MONTREAL, QUEBEC -- (Marketwired) -- 07/18/13 -- David Patterson, Chairman of Donner Metals Ltd. ("Donner" or the "Company") (TSX VENTURE: DON)(FRANKFURT: D4M) is pleased to announce that the Company has completed a portion of its previously-announced brokered private placement for gross proceeds of C$2,787,010 to the Company (the "Offering"). The Offering was completed on a best-effort agency basis through Secutor Capital Management Corp. and Marquest Capital Markets (collectively, "the Agents").
Pursuant to the Offering, the Company issued a total of 35,100,000 units (the "Units") at a price of C$0.05 per Unit, for gross proceeds of $1,755,000 to the Company, and 17,200,166 "flow-through" units ("FT Units") at a price of C$0.06 per FT Unit, for gross proceeds of $1,032,009.96 to the Company. Each Unit consists of one common share in the capital of the Company (a "Common Share") and one common share purchase warrant (a "Warrant"). Each FT Unit consists of one Common Share designated as a "flow-through share" for purposes of the Income Tax Act (Canada) and one Warrant. Each Warrant entitles the holder thereof to acquire one Common Share at a price of C$0.10 until July 17, 2018. Should the closing price of the Company's Common Shares on the TSX Venture Exchange be equal to, or above C$0.15, on 20 consecutive tradings days, the term of the Warrants will be reduced to 30 days from the 20th day.
Pursuant to the terms of an agency agreement among the Company and the Agents, the Company elected to pay a portion of the commission to the Agents through the issuance of an aggregate of 3,813,814 Units and also granted to the Agents an aggregate of 4,707,015 compensation options. Each such option entitles the Agents to acquire one Common Share at a price of C$0.05 until July 17, 2016.
The Company further announces the participation of two significant subscribers in the private placement: Sandstorm Metals & Energy (Canada) Ltd. ("Sandstorm") and Marquest Capital Markets ("Marquest").
Sandstorm, whose subscription for 26,500,000 Units results in Sandstorm holding 40,360,330 Common Shares, or 12.94% of the currently outstanding Common Shares. Sandstorm was also issued 26,500,000 Warrants as part of the Units, the full exercise of which would result in Sandstorm holding 19.76% based on the Company's currently outstanding Common Shares. Sandstorm does not have any present intention to acquire additional ownership of, or control over, additional securities of Donner. It is the intention of Sandstorm to evaluate its investment in Donner on a continuing basis and such holdings may be increased or decreased in the future. The address of Sandstorm for the purposes of National Instrument 62-103 is 400 Burrard Street, Suite 1400, Vancouver, British Columbia V6C 3A6. A copy of Sandstorm's Early Warning Report is available on SEDAR at www.sedar.com.
Marquest, whose subscription for 8,000,000 Units and 8,333,333 FT Units together with 3,051,051 Units issued as commission results in Marquest holding 19,384,384 Common Shares, or 6.22% of the currently outstanding Common Shares. Marquest was also issued 19,384,384 Warrants as part of the Units and FT Units received and issued 3,765,612 compensation options, the full exercise of which would result in Marquest holding 12.70% based on the Company's currently outstanding Common Shares. Marquest does not have any present intention to acquire additional ownership of, or control over, additional securities of Donner. It is the intention of Marquest to evaluate its investment in Donner on a continuing basis and such holdings may be increased or decreased in the future. The address of Marquest for the purposes of National Instrument 62-103 is 161 Bay Street, Suite 4420, Toronto, Ontario M5J 2S1. A copy of Marquest's Early Warning Report is available on SEDAR at www.sedar.com.
In addition to the Offering, the Company has issued an additional 400,000 Units on a non-brokered private placement basis for gross proceeds of C$20,000 to the Company.
The securities of the Company issued in connection with the Offering are subject to a four-month hold period expiring November 18, 2013.
The net proceeds from the Units will be used by Donner to fund its share of the capital and operating expenditures at the Bracemac-McLeod Mine. The gross proceeds from the sale of the FT Units will be used by Donner to fund exploration and development expenditures which qualify as 100% Canadian Exploration Expense at its projects in Quebec.
The securities of the Company will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
This press release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.
ON BEHALF OF THE BOARD OF
DONNER METALS LTD
David Patterson, Chairman
Neither the TSX Venture Exchange nor it's regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Donner Metals Ltd.
Director of Corporate Communications
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