilometre area of the 200-square-kilometre Sherridon VMS property in Manitoba which hosts the Cold and Lost mineralization. Results from the recent 13-hole drill program completed at the Lost deposit are described in Halo's Dec. 1, 2010, news release in Stockwatch news.
The company's primary use of the proceeds from this financing will be to finance exploration on the Sherridon property.
Brokered private placement
Halo has entered into an engagement letter with Loewen, Ondaatje, McCutcheon Ltd. pursuant to which LOM, along with D&D Securities Inc. will assist Halo on a marketed private placement basis in raising a total of $2-million through the issuance of units of Halo to subscribers resident in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia and certain offshore jurisdictions. The units will have the same terms and conditions as the units subscribed for by HudBay, as described above.
Halo will pay the agents a cash commission of 7 per cent of the funds raised through the brokered private placement. In addition, Halo will issue to the agents non-transferable warrants to acquire units in the amount that is equal to 10 per cent of the number of units sold for a period of 24 months from the date of issuance. Each of the agents' compensation warrants will entitle the holder to acquire one unit of Halo having the same terms and conditions as the units sold under the brokered private placement. The company may increase the size of the brokered private placement by up to 20 per cent.
Non-brokered private placement
Halo has also arranged a non-brokered private placement to raise up to $672,500 through the sale of up to 1,345,000 units to subscribers resident in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario, and certain offshore jurisdictions having the same terms and conditions as the units sold to HudBay and under the brokered private placement. Halo may pay a finder's fee to arm's length parties in an amount to be determined.
All of the units issued under the HudBay private placement, brokered private placement and non-brokered private placement will be subject to a four-month hold period. The HudBay private placement, brokered private placement and non-brokered private placement are subject to acceptance by the TSX Venture Exchange. The proceeds of this financing and the brokered private placement will be used for mineral exploration and general working capital purposes