Golden Band Resources Inc. (TSXV: GBN) has announced that it has arranged a private placement with Northern Securities Inc. for gross proceeds of up to $10 million with a bought deal commitment from Northern Financial Corporation, subject to certain conditions.
The private placement is subject to Northern Securities completing due diligence and other customary closing conditions. The offering will consist of a minimum of $5,000,000 in Units and up to $5,000,000 in Flow-Through Units, at a price of $0.45 per Unit and $0.58 per Flow-Through Unit. The Company has also granted Northern Securities an over-allotment option to place up to an additional $5,000,000 in Units, Flow-Through Units or a combination thereof.
Each Unit will consist of one common share (a "Common Share") and one common share purchase warrant (a "Hard Dollar Warrant"). Each Hard Dollar Warrant is exercisable for a period of three years, entitling the holder to acquire one Common Share at an exercise price of $0.60 for the first two years and at an exercise price of $0.65 for the final year.
Each Flow-Through Unit will consist of one Common Share and a half common share purchase warrant (each whole warrant a "Warrant"). Each Warrant is exercisable for a period of two years, entitling the holder to acquire one Common Share at an exercise price of $0.70.
As compensation for the offering, Golden Band will pay Northern Securities a commission equal to 8% of the aggregate gross proceeds of the offering and will issue to Northern Securities a number of Broker Warrants equal to 8% of the aggregate number of Units and Flow-Through Units sold pursuant to the offering. Each Broker Warrant will be exercisable into one Unit at the Unit issue price for a period of 2 years. No commission will be payable to Northern Securities in respect of up to $3,000,000 of subscriptions from the President's List.
The offering is subject to the approval of the TSX Venture Exchange. All securities issued pursuant to the private placement will be subject to a four-month hold period.
The gross proceeds from the issuance of the Flow-Through Units will be used to incur Canadian Exploration Expenses (as defined in the Income Tax Act (Canada)). The net proceeds from the issuance of the Units will be used for exploration and development of the Corporation's La Ronge Project and for general corporate and working capital purposes.
Ronald Netolitzky, Golden Band's Executive Chairman, commented, "This financing will enable Golden Band to drill various deposits, most importantly the Komis deposit, which has not been drilled to depth and is open along strike and at depth. As a new producer we are focused on resource expansion in several of our 12 deposits to generate a steady mill feed for the Jolu mill. Our ultimate goal is to operate our mill at 1,000 tonnes per day and to produce 100,000 ounces per year."
The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
Source: Golden Band Resources Inc.