2007-02-14 18:13 ET - News Release / Canada
Mr. Tom Meredith reports
VEDRON COMPLETES FINANCING OF $5.5 MILLION TO FUND DEEP DRILLING PROGRAM ON TIMMINS GOLD PROJECTS
Vedron Gold Inc. has closed its previously announced brokered private placement financing. The overallotment option was exercised and the company realized gross proceeds of $5.5-million.
The private placement offering of 13.75 million units consisted of 8.7 million flow-through units and 5.05 million of hard-dollar units. Each flow-through unit was issued at a price of 40 cents and comprises one flow-through common share and one-half of one common share purchase warrant (each whole common share purchase warrant a tranche A warrant). Each hard-dollar unit was issued at a price of 40 cents and comprises one common share and one common share purchase warrant (a tranche B warrant). Each tranche A warrant and tranche B warrant entitles the holder to purchase one additional common share in the capital of Vedron, which will not be a flow-through share, at a price of 60 cents until Aug. 13, 2008. If after June 14, 2008, the common shares of Vedron close at 90 cents or more for 20 consecutive trading days, then the warrant term shall be automatically reduced to 30 days from the date that Vedron provides the holders of warrants with written notice of the new expiry date and issues a news release announcing the change to the warrant term.
Vedron engaged Primary Capital Inc. to act as agent in the offering. Vedron paid Primary a cash commission equal to 5 per cent of the gross proceeds of the offering. In addition, Vedron granted primary broker warrants to acquire 962,500 hard-dollar units. Each broker warrant is exercisable at 40 cents until Aug. 13, 2008, subject to the company's right to accelerate the expiry date as described above.
The securities issued in the private placement are subject to a hold period expiring June 14, 2007.
The proceeds raised from the issuance of the hard-dollar units will be used for general working capital purposes. The proceeds raised from the issuance of the flow-through units will be used for the continued exploration of Vedron's Timmins projects.
Vedron is also pleased to announce that John Tait was appointed chief operating officer of the corporation on completion of the offering. Mr. Tait will also be joining the board of directors of Vedron. Mr. Tait was previously president of Southern Star Resources, where he led its successful exploration program up to the recent merger that formed Gold Eagle Mines Ltd.
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