/NOT FOR DISTRIBUTION TO UNITED STATES' NEWSWIRE SERVICES OR
DISSEMINATION IN THE UNITED STATES/
TORONTO, Jan. 31, 2013 /CNW/ - Atlanta Gold Inc. (TSXV: ATG; OTCQX: ATLDF) announces that it intends to complete a private placement of senior
secured gold notes ("Gold Notes") for gross proceeds of up to US$8 million. The Gold Notes will be sold
as part of a Unit, with each Unit consisting of US$1.00 principal
amount Gold Notes and one common share purchase warrant, exercisable at
C$0.10 per share. Units will be issued in minimum denominations of
US$100,000.
The Gold Notes will bear interest of 10% per annum and interest as well
as principal, amortized at 25%, 35% and 40%, will be repayable annually
on November 30, 2013, 2014 and 2015, respectively. Principal and
interest will be repayable in physical gold, or at the election of
either the Company or the investor, in the cash equivalent thereof
based on spot gold prices at the time of payment. The number of ounces
of gold to be delivered to each investor in satisfaction of principal
and interest payments will be calculated based on Reference Gold Prices
per ounce of US$1,300 in Year 1, US$1,200 in Year 2 and US$1,100 in
Year 3. The Gold Notes will be secured by a limited recourse guarantee
of the Company's wholly-owned subsidiary, Atlanta Gold Corporation
("AGC") and the guarantee will be secured by a first ranking mortgage
of AGC's right, title and interest in the Atlanta Project, located in
Idaho U.S.A.
The warrants will be exercisable at an exercise price of C$0.10 per
share until November 30, 2015. The Company will have the right to
accelerate the expiry date of the warrants if the closing price of the
Company's common shares on the TSX Venture Exchange exceeds $0.25 for
20 consecutive days on which the Company's shares trade.
Net proceeds from the offering will be used for exploration, excavating
and test processing of bulk samples, environmental permitting,
engineering and development in respect of the Atlanta Project, to
reduce indebtedness and for general working capital purposes.
Completion of the offering is subject to the approval of the TSX Venture
Exchange and the execution of definitive documentation. All securities
issued under the offering will be subject to a four-month statutory
hold period. Certain insiders of the Company may participate in the
offering.
Mr. Eric Sprott has personally signed a non-binding letter of intent
reflecting his intention to purchase the first US$2 million of the
Units. The Company will pay a 4% cash finder's fee to Brant Securities
Limited in connection with this purchase, subject to regulatory
approval.
"This offering and Eric Sprott's commitment for the first US$2 million
of the offering represent an important milestone in the development of
the Atlanta Project providing the potential to finance project
development without excessive dilution," said Atlanta Gold President
and CEO Wm Ernest Simmons. "Key objectives are to work closely with the
government and local community at Atlanta, to establish an
environmentally friendly mining project and to determine the economic
viability to develop the mineral resource in a responsible manner."
The securities offered have not been, and will not be, registered under
the United States Securities Act of 1933, as amended, or any state
securities laws and, unless so registered, may not be offered or sold
in the United States or to U.S. persons except pursuant to an exemption
from such registration requirements. This news release shall not
constitute an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any offer or sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful.
About the Company
Atlanta Gold Inc. (TSXV: ATG; OTCQX: ATLDF) holds through its 100% owned subsidiary, Atlanta Gold Corporation,
leases, options or ownership interests in its Atlanta properties which
comprise approximately 2,159 acres located (8.74 square kilometres)
located 90 air kilometres east of Boise, in Elmore County, Idaho. A
long history of mining makes Atlanta very suitable for development of
new mining projects. The Company is focused on advancing its core
asset, Atlanta, towards mine development and production.
Forward-Looking Information
This news release contains forward-looking information and
forward-looking statements (collectively "forward-looking statements")
within the meaning of applicable securities laws. All statements, other
than statements of historical fact, are forward-looking statements. We
use words such as "may", "intend", "will", "should", "anticipate",
"plan", "expect", "believe", "estimate" and similar terminology to
identify forward-looking statements, including with respect to the
completion of the offering, the participation of Mr. Sprott in the
financing, the use of proceeds from the offering and the payment of the
fee to Brant Securities Limited. Such are based upon the assumption
that the Company will receive the approval of the TSX Venture Exchange
to the completion of the financing, that definitive documentation will
be entered into by Mr. Sprott and other investors in a timely manner
and that the financing will be completed within the time permitted by
the Exchange. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause our actual
results to differ materially from those expressed or implied in the
forward-looking statements and accordingly, readers should not place
undue reliance on those statements. Risks and uncertainties that may
cause actual results to vary include, but are not limited to, the
Company's and AGC's limited financial resources; fluctuations in
resource prices and currency exchange rates; changes in general
economic conditions and in the financial markets; the implementation of
additional penalties against AGC should payment of the penalty imposed
by the Court in respect of water treatment not be achieved in the time
permitted; as well as other risks and uncertainties which are more
fully described in the Company's annual and quarterly Management's
Discussion and Analysis and in other Company filings with securities
and regulatory authorities which are available at www.sedar.com. Should one or more risks and uncertainties materialize or should any
assumptions prove incorrect, then actual results could vary materially
from those expressed or implied in the forward-looking statements and
accordingly, readers should not place undue reliance on those
statements. Readers are cautioned that the foregoing lists of risks,
uncertainties, assumptions and other factors are not exhaustive. The
forward-looking statements contained in this news release are made as
of the date hereof and the Company undertakes no obligation to update
publicly or revise any forward-looking statements contained herein or
in any other documents filed with securities regulatory authorities,
whether as a result of new information, future events or otherwise,
except in accordance with applicable securities laws.
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: Atlanta Gold Inc.
<p> <b>Atlanta Gold Inc.</b>:<br/> Wm. Ernest Simmons<br/> President and CEO<br/> Telephone: (208) 424-3343<br/> Fax: (208) 338-6513<br/> Email: <a href="mailto:esimmons@atlantagold.com">esimmons@atlantagold.com</a><br/> </p> <p> <b>Atlanta Gold Inc.</b><br/> Bill Baird<br/> Vice President and CFO<br/> Telephone: (416) 777-0013<br/> Fax: (416) 777-0014<br/> Email: <a href="mailto:info@atgoldinc.com">info@atgoldinc.com</a><br/> </p> <p> <b>CHF Investor Relations</b><br/> Juliet Heading<br/> Senior Account Manager<br/> Telephone: (416) 868-1079 ext. 239<br/> Fax: (416) 868-6198<br/> Email: <a href="mailto:juliet@chfir.com">juliet@chfir.com</a> </p>