Magnum Energy Announces Closing of Equity Financing
19 May 2011 - 3:17AM
Marketwired
MAGNUM ENERGY INC. (the "Corporation") (TSX VENTURE: MEN) is
pleased to announce that it has closed its previously announced
financing (the "Offering"). Pursuant to the Offering, the
Corporation has issued a total of 10,219,000 Units (the "Unit(s)")
at a price of $0.30 per Unit for gross proceeds of $3,065,700. Each
Unit consists of one Class A Voting Common Share of the Corporation
(a "Class A Common Share") and one-half of a non-transferable Class
A Common Share purchase warrant (each whole warrant a "Warrant").
Each whole Warrant will entitle the holder thereof to purchase one
Class A Common Share (a "Warrant Share") at an exercise price of
$0.45 per Warrant Share until May 18, 2012, subject to
acceleration. If the closing sales price of the Class A Common
Shares (or the closing bid, if no sales were reported on a trading
day) as quoted on the TSX Venture Exchange is greater than $0.60
for 20 consecutive trading days, the Corporation may, within 5 days
of such event, accelerate the expiry date of the Warrants to the
30th day on which the Corporation gives notice of such acceleration
in accordance with the Warrants.
The Corporation has agreed to pay to Wolverton Securities Ltd.
(the "Agent") a commission equal to 8% of the gross proceeds raised
plus a corporate finance fee in addition to the reimbursement of
legal fees and incidental expenses it incurred with respect to the
Offering. As additional compensation, the Corporation has granted
to the Agent and its sub-agents non-transferable options to
purchase 817,520 Units (equal to 8% of the total Units issued), at
$0.30 per Unit, until May 18, 2013. The Agent has also been granted
the right of first refusal to participate in and act as an agent of
the Corporation with respect to subsequent public or private equity
or debt financings undertaken by May 18, 2012.
The proceeds from the Offering will be used to partially pay for
the Corporation's share of the consideration paid in the recent
acquisition of a Viking oil producing property in Provost, Alberta.
Proceeds will also be used to partially repay bank indebtedness,
for capital expenditures to be incurred in the Provost and Sedalia
areas of Alberta, and for general working capital. See the
Corporation's short form prospectus dated May 3, 2011 for further
details.
ON BEHALF OF THE CORPORATION
Richard A. Nemeth, President
Forward-looking Statements
This news release contains certain forward-looking information
and statements that are based on the Corporation's current
expectations, estimates, projections and assumptions in light of
its experience and its perception of historical trends. In this
news release, such forward-looking information and statements can
be identified by terminology such as "will", "to be", "expected",
"anticipated" and similar expressions.
In particular, this news release contains forward-looking
statements and information relating to the planned use of proceeds
of the financing. These forward-looking statements and information
are being made by the Corporation based on certain assumptions that
the Corporation has made in respect thereof as at the date of this
document. These forward-looking statements are not guarantees of
future performance and are subject to a number of known and unknown
risks and uncertainties, including, but not limited to:
non-performance of agreements in accordance with their terms; the
impact of competition; commodity prices; regulatory environment and
inability to obtain required regulatory approvals; fluctuations in
operating results; the ability of the Corporation to raise
sufficient capital to complete future projects and satisfy future
commitments; labour and material shortages; and certain other risks
detailed from time to time in the Corporation's public disclosure
documents including, among other things, those detailed under the
heading "Risk Factors" in the annual information form of the
Corporation for the year ended August 31, 2010, dated March 18,
2011 and in its short form prospectus, both of which can be found
at www.sedar.com.
Accordingly, readers are cautioned that events or circumstances
could cause results to differ materially from those predicted,
forecasted or projected. Such forward-looking statements are
expressly qualified by the above statements. The Corporation does
not undertake any obligation to publicly update or revise any
forward-looking statements or information contained herein, except
as required by applicable laws.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy these securities in any
jurisdiction. The securities have not 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 in the United States or to any U.S. person except
in certain transactions exempt from the registration requirements
of the U.S. Securities Act and applicable state securities
laws.
Neither 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.
Contacts: Magnum Energy Inc. Richard Nemeth President & CEO
604.669.3155 rnemeth@magnumenergyinc.com
www.magnumenergyinc.com
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