The Public Preferred Shares will be redeemable by the Company at its option, following the date that is the later of five years from the closing date of the issuance of the Public Preferred Shares and the date on which total cumulative gold production from Banro's existing properties (measured from the closing date of the issuance of the Public Preferred Shares (the "Closing Date")) reaches 800,000 ounces (the "Production Threshold"), by paying an amount per share equal to the Redemption Price plus a 2% premium.
Following the fifth anniversary of the Closing Date, and for so long as the Production Threshold has not been met, a holder of the Public Preferred Shares will have the option to require the Company to redeem any or all of the holder's Public Preferred Shares, for an amount per share equal to the Redemption Price. Holders of the Public Preferred Shares will also have the right to require the Company to redeem the Public Preferred Shares in the event of certain asset seizure events and change of control events, subject to certain conditions.
The Preferred Share Offering and the Common Share Offering are being managed by a syndicate of agents (the "Agents") on a best efforts basis.
The Company will grant an option to the Agents to offer for sale up to that number of additional Common Shares as is equal to 7.5% of the Common Shares issued pursuant to the Common Share Offering, exercisable in whole or in part any time until the date that is 30 days after the Closing Date.
The Preliminary Short Form Prospectus is still subject to completion or amendment. A copy of the Preliminary Short Form Prospectus will be available from Donat Madilo, Chief Financial Officer, at the Company's offices located at 1 First Canadian Place, 100 King St. West, Suite 7070, Toronto, Ontario and electronically at www.sedar.com. There will not be any sale of or any acceptance of an offer to buy the securities until a receipt for the (final) prospectus has been issued. The information contained within this press release is a summary only of the information contained within the Preliminary Short Form Prospectus; full details are to be found in the Preliminary Short Form Prospectus.
Use of Proceeds
The net proceeds of the Preferred Share Private Placement, the Preferred Share Offering and the Common Share Offering are expected to be used for development costs of the Company's Namoya Project and for administrative and general expenses and working capital of the Company. The principal business objective that the Company intends to accomplish using these net proceeds is to complete construction of the mine at the Company's Namoya Project, although this objective is subject to the risks and uncertainties described below under "Forward-Looking Statements".
This press release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the preferred shares or the common shares in any jurisdiction in which such offer, solicitation or sale would be unlawful. The preferred shares and the common shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or the securities laws of any state of the United States and may not be offered or sold within the United States (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.
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