MEGA ANNOUNCES $9 MILLION PRIVATE PLACEMENT FINANCInteresting, announced two days after Premier Gold does a $30M bought deal.
Thunder Bay, Ontario October 14, 2011 Shares Issued: 76,721,980Mega Precious Metals Inc. (MGP:TSX-V) (“Mega”) is pleased to announce that it has entered into an agreement with Octagon Capital Corporation, as lead agent on behalf of a syndicate of agents including PowerOne Capital Markets Limited and Stonecap Securities Inc. (collectively, the “Agents”), in connection with a best efforts private placement offering of up to 3,773,600 units (“Units”) of Mega at a price of
.53 per Unit and up to 10,000,000 flow-through units (“Flow-Through Units”) of Mega at a price of
.70 per Flow-Through Unit for aggregate gross proceeds of up to $9 million (the “Offering”). Each Unit will be comprised of one common share and one-half of one common share purchase warrant of Mega, and each Flow-Through Unit will be comprised of one common share that is a “flow-through share” within the meaning in the Income Tax Act (Canada) and one-half of one common share purchase warrant of Mega. Each whole common share purchase warrant will be exercisable to purchase one common share of Mega for a period of 24 months from the date of closing of the Offering at a price of
.70. The Corporation has granted to the Agents an option to increase the size of the Offering by up to an additional 566,040 Units and 1,500,000 Flow-Through Units at the respective offering prices, exercisable in whole or in part, for a period of up to 48 hours prior to the closing of the Offering. The Units and Flow-Through Units will be offered by way of private placement exemptions from prospectus requirements.
As consideration for the services of the Agents in connection with the Offering, the Agents will receive a commission equal to 7% of the aggregate gross proceeds of the Offering and compensation warrants, exercisable at any time for a period of 24 months following the closing of the Offering, to purchase common shares of Mega for an amount equal to 7% of the total number of Units and Flow Through Units issued pursuant to the Offering, at an exercise price equal to the offering price for the Units (being
.53 per common share).
The net proceeds from the sale of Units are expected to be used to fund Mega’s exploration and development activities, and for general corporate and working capital purposes. The proceeds from the sale of Flow-Through Units are expected to be used by Mega to incur Canadian Exploration Expenses (as defined in the Income Tax Act (Canada)) (“Qualifying Expenditures”) on the continued exploration of Mega’s mineral properties prior to December 31, 2012. Mega will specifically budget $6 million for Qualifying Expenditures for its Monument Bay project in Manitoba and $1 million for Qualifying Expenditures for its projects in Ontario. Mega will renounce the Qualifying Expenditures to subscribers of the Flow-Through Units effective on or prior to December 31, 2011.
The Offering is expected to close on or about November 8, 2011 and is subject to certain conditions typical for a transaction of this nature and the receipt of all necessary regulatory approvals including the approval of the TSX Venture Exchange.
Mega Precious Metals Inc. is a Canadian-based mineral exploration company with several projects in Northwestern Ontario, Manitoba and Nunavut. The Company is committed to an accelerated growth strategy and is backed by a team of experienced mining experts. Mega is poised for rapid expansion through quick response to new opportunities and changes in the market. Mega's common shares trade on the TSX Venture Exchange under the symbol MGP.
For further information, please contact:
Mega Precious Metals Inc.
Jim Rogers, President & Chief Executive Officer
O: 807-766-3380
TF: 877-592-3380
info@megapmi.com