Spanish Mountain Announces Closing of $20 Million Financing
Spanish Mountain Gold Ltd. announce that it has closed its private placement offering (the “Offering”), previously announced on June 30, 2011.
Pursuant to the Offering, 33,333,328 units (the “Units”) have been placed at a price of $0.60 per unit for total gross proceeds of approximately CAD$20,000,000. Due to stronger than expected investor demand, the size of the Offering was increased by 8,333,328 Units for additional proceeds of $5,000,000. Each Unit consisted of one common share and one-half of one share purchase warrant (“Warrant”), with each whole Warrant entitling the holder to acquire an additional common share of the Company at a price of $0.70 per share for a period of two years.
Certain directors and officers of the Company including Mr. Ian Watson, the Chairman of the Board of Directors, have acquired an aggregate of 5.8 million Units for $3,480,000.
The proceeds from the Offering will be used to advance the development of the Company’s Spanish Mountain gold project and for general corporate purposes. The Company plans to commence drilling of the gold in soil geochemical anomaly in the Cedar Creek area later this week. The centre of this area is located approximately 2.5 km west of the Main Zone of gold mineralization.
The Company is paying finders’ fees of $416,000 in connection with the Offering. All of the securities issued under the Offering are subject to hold period which will expire on November 12, 2011 in accordance with applicable Canadian securities laws.
Brian Groves, CEO, comments: “We are very encouraged by investors’ interest in this Offering. As a result of the financing and taking into account the well in-the-money warrants expiring next year, we will have sufficient funds in place to complete the preliminary and definitive feasibility studies for the Spanish Mountain gold project, as well as to drill our various exploration targets on the property. I look forward to reporting on our progress.”