Gold Hawk Resources Inc. (TSX VENTURE:GHK) announces today that it closed a non-brokered private placement for 6,000,000 common shares at a subscription price of $1.25 per common share, for aggregate gross proceeds of $7.5 million.
The TSX Venture Exchange provided final acceptance today for the Private Placement.
The Private Placement was fully subscribed to by Coalcorp Mining Inc. ("Coalcorp"). Based on public filings, Pala Investments Holdings Limited owns 44% of Coalcorp's issued and outstanding common shares as of October 29, 2010.
Prior to committing to the financing, Coalcorp conducted due diligence on the Company's Oracle Ridge Copper Mine, including conducting a site visit. As a result of the Private Placement, Coalcorp now owns approximately 19.7% of Gold Hawk's issued and outstanding common shares.
Gold Hawk intends to use the net proceeds of the Private Placement to fund exploration and development expenditures on the Oracle Ridge copper mine property and for general corporate purposes. At closing of the transaction, Gold Hawk has approximately $25 million in cash and investments on hand.
"We are pleased to have the support of the Coalcorp team as we pursue an aggressive growth strategy that we believe will deliver superior shareholder value," said Mr. Kevin Drover, Gold Hawk's Chairman and CEO. "Gold Hawk is advancing the pre-production work at the Oracle Ridge Copper Mine in Arizona and is positioned to deliver strong growth in the future as we seek out additional expansion and investment opportunities."
Pursuant to the terms of the financing, Coalcorp is entitled to a representative on Gold Hawk's board of directors so long as it holds at least 5% of the issued and outstanding Gold Hawk common shares. A nominee of Coalcorp, that is acceptable to Gold Hawk and the TSX Venture Exchange, is expected to be appointed to the board within 90 days.
All common shares distributed pursuant to the Private Placement will be subject to a four-month plus one day hold period in accordance with applicable securities laws and stock exchange rules, until March 9, 2011. The terms of the Private Placement provide Coalcorp, in its sole discretion, a right to participate in any private placement of Gold Hawk common shares, or securities convertible into or exchangeable for common shares, initiated on or before October 22, 2011. The number of common shares, or securities convertible into or exchangeable for common shares, that Coalcorp is entitled to purchase pursuant to this right is limited to such number of common shares to allow Coalcorp to maintain its pro-rata portion of the total issued and outstanding common shares held by it immediately prior to the applicable financing.
Gold Hawk will pay a finder's fee to an arm's length party in the aggregate amount of $450,000, which represents an amount equal to six per cent (6%) of the gross proceeds raised from the Private Placement.
Source: Gold Hawk Resources Inc.