HALIFAX, Nov. 1, 2013 /CNW/ - Stockport Exploration (TSX: SPT) (OTC: LMTCF) is pleased to announce that on October 31, 2013, it closed the
previously announced non-brokered private placement ("Private
Placement") of 1,196 units at a price of $1,001 per unit for aggregate
gross proceeds of $1,197,196. The placement, initially announced at
$1,001,000, was oversubscribed.
"This financing was offered exclusively to Kenyan investors and is
earmarked to finance a program to assess the opportunity for surface
gold recovery at our Nyanza concession in southwestern Kenya," said Jim
Megann, Stockport Exploration's President and CEO. "Kenya has a long
history of small-scale and artisanal surface gold recovery, and our
investors in Kenya are quite familiar with surface gold recovery. The
area around our Nyanza concession has a history of successful surface
recovery programs."
Finders responsible for the introduction of certain investors to the
Private Placement are entitled to a commission in the amount up to 7.0%
of the gross proceeds, payable in a combination of cash and shares,
received from the sale of units ("Finder's Fee") to such investors.
Net proceeds of the Private Placement will be used to fund a two-phased
exploration and potential surface gold recovery program at license SPL
214 on the Corporation's Nyanza project in Kenya.
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Phase One - sampling, metallurgy, permitting, and plant equipment
procurement.
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Phase Two - capital investment and plant operation. The Corporation
will only proceed to Phase Two if Phase One is successful.
Details of the investment as the Corporation progresses through the gold
recovery program are:
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Should the Corporation complete Phase One but elect not to proceed with
Phase Two, each investor will receive:
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the conversion of 25% of the original investment into SPT common shares
at $0.10 per share ; and
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the return of 75% of the investment amount plus interest.
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These rights will be forfeited should the Corporation proceed to Phase
Two.
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Should the Corporation elect to proceed to Phase Two after the
completion of a successful Phase One program, each investor will
receive:
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a repayment of the convertible debenture in the amount of 100% of the
investment ($1,000 per unit) based on 75% of free cash flow generated
from the surface gold recovery project;
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the right to purchase a preferred share in Stockport Mining Kenya, a
subsidiary of the Corporation. $1 per unit has been allocated to the
cost of the preferred share. The preferred share will pay a premium
entitlement of 110% of the original investment ($1,000 per unit) from
75% of free cash flow generated from the gold recovery project and is
then redeemed by SMK; and
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1,000 common share purchase warrants for each unit will be issued at the
commencement of Phase Two, with an exercise price of $0.10 per share
and an expiry date 5 years from the date of issue.
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If the amount of the debenture plus the 110% premium entitlement is not
paid by the five year maturity date, then the amount of debt and
premium entitlement, less any repayments to that date, will be
converted into Stockport common shares at a conversion price of $0.50
per share.
The Private Placement is subject to final Toronto Stock Exchange
approval. All securities to be issued pursuant to the Private
Placement will be subject to a four-month hold period.
About Stockport Exploration Inc.:
Stockport is focused on the exploration of a district-scale land package
along a prolific gold-hosting greenstone belt in southwest Kenya. The
2,000 km2 property package has the potential to host multiple mineral deposits,
including Lode-Au and Cu-Zn-Au-Ag massive sulphide types. Stockport
also holds the La Morena Copper-Silver property in Coahuila, Mexico,
the Seymour Lake Tantalum-Lithium-Beryllium property near Armstrong,
Ontario, and the KM61 property, which hosts a 43-101 Compliant
Molybdenum-Copper-Silver Resource, also near Armstrong, Ontario.
Forward-Looking Information:
This release includes certain statements that may be deemed
"forward-looking statements". All statements in this release, other
than statements of historical facts, that address future production,
reserve potential, continuity of mineralization, exploration drilling,
exploitation activities and events or developments that the Company
expects are forward-looking statements. Although the Company believes
that the expectations expressed in such forward-looking statements are
based on reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those in the forward-looking statements. The likelihood
of future mining at the Nyanza Project is subject to a large number of
risks and will require achievement of a number of technical, economic
and legal objectives, including obtaining necessary mining and
construction permits, completion of pre-feasibility and final
feasibility studies, preparation of all necessary engineering for pits
and processing facilities as well as receipt of significant additional
financing to fund these objectives, as well as funding mine
construction. Such funding may not be available to the Company on
acceptable terms or on any terms at all. There is no known ore at the
Nyanza Project and there is no assurance that the mineralization at the
Nyanza Project will ever be classified as ore. For more information on
the Company and the risk factors inherent in its business, investors
should review the Company's Annual Information Form at www.sedar.com
SOURCE Stockport Exploration Inc.
