Dec 4 2010
Estrella Gold Corporation (TSX VENTURE:EST) has announced it has closed a non-brokered private placement offering of 2,000,000 units at $0.50 per Unit for gross proceeds of $1,000,000.
Each Unit is comprised of one common share (each a "Common Share") and one non-transferable warrant (each a "Warrant"). Each Warrant entitles the holder to purchase one Common Share at an exercise price of $0.80 per share until December 3, 2012. The Warrants are callable, at the option of Estrella, after April 4, 2011 if its Common Shares trade at or over $1.00 per share for 20 consecutive trading days. The number of Common Shares issuable pursuant to the Financing, if all Warrants are exercised, is 4,000,000 Common Shares for gross proceeds of $2,600,000.
In connection with the Financing, the Company paid eligible finders (the "Finders") a cash fee equal to 6% of the gross proceeds placed through each Finder under the Financing and also issued compensation warrants equal to 10% of the total number of Units (the "Compensation Warrants"), issued through each Finder, under the Financing. Each Compensation Warrant entitles the holder to acquire one Common Share of Estrella at $0.60 until December 3, 2012. On closing, the Company paid $45,600 and issued 152,000 Compensation Warrants to the Finders.
The securities issued pursuant to the Financing will all be subject to a four-month regulatory hold period from the date of closing. With the closing of this Financing, Estrella has 16,006,845 common shares issued and outstanding.
The net proceeds of the Financing will be used for:
- Regional Andean Gold Exploration (RAGE) program; and
- working capital and general corporate purposes.
Source: Estrella Gold Corporation