TORONTO, ONTARIO -- (Marketwired) -- 06/14/13 -- Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX: NI) today announced the terms of a rights offering to existing shareholders to raise gross proceeds of up to approximately $2.7 million (the "Offering").
"We believe it is important to give our existing shareholders the opportunity to participate in the future success of Victory Nickel on a non-dilutive basis," said Vice-Chairman and CEO Rene Galipeau. "This rights offering does just that, and will ensure that Victory Nickel remains financially strong and able to actively advance its projects during the current period of market uncertainty. With the pending entry into the frac sand business, Victory Nickel can expect to begin generating cash flow in the very near future."
The Company will be offering to eligible holders of its outstanding common shares (each, a "Common Share") of record as at the close of business on June 28, 2013 (the "Record Date") approximately 452 million rights (each, a "Right") to subscribe for up to approximately 113 million units of the Company (each, a "Unit") on the terms set forth in a rights offering circular (the "Circular") to be mailed by the Company to shareholders (and which will also be available on SEDAR). Each such holder will receive one Right for each Common Share held on the Record Date. Four Rights will entitle the holder to purchase one Unit at a price of $0.024. Each Unit is comprised of one Common Share and one Common Share purchase warrant (each, a "Warrant"). Each Warrant will entitle the holder to purchase one Common Share at a price of $0.035 during the 12 month period beginning at 9:00 a.m. (Toronto time) on July 31, 2014 and ending at 4:00 p.m. (Toronto time) on July 31, 2015. The Rights will expire at 4:00 p.m. (Toronto time) on July 30, 2013, 2013. Shareholders who exercise all of their Rights will also be entitled to acquire additional shares pursuant to an additional subscription privilege to be provided for under the Offering, the terms of which are described in the Circular.
Pursuant to a previously announced (March 26, 2013) amended and restated loan agreement (the "Loan Agreement") between the Company and Nuinsco Resources Limited ("Nuinsco"), Nuinsco has provided the Company with a secured credit facility (the "Facility"). The terms of the Facility provide that in the event that the Offering is not fully subscribed, Nuinsco will, at the request of the Company, subscribe under the Offering for Units having a total subscription price of up to $1,000,000, subject to an increase to up to $1,500,000 as described in the Loan Agreement (which has been filed on the Corporation's profile on SEDAR at www.sedar.com) and as will be further described in the Circular (the "Standby Commitment").
The Rights will be listed on the Toronto Stock Exchange (the "TSX") under the trading symbol "NI.RT" on June 26, 2013, and the Common Shares underlying the Units will begin trading on an ex-rights basis on that date. The TSX has also approved the listing of the Common Shares issuable upon exercise of the Warrants.
The offer of securities is made in each of the provinces and territories of Canada and those jurisdictions where it is lawful to do so, including the Bahamas, the Cayman Islands and the United Kingdom (for further information please refer to the section in the Circular entitled "Ineligible Shareholders").
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