Mr. Paul Huet reports
KLONDEX ANNOUNCES CLOSING OF C$42.6 MILLION MIDAS FINANCING
Further to its news release dated Dec. 6, 2013, and its announcement to purchase the Midas mine and mill from Newmont Mining Corp., Klondex Mines Ltd. has closed its private placement offering of subscription receipts. The offering was upsized to gross proceeds of $42.63-million on the sale of 29.4 million subscription receipts. A syndicate of agents led by GMP Securities LP, and including MGI Securities Inc., Mackie Research Capital Corp., M Partners Inc., Jones, Gable & Company Ltd. and PI Financial Corp., acted as agents under the offering.
Each subscription receipt issued pursuant to the offering was sold at a price of $1.45 and will be deemed to be converted upon satisfaction of the escrow release conditions (as defined below), without payment of any additional consideration, into one common share of the company. The subscription receipts provide for appropriate adjustments to be made in the event of share dividends, consolidations, distributions and other forms of capital reorganizations.
The gross proceeds of the offering, less the agents' expenses and out-pocket costs, and legal expenses, have been deposited in escrow. The escrowed funds will be released from escrow to the company upon the satisfaction of the following conditions: (i) the satisfaction or waiver of all conditions precedent to the proposed acquisition of the Midas mine and related ore milling facility (previously announced by the company on Dec. 4, 2013), other than the delivery of the purchase price of the acquisition, and (ii) receipt by the company of the requisite approval of the company's shareholders to the offering pursuant to the requirements of the Toronto Stock Exchange. If the escrow release conditions are not satisfied on or before Feb. 28, 2014, the gross proceeds will be returned to the holders of the subscription receipts and the subscription receipts will be cancelled. The subscription receipts and the underlying shares will be subject to a four-month-plus-one day hold period pursuant to applicable Canadian securities laws.
The net proceeds from the offering are expected to be used to partially fund the purchase price of the acquisition and for the repayment of $7-million in outstanding notes. The company is targeting to complete the acquisition in early February.
We seek Safe Harbor.
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