By Devika Patel
Knoxville, Tenn., Feb. 15 - Firstgold Corp. said it has arranged two private placements for up to $14 million. The company will sell between $5 million and $8 million of secured convertible debentures. It also said it will conduct a private placement of units with D&D Securities Co. for $6 million.
The debentures will be issued in two tranches of $5 million and $3 million and are convertible into common shares at $0.80 per share. They carry an 11% coupon.
The second tranche of the debentures is subject to the company delivering an engineering report on the Relief Canyon project.
Investors also will receive five-year warrants. If the full $8 million in notes are issued, Firstgold will issue the following warrants. Otherwise, the warrants will be reduced on a pro rata basis to reflect the lower amount funded.
Warrant A is exercisable for $900,000 in common stock at $1.00 per share. Warrant B is exercisable for $2.4 million in common stock at $1.25 per share. Warrant C is exercisable for $2.4 million in common stock at $1.50 per share.
The units will be sold at $0.65 apiece. Each unit consists of one common share and one half-share warrant, with each whole warrant exercisable at $0.80 for 18 months.
Settlement of the first tranche is expected on Feb. 22.
Proceeds will be used to finance activities at Firstgold's Relief Canyon Mine project, for exploration activities at its leased properties and for general corporate purposes.
Firstgold is a mining company based in Cameron Park, Calif.
| Issuer: | Firstgold Corp.
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| Issue: | Secured convertible debentures, units of one share and one half-share warrant
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| Pricing date: | Feb. 15
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| Stock symbol: | OTCBB: FGOC
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| Stock price: | $0.66 at close Feb. 15
|
|
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| Convertible debentures
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| Amount: | $5 million (minimum), $8 million (maximum)
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| Coupon: | 11%
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| Price: | Par
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| Conversion price: | $0.80
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| Warrants: | For $5.7 million in common stock
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| Warrant expiration: | Five years
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| Warrant strike price: | $1.00 (for $900,000 in shares), $1.25 (for $2.4 million in shares), $1.50 (for $2.4 million in shares)
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|
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| Units
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| Amount: | $6 million
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| Price: | $0.65
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| Warrants: | One half-share warrant per unit
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| Warrant expiration: | 18 months
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| Warrant strike price: | $0.80
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| Agent: | D&D Securities Co.
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