TORONTO, ONTARIO -- (Marketwired) -- 04/08/13 -- Olivut Resources Ltd. ("Olivut" or the "Company") (TSX VENTURE: OLV) announces that it has closed its previously announced private placement of a $300,000 callable, convertible security pursuant to the terms of the Securities Purchase Agreement (the "Agreement") dated March 12, 2013 to raise up to $18 million over approximately the next 36 months in a tranched placement of securities to the Canadian Special Opportunity Fund, L.P., a fund managed by The Lind Partners, a New York-based asset management firm (together "Lind") focused on junior natural resource companies.
As previously announced, the convertible security may be converted into 689,655 units (each a "Unit"). The first 500,000 Units issued shall be comprised of one common share and one warrant (the warrant entitling the holder to purchase one common share, as further described below) and the remaining Units issued shall be exercisable for one common share. The convertible security is repayable March 31, 2016 carries a 0% interest rate and is unsecured and subordinated. The holder has the right to call the security at any time commencing upon the earlier of (i) September 12, 2013 or (ii) the date on which the Company terminates the Agreement. The convertible security may be converted into Units any time. The 500,000 warrants that may be issued on conversion entitle the holder to purchase common shares at $0.5957 per share until March 31, 2016; half vested on March 13, 2013 and half vest upon the earlier of March 13, 2014 or immediately upon termination of the Agreement by the Company.
The convertible security, and any common shares or warrants of Olivut issuable upon conversion of the convertible security or upon the exercise of any warrants issued thereunder are subject to resale restrictions pursuant to applicable securities laws requirements and will not be freely tradable until July 14, 2013.
Subject to the terms and conditions of the Agreement, Lind invested $500,000 on March 13, 2013 and may invest $200,000 every month (approximately) over the following 35 months. Tranches may be increased to a maximum of $500,000 upon mutual agreement between Olivut and Lind and may be less than $200,000 after the first tranche if any single tranche exceeds 0.55% of the Company's market capitalization. The initial investment of $500,000 consisted of (i) the $300,000 callable, convertible security discussed above and (ii) $200,000 to purchase common shares, expected to be issued on April 9, 2013. The number of common shares to be issued in a tranche will be calculated based on a price per common share equal to 92.5% of the Daily Volume Weighted Average Price ("VWAP") per common share on the TSXV for the 5 days chosen by Lind out of the 20 trading days preceding such issuance date and provided such price will not be less than the higher of (i) the closing price per Common Share or (ii) the volume-weighted average price per Common Share, on the TSXV on the trading day immediately preceding the relevant cash advance date, in either case, less the maximum permitted discount under TSXV regulations.
As part of the financing, Lind received a commitment fee of $200,000 payable in 505,944 common shares calculated at $0.3953 per share. These commitment fee shares are qualified by the short form base shelf prospectus of the Company dated March 11, 2013, as supplemented by the prospectus supplement dated March 12, 2013, both of which are available on SEDAR. Copies of the base prospectus and the prospectus supplement, as well as any documents incorporated therein by reference may be obtained on request without charge from the President and Chief Executive Officer of Olivut, at its offices located at 27010 Highway 16, 14 Mountain Park Properties, Jasper East, Alberta, or by faxing a written request to (780) 866-3713, by mail to P.O. Box 6690 Hinton, Alberta T7V 1X8 or by accessing the disclosure documents available through the internet on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com.
Olivut intends to use the proceeds to supplement its current cash position of approximately $1.5 million, to continue Olivut's exploration programs and for working capital purposes.
Geophysical analysis is ongoing for the HOAM project on the very large, regional airborne magnetic survey database with the intent of prioritizing additional anomalies for follow-up with detailed airborne geophysical surveys and drilling. Planning is also underway to for a detailed sampling program in Paraguay to be undertaken in the near term. The intent of the sampling is to pinpoint possible source locations for the diamonds previously recovered in several stream drainages.
Olivut is a diamond exploration company with a 100% mineral interest in over 142,000 acres in the HOAM Project in Canada's Northwest Territories and an agreement with Latin American Minerals Inc. and certain of its Paraguayan subsidiaries to explore the Itapoty Diamond Project located in central Paraguay, South America. Please visit www.olivut.com for detailed corporate and project information.
This press release contains forward-looking statements with respect to the Company, and matters concerning the raising of additional capital, the business, operations, strategy, and financial performance of the Company. Actual results may differ materially from those indicated by such statements. These statements generally, but not always, can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. All statements, other than statements of historical fact, included herein, including, without limitations statements regarding future production, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the estimates and projections regarding the Company's properties are realized. Forward-looking statements are based on a number of assumptions which may prove to be incorrect. Unless otherwise stated, all forward looking statements speak only as of the date of this press release and the Company does not undertake any obligation to update such statements except as required by law.
Paul Pitman, a Qualified Person as defined by National Instrument 43-101, has reviewed the contents of this press release that relate to the proposed exploration programs.
Leni Keough, P.Geo., President and Chief Executive Officer
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Olivut Resources Ltd.
President and Chief Executive Officer
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