Mr. Thomas Yingling reports
PENNANT ANNOUNCES $2,000,000 BROKERED FINANCING
Pennant Energy Inc. has entered into an agreement with Secutor CapitalManagement Corp. and Industrial Alliance Securities, in connection with aprivate-placement financing of up to 2,777,777 units at a price of 18cents per unit and 6,818,181 flow-through units at a price of 22 centsper flow-through unit, for gross proceeds of up to $2-million.
The offering is being made by the agents on a commercially reasonableefforts basis and is expected to close later this month. The offering issubject to certain conditions including, but not limited to, thereceipt of all necessary regulatory approvals. All securities to beissued under the offering will be subject to a four-month statutory holdperiod in Canada. The company has granted the agents an option,exercisable in whole or in part, at any time until the date that is 30days following the closing date, to purchase up to that number offlow-through units or units or a combination thereof that does notexceed 25 per cent of the total number of flow-through units and unitssold pursuant to the offering, as the case may be, to coveroverallotments, if any.
Each unit consists of one common share of the company and onecommon-share purchase warrant. Each flow-through unit consists of onecommon share of the company to be issued as a flow-through share withinthe meaning of the Income Tax Act (Canada) and one-half of onecommon-share purchase warrant.
Each warrant will be exercisable by the holder thereof to acquire onecommon share of the company at a price of 35 cents for a period of 12months after the closing.The company will pay the agents a total cash commission equal to 8 percent of the gross proceeds raised in respect of the offering and issueto the agents a total number of compensation options to acquire thatnumber of common shares that is equal to 8 per cent of the total numberof units and flow-through units sold, exercisable at a price of 18 centsper share for a period of 12 months following the date of closing ofthe offering.
The gross proceeds raised from the issuance of the flow-through unitswill be used by the company for exploration on the Bigstone projectlocated northwest of Edmonton, Alta., in accordance with the provisionsof the company's earn-in agreement with Donnybrook Energy Inc. The netproceeds from the issuance of the units will be used for workingcapital purposes.