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Colt Resources arranges $2.5-million (U.S.) financing
2013-07-04 18:03 ET - News Release
Mr. Nikolas Perrault reports
COLT RESOURCES ANNOUNCES SENIOR NOTE FINANCING
Colt Resources Inc. intends to sell, on a private placement basis, a minimum of 10 and a maximum of 60 units consisting of senior notes and warrants, for gross proceeds to the company of a minimum of $2.5-million (U.S.) and a maximum of $15-million (U.S.). Each unit consists of $250,000 (U.S.) in principal amount of 10-per-cent secured senior notes and common share purchase warrants to purchase up to 555,555 common shares of the company. The offering will be managed by TerraNova Capital Partners Inc. and offered through its broker/dealer subsidiary TerraNova Capital Equities Inc.
The maturity date of the notes will be the earlier of: (i) five years from the date of the first closing of the offering, or (ii) the date on which the company or an affiliate of the company completes a financing in one or a series of closings of debt and/or equity securities in an amount equal to or greater than $50-million (U.S.). The notes will bear interest at 10 per cent per annum. Interest is calculated daily on the notes and will be payable semi-annually on each June 30 and Dec. 31, commencing on Dec. 31, 2013, at the election of the holder, subject to the provision, (i) in fully paid and non-assessable common shares of the company at a price per share equal to the 30-day volume-weighted average closing price of the common shares on the TSX Venture Exchange for the 30-day period ending on June 25 or Dec. 25, as the case may be, immediately preceding the applicable payment date, subject to the approval of the exchange prior to each issuance of common shares in payment of interest, or (ii) in cash. Each note will be a senior obligation of the company and will rank ahead of any subordinated indebtedness of the company, present or future. Each note will rank pari passu with all other notes.
Each warrant will entitle the holder to purchase one common share at an exercise price of 45 U.S. cents per common share on or before five years from the date of the first closing of the offering. The warrants will be subject, at the company's discretion, to an accelerated exercise after six months following the last closing of the offering if the VWAP of the common shares is equal to or greater than 200 per cent of the exercise price of the warrants for a period of 30 days.
Where appropriate, the company will pay a placement agent or finder's fee of up to 8 per cent of the gross proceeds from the offering and issue common share purchase warrants equal to up to 8 per cent of the gross proceeds from the offering divided by the VWAP of the common shares for a period of 30 days before their issuance.
The use of funds will be primarily directed toward the completion of a bankable feasibility study on the company's Boa Fe gold property located in Portugal, as well as for securing additional near-term production assets and for general working capital purposes.
The offering is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the exchange. The offering may be completed in one or more closings, the first closing being also subject to the issuance of a minimum of 10 units, for gross proceeds to the company of $2.5-million (U.S.). The securities to be issued under the offering will be subject to a four-month hold period in accordance with applicable Canadian securities laws.
About TerraNova
TerraNova Capital Partners and its broker dealer subsidiary, Terra Nova Capital Equities, is a boutique investment and merchant banking firm with global operations, specializing in growth sectors with notable expertise in energy and mining production, alternative energy, and clean technologies. TerraNova is a member firm of Global Alliance Partners, a network of financial services firms comprising 85 offices in 55 countries worldwide.