VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/12/13 -- Rapier Gold Inc. (TSX VENTURE: RPR) (the "Company") is pleased to announce listing on the TSXV and the closing of the share purchase agreement with two subsidiaries of Rio Tinto plc, which control rights to all non-talc minerals on mineral claims, referred to as the Pen Gold North Project. The Pen Gold North Project is approximately 5,600 hectares in area and some of the claims are held through a lease and sublease with IMERYS, and consolidates a total area of 16,448 hectares, (approximately 160 sq km) located 75 km south west of Timmins, Ontario, on the western extension of the Porcupine-Destor Deformation (Fault) Zone, one of the most productive gold structures in the world, which has produced over 70 million ounces of gold.
Rapier has also completed three other significant transactions;
-- Executed the License and Option Agreement with Rogue Iron Corp. to explore for gold on the Pen Gold South property, which totals approximately 10,848 hectares, with an option to purchase those claims should certain conditions be met. These claims are part of a contiguous block with the Pen Gold North claims.-- Closed two private placement financings raising an aggregate of $1,153,245.-- Closed a third private placement with AuRico Gold Inc. ("AuRico") (www.auricogold.com) for an additional $1,410,000, which resulted in AuRico owning approximately 19.9% of Rapier (the "AuRico Private Placement").
On closing the AuRico Private Placement, AuRico acquired beneficial ownership of 4,700,000 units (each, a "Unit") of the Company, at a price of $0.30 per Unit, for aggregate consideration to the Company of $1,410,000. Each Unit was comprised of one common share in the capital of the Company (each, a "Common Share") and one half of one Common Share purchase warrant of the Company (each whole warrant, a "Warrant").
In connection with the closing of the AuRico private placement, the Company entered into an investor rights agreement with AuRico, which provides AuRico with certain rights, subject to the terms and conditions of the agreement, including the right to: (i) participate pro rata in subsequent equity offerings by the Company to maintain its shareholdings; (ii) a right of first refusal on the transfer by the Company of its interest in the Pen Gold Project; (iii) certain standstill restrictions; (iv) certain exclusivity rights in favour of AuRico with respect to transactions involving the Company and the Pen Gold Project; and (v) appoint one member to the Company's technical committee.
Prior to the completion of the private placement, AuRico did not beneficially own or exercise control or direction over any securities of the Company. Following completion of the private placement, AuRico beneficially owns 4,700,000 Common Shares and 2,350,000 Warrants. This represents approximately 19.9% of the issued and outstanding Common Shares of the Company on an undiluted basis, or approximately 27.2% on a partially diluted basis, assuming full exercise of the 2,350,000 Warrants, and that no other party exercises warrants or options. The private placement was a private transaction outside of any market or other facility and the Units acquired by AuRico were acquired for investment purposes. Subject to the standstill provision in the investor rights agreement between AuRico and the Company, AuRico may, in the future, increase or decrease its ownership of securities in the Company, from time to time depending upon the business and prospects of the Company and future market conditions.