Mr. Randy Turner reports
SILVER QUEST INCREASES PREVIOUSLY ANNOUNCED FINANCING TO $12 MILLION
Silver Quest Resources Ltd. has increased the size of its previously announced financing from $10-million to $12-million. Under the revised terms of the private placement financing, a syndicate led by Paradigm Capital Inc., and including Stonecap Securities Inc. and Scotia Capital Inc., has undertaken on a best-efforts basis to raise gross proceeds of up to $10,000,200. The brokered offering will now consist of up to five million units at a price of $1.00 per unit and up to 4,348,000 common shares to be issued as flow-through shares for the purposes of the Income Tax Act (Canada) at a price of $1.15 per flow-through share. In addition, the company will complete a non-brokered private placement of units for gross proceeds of up to $2-million.
Each unit will consist of one common share of the company and one-half of one common share purchase warrant of the company. Each warrant will entitle the holder thereof to purchase one common share at $1.30 and will be exercisable for a period of 18 months after the closing date.
The units and flow-through shares are collectively referred to herein as the offered securities.
Upon closing, the agents shall receive a commission paid in cash equal to 6 per cent of the proceeds raised from the brokered offering. In addition, the agents shall receive compensation options entitling the agents, for a period of 18 months from the closing date, to acquire that number of common shares of the company that is equal to 6 per cent of the number of offered securities sold pursuant to the brokered offering. Each compensation option will be exercisable to purchase one common share of the company at a price of $1.15. The company will also pay a finder's fee to an arm's-length third party in respect of the non-brokered offering. Such finder's fee will comprise cash equal to 6 per cent of the proceeds raised from the non-brokered offering and compensation options equal to 6 per cent of the number of offered securities sold pursuant to the non-brokered offering.
The net proceeds from the private placements will be used by the company for exploration at its Davidson, Capoose, 3Ts and Yukon properties, and for general corporate purposes. The gross proceeds received by the company from the subscribers for the issuance of the flow-through shares will be used, pursuant to the provisions in the Income Tax Act (Canada), to incur Canadian exploration expenses, which will be renounced in favour of the subscribers for the taxation year ending Dec. 31, 2011.
Closing of the private placements is anticipated to occur on or before July 19, 2011, and is subject to the receipt of applicable regulatory approvals, including approval of the TSX Venture Exchange. The securities issued will be subject to a standard four-month hold period.