Proceeds slated for buyout of Big Sky interests, fund development
By Susanna Moon
Chicago, Aug. 23 - Fox Resources Ltd. said it will complete an C$8.5 million non-brokered private placement of subscription receipts in conjunction with the acquisition of a 100% interest in Big Sky Operating LLC.
The price is C$0.35 per subscription receipt for a minimum total price of C$8.5 million.
Fox will issue 27 million shares to the members of Big Sky and 1.35 million common shares to the lenders of Big Sky.
Each subscription receipt will be deemed exchanged when release conditions are met, without payment of any additional payment, for one common share of Fox and one common share purchase warrant.
Each warrant will be exercisable for two years from the date of issuance of the subscription receipts at C$0.66 for the first year and C$0.80 for the second. The strike prices are a respective 50% and 81.82% discount to the last reported closing price of C$0.44 on July 21.
Proceeds will be used to fund the development of Big Sky's property interests, retire a C$4 million debt of Big Sky as well as provide the required working capital to Big Sky to fund the oil exploration in Montana through 2011 and 2012.
Big Sky, a Montana limited liability company, is the legal and beneficial owner of certain oil and gas interests comprising about 100,000 net acres in Toole and Glacier counties, Montana, of which Big Sky has a 33.3% working interest. Big Sky is focused primarily on the exploration and development of oil and gas in the Alberta Basin, commonly referred to as the Bakken source system.
The release conditions include the satisfaction of all of the conditions to the acquisition and TSX Venture Exchange's conditional approval of the acquisition and the financing. If the conditions have not been met by Nov. 30, any escrowed funds plus interest will be returned pro rata to each holder of the subscription receipts.
Fox Resources is an exploration-stage company based in Vancouver, B.C.
| Issuer: | Fox Resources Ltd.
|
| Issue: | Subscription receipts exchangeable for one share and one warrant
|
| Amount: | C$8.5 million
|
| Price: | C$0.35
|
| Warrants: | One per receipt
|
| Warrant price: | C$0.66 for first year and C$0.80 for second
|
| Warrant expiration: | Two years
|
| Agent: | Non-brokered
|
| Pricing date: | Aug. 23
|
| Stock symbol: | Canada: FAX
|
| Stock price: | C$0.44 at close July 21 (last close)
|
| Market capitalization: | C$2.4 million
|
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