Greenshoe partially exercised in brokered deal via Cormark Securities
By Devika Patel and Stephanie N. Rotondo
Knoxville, Tenn., Aug. 31 - Edgewater Exploration Ltd. said it has completed a C$10.41 million private placement of subscription receipts. The deal priced for C$10 million with a C$5 million greenshoe Aug. 9 and was amended on Aug. 12. It was conducted via lead agent Cormark Securities Inc.
The company sold 10,413,000 receipts at C$1.00 apiece on a best-efforts basis. Of the receipts, 413,000 were part of the partially exercised greenshoe.
The price per receipt reflects a 15.25% discount over the Aug. 6 closing share price of C$1.18.
Each receipt will convert into units of one common share and a half-share warrant, with each whole warrant exercisable at C$1.40 for three years. The strike price represents an 18.64% premium over the Aug. 6 closing share price.
Originally, the company intended to sell 9,090,900 receipts at C$1.10 apiece. Each receipt was to convert into one common share.
According to Ryan King, a vice president of Edgewater, the deal was oversubscribed, so it went well.
"It all comes down to the people on the project, I think," he said. "To be able to bring a financing in August and have it close in the same month is pretty strong."
King said the proceeds would be used for the acquisition of Rio Narcea Gold Mines S.L. from Lundin Mining Corp. and for drilling on the new property, as well as a property in Ghana.
King said the new Spanish property will cost C$8 million over the course of 12 months. Once the financing receives stock exchange approval, Edgewater will put C$1 million down and then pay another C$7 million over the next year.
Additionally, Edgewater intends to spend C$1.5 million to C$2 million on both the Spanish and Ghanan properties for " a first round and possibly a second round" of drilling.
Though Edgewater has no near-term plans to come back to the market for more money, King said the company probably will be coming back in the second or third quarter of 2011.
"As we develop our assets, it's always a possibility that we will have to come back to the market," he said.
Based in Vancouver, B.C., Edgewater owns mineral exploration properties.
| Issuer: | Edgewater Exploration Ltd.
|
| Issue: | Subscription receipts
|
| Amount: | C$10,413,000 (including C$413,000 greenshoe)
|
| Receipts: | 10,413,000
|
| Price: | C$1.00
|
| Warrants: | One half-share warrant per unit upon conversion
|
| Warrant expiration: | Three years
|
| Warrant strike price: | $1.40
|
| Agent: | Cormark Securities Inc.
|
| Pricing date: | Aug. 9
|
| Amended: | Aug. 12
|
| Settlement date: | Aug. 31
|
| Stock symbol: | TSX Venture: EDW
|
| Stock price: | C$1.18 at close Aug. 6
|
| Market capitalization: | C$19.72 million
|
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