Freegold plans $1.5-million debt and equity financing
2006-11-01 14:15 ET - News Release
Mr. Steve Manz reports
FREEGOLD TO RAISE $1.5 MILLION IN DEBT AND EQUITY FINANCING
Freegold Ventures Ltd. has arranged $1.5-million in debt and equity financing that will be used to finance continuing resource expansion drilling and metallurgical testing at its Almaden gold project in Idaho, continuing bulk sampling at its Golden Summit project in Alaska, and for general working capital purposes.
The $1-million debt financing will have a term of one year, an interest rate of 8 per cent and will be secured by the gold contained within the stockpile of bulk-sampled vein material currently being collected from high-grade surface veins at the company's Golden Summit project in Alaska. The lenders will have the option to accelerate the repayment of the loan upon Freegold obtaining subsequent equity financing in excess of $2-million, and Freegold agrees to apply net proceeds from the processing and sale of gold contained within the stockpiles in the spring of next year against any unpaid loan balances. As consideration for the loan, the lenders will receive 250,000 non-transferable warrants that will entitle the holders to purchase common shares of Freegold at a price of 55 cents per share during the 12-month period following the date of issuance of the warrants, and at a price of 65 cents per share during the subsequent 12-month period.
In addition, Freegold announced a non-brokered private placement of up to 1,111,111 units at a purchase price of 45 cents per unit, for gross proceeds of up to $500,000. Each unit will consist of one common share of Freegold and one-half of one non-transferable common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share at a price of 55 cents per share during the 12-month period following the date of issuance of the warrants and at a price of 65 cents per share during the subsequent 12-month period.
No finders' fees or commissions will be paid on either transaction. The foregoing is subject to regulatory approval.
We seek Safe Harbor.
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