Deal to finance acquisitions, targeted drilling, exploration in Mexico
By Devika Patel and Stephanie N. Rotondo
Knoxville, Tenn., Feb. 4 - Riverside Resources Inc. said it plans a private placement of units. The deal will raise C$5.04 million.
The company will sell 5.3 million units at C$0.95 apiece. Each unit consists of one common share and one warrant.
Each two-year warrant is exercisable at C$1.40 in the first year and at C$1.60 in the second. The strike prices are 41.41% and 61.62% premiums to the Feb. 3 closing share price of C$0.99.
"Typically, we don't need to raise a lot of funds," Joness Lang, corporate communications, told Prospect News. However, the company's planned targeted drill program for 2011 will likely result in an increase in cash burn, he said, "so this will help cover that targeted drill project and also an acquisition in Mexico."
Lang said dilution was not a big concern, as the company has issued less than 25 million shares in about four years.
"Dilution has been something our company has not been exposed to," he said, opining that investors will instead see the value the deal can add to the company.
Lang also said the deal is expected to close "in the back half of February."
Proceeds will be used for property acquisitions, targeted drilling and exploration in Mexico and general working capital.
Based in Vancouver, B.C., Riverside is a gold mining company.
| Issuer: | Riverside Resources Inc.
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| Issue: | Units of one common share and one warrant
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| Amount: | C$5,035,000
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| Units: | 5.3 million
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| Price: | C$0.95
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| Warrants: | One warrant per unit
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| Warrant expiration: | Two years
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| Warrant strike prices: | C$1.40 in the first year, C$1.60 in the second
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| Pricing date: | Feb. 4
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| Stock symbol: | TSX Venture: RRI
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| Stock price: | C$0.99 at close Feb. 3
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| Market capitalization: | C$24.75 million
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