FOREST GATE ANNOUNCES CLOSING OF $600,000 PRIVATE PLACEMENT WITH MINERALFIELDS
28 October 2010 - 11:30PM
PR Newswire (Canada)
MONTREAL, Oct. 28 /CNW/ -- This news release is not for
distribution to United States newswire services or for
dissemination in the United States. Symbol & exchange: FGE-V
MONTREAL, Oct. 28 /CNW Telbec/ - Forest Gate Energy Inc. reports
that it has completed a non-brokered private placement by issuing
an aggregate of 6,111,110 flow-through units at a price of $0.09
per unit and 625,000 hard dollar units at a price of $0.08 per unit
to three limited partnerships associated with the MineralFields
Group of Toronto, Ontario, for gross proceeds to Forest Gate of
$600,000. Each flow-through unit consists of one flow-through
common share and one non-flow-through common share purchase
warrant. Each warrant will entitle the holder to purchase one
additional common share of Forest Gate at a price of $0.20 until
October 27, 2012. The hard dollar unit consists of one
common share and one common share purchase warrant. Each warrant
will entitle the holder to purchase one additional common share of
Forest Gate at a price of $0.15 until October 27, 2012. As
previously disclosed in Forest Gate's September 2, 2010 news
release, the Pershing Gold Property was drilled in 1996,
intersecting 15.54 grams of gold per ton over 1.50 metres, 11.59
grams of gold per ton over 1.66 metres, and 19.23 grams of gold per
ton over 1.33 metres in the banded iron formation. (Source: MRB
& Assoc., Val D'Or, 2003). Forest Gate has a 100% interest in
the Pershing Gold Property During the 2000 to 2003 period, a
well-developed hydrothermal alteration zone was partially mapped in
drill core. The basal portions of the iron formation at the
distal margin to the alteration zone have developed strongly
silicified amphibole-biotite-garnet intervals containing
disseminated to massive lenses of chlorite-pyrrhotite that
consistently contain gold values ranging from 1 to 8.7 gpt over 0.3
to 3.0 m sampling intervals. Several narrow quartz-tourmaline
veins (1m) carrying gold, the highest value noted over the vein
interval being 49.04 grams gold per ton, have also been observed in
the unaltered units overlying the hydrothermally altered iron
formation. (source: MRB) "We are very pleased to be working with
the MineralFields Group to develop our recently-acquired Pershing
Gold Property" said Michael Judson, Forest Gate's President and
Chief Executive Officer. Forest Gate will use the proceeds from the
issuance of the flow-through units to explore its 100% owned
Pershing Gold Property located near Val-d'Or, Québec and will use
the balance of the net proceeds of the private placement for
working capital and general corporate purposes. As a result of the
private placement, there are 46,186,035 common shares of Forest
Gate issued and outstanding. In connection with the closing of the
private placement, Forest Gate paid a cash finder's fee to Limited
Market Dealer Inc. of $30,000, representing 5% of the gross
proceeds raised in the private placement. Forest Gate also
issued compensation options to Limited Market Dealer Inc. to
purchase up to 611,111 units and up to 62,500 hard dollar
units of Forest Gate, representing 10 % of the number of
"flow-through" units and hard dollar units, respectively, sold in
the private placement. The compensation options are
exercisable at a price of $0.09 per unit and at a price of $0.08
per hard dollar unit, until October 27, 2012. The units
to be issued under the compensation options will have the same
terms as the respective units issued in the private placement,
except that none of the shares will be flow-through shares. Under
applicable securities legislation and policies of the TSX Venture
Exchange, the securities issued in the private placement are
subject to a hold period expiring on February 28, 2011. The
technical content of this news release has been approved by Edward
Procyshyn, Mineral Geologist, Forest Gate Energy Inc., a Qualified
Person as defined in National Instrument 43-101 - Standard of
Disclosure for Mineral Projects. About Forest Gate Energy Forest
Gate Energy Inc. is a publicly listed oil and gas exploration and
production, and non-energy resource company trading on the TSX
Venture Exchange under the symbol FGE. The Corporation is seeking
to increase shareholder value through participation and development
of energy and other resources in Canada and internationally. About
MineralFields, Pathway and First Canadian Securities ®
MineralFields Group (a division of Pathway Asset Management), based
in Toronto, Vancouver, Montreal and Calgary, is a mining fund with
significant assets under administration that offers its
tax-advantaged super flow-through limited partnerships to investors
throughout Canada as well as hard-dollar resource limited
partnerships to investors throughout the world. Pathway Asset
Management also specializes in the manufacturing and distribution
of structured products and mutual funds (including the Pathway
Multi Series Funds Inc. corporate-class mutual fund series).
Information about MineralFields Group is available at
www.mineralfields.com. First Canadian Securities ® (a division of
Limited Market Dealer Inc.) is active in leading resource
financings (both flow-through and hard dollar PIPE financings) on
competitive, effective and service-friendly terms, and offers
investment banking, mergers and acquisitions, and mining industry
consulting, services to resource companies. MineralFields and
Pathway have financed several hundred mining and oil and gas
exploration companies to date through First Canadian Securities ®.
FORWARD-LOOKING STATEMENTS Certain statements regarding Forest
Gate, including management's assessments of future plans and
operations and Forest Gate's anticipated financial performance, may
constitute forward-looking statements under applicable securities
laws and necessarily involve known and unknown risks and
uncertainties, most of which are beyond Forest Gate's control.
These risks may cause actual financial and operating results,
performance, levels of activity and achievements to differ
materially from those expressed in, or implied by, such
forward-looking statements. Such factors include, but are not
limited to: the impact of general economic conditions in Canada and
the United States; industry conditions including changes in laws
and regulations including adoption of new environmental laws and
regulations, and changes in how they are interpreted and enforced;
competition; the lack of availability of qualified personnel;
fluctuations in commodity prices; the results of exploration and
development drilling and related activities; imprecision in reserve
estimates; the production and growth potential of Forest Gate's
various assets; fluctuations in foreign exchange or interest rates;
the ability to access sufficient capital from internal and external
sources; and obtaining required approvals of regulatory
authorities. This news release does not constitute an offer to sell
or a solicitation of an offer to buy any of the securities in the
United States. The securities have not been and will not be
registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act"), or any state securities laws
and may not be offered or sold within the United States or to
United States Persons unless registered under the U.S. Securities
Act and applicable state securities laws or an exemption from such
registration is available. Neither TSX Venture Exchange nor
its Regulation Service Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or the accuracy of this release. To view this news
release in HTML formatting, please use the following URL:
http://www.cnw.ca/en/releases/archive/October2010/28/c6581.html
pRobert Kramberger, V-P, Investor Relationsbr/
1-866-666-3040 br/ a
href="mailto:RKRAMBERGER@FORESTGATE.CA"rkramberger@forestgate.ca/a br/
a href="http://www.forestgate.ca"uwww.forestgate.ca/u/a/p
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