Advanced Explorations closes $11-million financings
2007-06-07 01:16 ET - News Release
Mr. John Gingerich reports
ADVANCED EXPLORATIONS INC. ANNOUNCES CLOSE OF $11 MILLION FINANCING AND ROCHE BAY OPTION AGREEMENT
Advanced Explorations Inc. has completed the private placement previously announced in Stockwatch on March 30, 2007. D&D Securities Company and Octagon Capital Corp. sold a total of 1,774,000 units at a price of $1.25 per unit and 613,000 flow-through shares for gross proceeds of $3,137,000. Each unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant will be exercisable into one common share for two years from the closing date at an exercise price of $2.
Concurrent with the offering, the company also completed a non-brokered private placement of 5,963,000 units and 333,333 flow-through shares for gross proceeds of $7,953,750 (concurrent offering).
AEI is pleased to announce a non-brokered private placement of $500,000 through the sale of 333,333 flow-through shares to the MineralFields Group as part of the concurrent offering.
"We are very pleased to be entering into this relationship with MineralFields Group," said John Gingerich, president and chief executive officer. "This is an important milestone in the growth of Advanced Explorations and we look forward to working with MineralFields Group as we develop our company."
The company paid a total cash commission of $250,960 in connection with offering to the agents. In addition, as a commission for the sale of the units under the offering, the agents were granted compensation options which will entitle the agents to purchase 141,920 common shares of the company at an exercise price of $1.25 per common share. As a commission for the sale of the flow-through shares under the offering, the agents were granted compensation options which will entitle the agents to purchase 49,040 common shares of the company at an exercise price of $1.50 per common share. All compensation options granted to the agents will have an exercise period which expires two years from the closing date.
In connection with the concurrent offering, the company paid a cash commission of $298,150 to Parolini Marketing Services Ltd. In addition, the company paid Limited Market Dealer Inc. a cash commission of $28,500 and compensation warrants which will entitle Limited Market Dealer to purchase 13,333 common shares of the company, at an exercise price of $1.25 per common share and have an exercise period which expires two years from the closing date.
For providing advisory and due diligence services to the company in connection with the concurrent offering, D&D received a payment of $111,500. In addition, D&D was granted compensation options which will entitle the agents to purchase 475,000 common shares of the company at an exercise price of $1.25 per common share and 13,334 common shares of the company at an exercise price of $1.50 per common shares. All of the compensation options will have an exercise period which expires two years from the closing date.
Proceeds of the private placement will be used toward financing exploration on the company's magnetite project in Nunavut and other obligations of the company under the option agreement it entered into with Roche Bay PLC to acquire up to 50.1 per cent in the project which was previously announced in Stockwatch on Feb. 12, 2007. The closing of the option agreement is concurrent with the closing date.
Pursuant to the option agreement, on the closing date the company issued 12 million rights to Roche Bay as follows:
Eight million rights at an exercise price of 35 cents per right, effective immediately upon issue; Two million rights at an exercise price of 60 cents per right, effective upon completion of 15,000 metres of drilling; and Two million rights at an exercise price of $1 per right, effective upon the completion of both a total of 30,000 metres of drilling and a National Instrument 43-101-compliant prefeasibility study based on an envisioned minimum six-million-tonne-per-year mining operation containing a resource estimate of at least 750 million tonnes on iron ore in total among the "measured" and "indicated" categories. Each right will entitle the holder to purchase one common share of the issuer within a period of three years after the effective date of the right.
The company paid finders' fees in connection with the option agreement to the following arm's-length parties:
48,206 common shares issued to 834689 Ontario Ltd.; and 96,413 common shares issued to John Moses.
In consideration of entering into certain non-recourse loans agreements with the company, the company issued a total of 420,591 common shares as bonus shares to certain lenders. The following insider is one of the lenders receiving the following amount of bonus shares: John Gingerich, 160,000 (via Geotechnical Business Solutions Inc.) and 64,000 (via Gingerich Family Trust).
On the closing date, the company issued 294,763 common shares to 2053068 Ontario Ltd. to settle outstanding debt for $368,454.14.
All securities issued pursuant to this transaction and are subject to a hold period expiring Oct. 5, 2007.
We seek Safe Harbor.
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