Hawthorn Gold Private Placement
Hawthorne Gold Corp. (TSX-V: HGC) reports that it has arranged for a non-brokered private placement with China Mineral Holdings Limited, a company incorporated pursuant to the laws of the British Virgin Islands, of up 20,254,078 special warrants at a price of $0.29 per Special Warrant, for total gross proceeds of up to $5,873,683 (the "Offering").
Each Special Warrant will entitle the Subscriber to receive, upon the exercise thereof, and without payment of additional consideration, a unit (a "Unit") consisting of one common share of the Company (a "Share") and one half of one transferable common share purchase warrant (a "Warrant"). Each whole Warrant will entitle the Subscriber to purchase, upon exercise thereof, one common share of the Company (a "Warrant Share") at a price of $0.39 per Warrant Share, for a period of 18 months from closing of the Offering.
Each Special Warrant is exercisable into a Unit for a period of six months from closing of the Offering (the "Redemption Date"). If the Subscriber does not elect to exercise all or a portion of the Special Warrants into Units on or before the end of the Redemption Date, the Special Warrants will be deemed to have been exercised by Subscriber and automatically converted by the Company into Units without further action by the Subscriber or payment of additional consideration.
Pursuant to the terms of the Offering, the Company is required to allocate up to $3,800,000 of the subscription proceeds from the Special Warrants for strategic initiatives approved by the Company's Board of Directors. Failing to enter into certain approved strategic initiatives will require the Company to issue to the Subscriber, without payment of additional consideration, common shares of the Company equal to 10% of the number of Special Warrants held by the Subscriber on such date.
In connection with the Offering, the Subscriber will be permitted to appoint two directors to the Company's Board of Directors and one member to the Company's executive committee.
The Company expects to form the Executive Committee promptly following completion of the Offering and such committee is expected to consist of three members which will advise the Company's Board of Directors with respect to Hawthorne's strategic direction. Such appointments are subject to (i) the approval of the Company, acting reasonably and (ii) the approval of applicable regulatory approval including the TSX Venture Exchange (the "TSX-V").
The Offering is expected to result in the Subscriber holding not more than 19.9% of the Company's current issued and outstanding share capital. It is a term of the Special Warrants (and the securities underlying the Special Warrants), that the Subscriber will not be able to exercise the same to acquire direction or control over that number of voting securities of the Company which is equal to 20% of more of the voting securities of the Company.
At closing of the Offering, Hawthorne expects to pay certain finders a commission in cash and or common shares of the Company equal to 7.0% of the gross proceeds of the Special Warrants sold, and will issue 575,000 non-transferable warrants (the "Finder's Compensation Option Warrants"). Each Finder's Compensation Option will entitle the holder thereof to purchase one common share of the Company at a price of $0.50 per common share for a period of 12 months following the closing of the Offering.
Closing of the Offering is subject to a number of conditions, including the receipt of all necessary corporate and regulatory approvals, including the TSX-V. The securities to be issued under the Offering will be offered by way of applicable exemptions from prospectus and dealer registration requirements. The net proceeds from the Offering will be used to fund strategic corporate initiatives and for general corporate working capital. All securities issued in connection with the Offering will be subject to a statutory hold period of four months plus one day from the date of issuance in accordance with applicable securities legislation.
About Hawthorne Gold Corp.
Hawthorne Gold Corp. is a Canadian-based gold exploration and development company with key properties located in British Columbia, Canada. Hawthorne is led by well-respected mining leaders Richard Barclay and Michael Beley. Hawthorne’s goal is to become a junior gold producer by working towards production at Table Mountain and the continued resource development at the nearby Taurus deposit, as well as the Frasergold deposit in the Cariboo region of south central British Columbia.
Posted Feb. 04.10
