/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS./
TORONTO, Dec. 4, 2013 /CNW/ - Ecuador Gold & Copper Corp. (TSXV: EGX)
(the "Company") is pleased to announce that it has closed the fourth and final
tranche (the "Final Tranche Closing") of its non-brokered private placement for gross proceeds of up to
US$3,250,000 (the "Private Placement").
A total of US$150,000 (C$159,150) was raised pursuant to the Final
Tranche Closing, by the issuance to Aura International Services Ltd.
("Aura") of 2,000,000 units (each a "Unit") of the Company at a price of US$0.075 per Unit. Each Unit is
comprised of one common share (a "Share") of the Company and one common share purchase warrant (a "Warrant") of the Company. Each Warrant entitles the holder to acquire a Share
at a price US$0.075 per Share until September 15, 2014.
Upon closing of the Final Tranche, Aura owns a total aggregate of
89,730,256 Shares and 53,174,585 common shares purchase warrants (the "Aura Warrants") of the Company, representing approximately 45.18% of the issued and
outstanding Shares of the Company on a non-diluted basis, 45.73% on a
partially diluted basis after giving effect to exercise of the Aura
Warrants, and 56.3% on an extended partially-diluted basis after giving
effect to exercise of all of the Warrants held by Aura after completion
of the Final Tranche Closing. Prior to the Final Tranche Closing, Aura
owned 44.9% of the Company's issued and outstanding Shares on a
non-diluted, 48.7% of the Company's issued and outstanding Shares on a
partially diluted basis, and 56.7% on an extended partially-diluted
basis. In exchange for the purchase by Aura of all of the Units under
the Private Placement and the exercise of the Warrants contained in the
Units providing aggregate gross proceeds of US$6.2 million to the
Company, Aura will be entitled to nominate up to three directors of the
Company.
All Warrants issued to Aura in conjunction with the total private
placement of $3.25 million have an expiry date of September 15, 2014.
Aura is a "related party" to the Company under MI 61-101 as it is a
"control person" of the Company by virtue of its shareholdings in
excess of 20% of all issued and outstanding Shares of the Company.
Accordingly, the Final Tranche Closing of the Private Placement is a
"related party transaction" under MI 61-101.
Effective August 14, 2013, the Private Placement was unanimously
approved by the board of directors of the Company. On October 11, 2013,
the Company also received minority shareholder approval for the Private
Placement pursuant to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101") at a special meeting of the shareholders of the Company held on
October 11, 2013 (the "Shareholders' Meeting").
On November 6, 2013 the Company agreed to the subscription by Aura of
the Units pursuant to a subscription agreement containing the customary
provisions for the subscription of units of a reporting issuer with
such shares comprising the Units posted and listed for trading on the
Exchange.
There has been no formal valuation of the Company or its assets to date,
as there has not yet been any necessity to do so. The Private
Placement is a transaction that is exempt from the formal valuation
requirements under Section 5.4 of MI 61-101 pursuant to Subsections
5.5(b) and 5.5(c) of MI 61-101 because:
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(a)
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no securities of the Company are listed or quoted on the Toronto Stock
Exchange, the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Stock Market, or a stock exchange outside of Canada and the
United States other than the Alternative Investment Market of the
London Stock Exchange or the PLUS markets operated by PLUS Markets
Group plc.; and
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(b)
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the Private Placement is a distribution of securities of the Company to
Aura for cash consideration, and
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(i) neither the Company nor, to the Company's knowledge after reasonable
inquiry, Aura has knowledge of any material information concerning the
Company or its securities that has not been generally disclosed; and
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(ii) the Company's management information circular dated September 10,
2013 in respect of the Shareholders' Meeting fully describes the
Private Placement and includes a description of the effect of the
Private Placement on the direct and indirect voting interest of Aura.
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Aura purchased all of the Units under the Final Tranche Closing. The
proceeds of the Final Tranche Closing will be used for exploration and
development expenses, and as additional working capital. The Units
issued are subject to a four‐month hold period from the date of
issuance.
Cautionary Note
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE Ecuador Gold and Copper Corp.
