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Choice Gold closes $1.5-million first offering tranche

2014-08-19 20:08 ET - News Release

Also News Release (C-FMM) Full Metal Minerals Ltd (2)

Mr. Gianni Kovacevic of Choice Gold reports

CHOICE GOLD, FULL METAL AND ENEXCO SPINCO PROVIDE UPDATE ON COPPERBANK

Choice Gold Corp., Full Metal Minerals Ltd. and 0999279 B.C. Ltd. (IEC Spinco, a former subsidiary of International Enexco Ltd.) are providing an update on the proposed business combination to form Copperbank Resources Corp. (see press releases dated March 19, 2014, and June 3, 2014) as contemplated by the arrangement agreement between Choice, Full Metal and IEC Spinco entered into on June 3, 2014.

Choice is pleased to announce that it has closed the initial tranche of a proposed $2-million non-brokered financing, raising gross proceeds of $1,589,995 through the sale of an aggregate of 79,499,750 subscription receipts at a price of two cents per subscription receipt. The proceeds of the offering will be held in escrow pending satisfaction of conditions precedent to the completion of the business combination on or before Oct. 15, 2014, following which each subscription receipt will be deemed to be exchanged, without payment of additional consideration, for one unit.

"This initial financing is the first step of Copperbank's objective to create an aggregator of advanced-stage copper deposits with established resources," said Gianni Kovacevic, chief executive officer of Choice Gold. "We look forward to distribution of our information circular and receiving shareholder approval for this exciting new venture."

Each unit will consist of one common share of Choice and one share purchase warrant. Each whole warrant will be exercisable into one additional common share of Choice at a price of 10 cents per share for a period of five years. All of the securities issued in the offering are subject to a hold period expiring on the earlier of the completion of the business combination and Dec. 20, 2014.

Should the business combination not be completed by Oct. 15, 2014, the subscribers may elect to cancel the subscription receipts and have funds returned. In the absence of such an election, the subscription receipts will be automatically cancelled, and all funds held in escrow will be automatically returned to subscribers on the date which is 15 business days following the release deadline. In the event that the release conditions are met after the release deadline but before the cancellation of subscription receipts, at the written election of Choice, Full Metal and IEC Spinco, the subscription receipts will be exchanged for units, and the applicable subscription funds will be released to Choice.

Each party has waived the minimum $2.0-million financing as a condition to the completion of the business combination. The parties have agreed that the gross proceeds of this initial tranche of the offering shall be sufficient to satisfy the condition precedent within the arrangement agreement, in the event that Choice is unable to close subsequent tranches.

Aggregate finders' fees of $117,599.60 in cash and 5,879,980 warrants will be paid in connection with the offering upon completion of the business combination. The proceeds of the offering, once released from escrow, will be utilized to further Copperbank's business objective of further consolidating copper development assets, for general and administrative expenses, and for working capital.

Full Metal has received certain of the third party consents from underlying property owners for the Pyramid copper project, which are required for the completion of the business combination. Full Metal continues to finalize the remaining outstanding consents, which are expected to be received shortly.

The completion of the business combination remains subject to the receipt of outstanding third party consents, approval by the securityholders of each of Choice, Full Metal and IEC Spinco, and the approval of the TSX Venture Exchange and the Canadian Securities Exchange, as well as the approval of the Supreme Court of British Columbia. There can be no assurance that the business combination will be completed as proposed or at all.

The arrangement agreement is available on SEDAR under the profiles of each of IEC Spinco, Choice and Full Metal. Additional details concerning the business combination will be provided in the joint management information circulars of IEC Spinco, Choice and Full Metal, to be filed on SEDAR and mailed to each company's respective securityholders. The business combination will be subject to the approval of 66-2/3 per cent of the shares voted by IEC Spinco, Full Metal and Choice shareholders who vote at their respective meetings.

The business combination is expected to be completed on or before Oct. 15, 2014.

We seek Safe Harbor.

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