Canaco Resources Inc. Announces A$101 Million Treasury Bought Deal Financing and $32.4 Million Secondary Bought Deal Financing
25 February 2011 - 12:14AM
PR Newswire (Canada)
VANCOUVER, Feb. 24 /CNW/ -- NOT FOR DISTRIBUTION TO UNITED STATES
NEWS WIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR
DISSEMINATION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR
INTO THE UNITED STATES VANCOUVER, Feb. 24 /CNW/ - Canaco Resources
Inc. (TSXV: CAN) ("Canaco" or the "Company") is pleased to announce
it has entered into an agreement with a syndicate of underwriters
co-led by Canaccord Genuity Corp. and TD Securities Inc. (the
"Underwriters"), pursuant to which the Underwriters have agreed to
purchase, on a bought deal basis, 18,700,000 common shares (the
"Common Shares") of the Company at a price of $5.40 per share for
aggregate gross proceeds to the Company of $100,980,000 (the
"Treasury Offering"). The Company has also agreed to grant the
Underwriters an over-allotment option, exercisable for a period of
up to 30 days following the closing of the Treasury Offering, to
purchase from the Company up to an additional 2,805,000 Common
Shares at a price of $5.40 per share for additional gross proceeds
of up to $15,147,000 (the "Over-Allotment Option"). If the
Over-Allotment Option is exercised in its entirety, the aggregate
gross proceeds of the Treasury Offering to the Company will be
$116,127,000. In addition to the Treasury Offering, the
Underwriters have agreed to purchase, on a bought deal basis, from
SinoTech (Hong Kong) Corporation Limited ("SinoTech"), 6,000,000
Common Shares at the same price as the Treasury Offering for gross
proceeds to SinoTech of $32,400,000 (the "Secondary Offering"). The
Company will not receive any proceeds from the Secondary Offering.
SinoTech currently holds 48,000,000 Common Shares, representing
approximately 28% of the Company on an undiluted basis. After
giving effect to the Treasury Offering and the Secondary Offering,
but before giving effect to the Over-Allotment Option, SinoTech
will hold 42,000,000 Common Shares, representing approximately 22%
of the Company on an undiluted basis. In connection with the
Treasury Offering and the Secondary Offering, the Underwriters will
receive a cash commission equal to 5.5% of the gross proceeds
raised pursuant to the Treasury Offering (including upon exercise
of the Over-Allotment Option) and the Secondary Offering. In
connection with the Treasury Offering, the Underwriters will also
receive broker warrants (the "Broker Warrants") equal to 3.0% of
the aggregate number of Common Shares sold pursuant to the Treasury
Offering (including upon exercise of the Over-Allotment Option).
Each Broker Warrant shall be exercisable to purchase one Common
Share at a price of $6.00 at any time up to 24 months after closing
of the Treasury Offering. Net proceeds from the Treasury Offering
are expected to be used by Canaco to fund ongoing development and
exploration activities on the Company's African mineral properties
and for general corporate and working capital purposes. The Common
Shares to be issued pursuant to the Treasury Offering, and the
Common Shares to be sold pursuant to the Secondary Offering, will
be offered by way of a short form prospectus in the provinces of
British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.
Closing of the Treasury Offering and the Secondary Offering is
scheduled to occur on or about March 22, 2011 and is subject to
certain conditions including, but not limited to, the receipt of
all necessary regulatory and other approvals including the approval
of the TSX Venture Exchange and the securities regulatory
authorities. The securities offered have not been, and will not be,
registered under the U.S. Securities Act of 1933, as amended (the
"U.S. Securities Act") or any U.S. state securities laws, and may
not be offered or sold in the United States or to, or for the
account or benefit of, United States persons absent registration or
any applicable exemption from the registration requirements of the
U.S. Securities Act and applicable U.S. state securities laws. This
news release shall not constitute an offer to sell or the
solicitation of an offer to buy securities in the United States,
nor shall there be any sale of these securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful. About
Canaco Canaco is a Vancouver-based mineral exploration company
focused on advanced exploration in Africa. Built on a foundation of
experienced management and focused on rapidly advancing exploration
projects in Tanzania and throughout Africa, Canaco believes it is
well positioned to build shareholder value through discovery and
resource development. Canaco's shares trade on the TSX Venture
Exchange under the symbol CAN. On behalf of the Board of Directors,
Andrew Lee Smith, P.Geo President, CEO and Director Cautionary
Statement Regarding Forward-Looking Information This news release
contains "forward-looking information" within the meaning of
applicable Canadian securities legislation. Generally,
forward-looking information can be identified by the use of
forward-looking terminology such as "anticipate", "believe",
"plan", "expect", "intend", "estimate", "forecast", "project",
"budget", "schedule", "may", "will", "could", "might", "should" or
variations of such words or similar words or expressions.
Forward-looking information is based on reasonable assumptions that
have been made by the Company as at the date of such information
and is subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity,
performance or achievements of the Company to be materially
different from those expressed or implied by such forward-looking
information, including but not limited to: risks associated with
mineral exploration and development; metal and mineral prices;
availability of capital; accuracy of the Company's projections and
estimates; interest and exchange rates; competition; stock price
fluctuations; availability of drilling equipment and access; actual
results of current exploration activities; government regulation;
political or economic developments; environmental risks; insurance
risks; capital expenditures; operating or technical difficulties in
connection with development activities; personnel relations; the
speculative nature of strategic metal exploration and development
including the risks of diminishing quantities of grades of
reserves; contests over title to properties; and changes in project
parameters as plans continue to be refined. Forward-looking
statements are based on assumptions management believes to be
reasonable, including but not limited to the price of gold; the
demand for gold; the ability to carry on exploration and
development activities; the timely receipt of any required
approvals; the ability to obtain qualified personnel, equipment and
services in a timely and cost-efficient manner; the ability to
operate in a safe, efficient and effective manner; and the
regulatory framework regarding environmental matters, and such
other assumptions and factors as set out herein. Although the
Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not
place undue reliance on forward-looking information. The
forward-looking information contained in this news release is
included for the purpose of providing investors with information to
assist them in understanding the Treasury Offering and the
Secondary Offering and may not be appropriate for other purposes.
The Company does not undertake to update any forward-looking
information that is included herein, 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 NEWS RELEASE To view this news
release in HTML formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/February2011/24/c5633.html
pMeghan Brown, Director Investor Relationsbr/ Telephone:
604-488-0822 or 1-866-488-0822br/ Visit our website: a
href="http://www.canaco.ca"www.canaco.ca/abr/ Email: a
href="mailto:investors@canaco.ca"investors@canaco.ca/a/p
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