Castle Peak Announces Amended Terms For Non-Brokered Private Placement And Increases Size Of Offering
THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES
Vancouver, B.C., July 24, 2012 -- Castle Peak Mining Ltd. ("Castle Peak" or the "Company", TSX.V: CAP) announces that the terms of the private placement previously announced on July 4, 2012 have been amended by the Company. The offering (the "Offering") will now consist of up to 14,705,881 units ("Units") at a price of $0.17 per Unit to raise gross proceeds of up to $2.5 million.
Each Unit will consist of one common share of the Company and one share purchase Warrant, where each Warrant will allow the subscriber to purchase one additional common share of the Company at an exercise price of $0.25 per share for a period of 24 months from the date of closing, subject to adjustment/acceleration under certain circumstances.
The securities issued upon the closing of the Offering will be subject to customary securities legislation hold periods. In addition, the subscription agreements contain lock-up provisions such that the securities issued upon closing of the Offering cannot be traded prior to the date that is six months after closing of the Offering. The Offering is subject to receipt of all necessary approvals including the acceptance of the TSX Venture Exchange ("TSXV"). The Offering is anticipated to close on or before August 3, 2012.
Grizal Enterprises Ltd. ("Grizal"), a "control person" of the Company (as that term is defined in the TSXV policies), has expressed its intention to subscribe for up to 5,882,353 Units of the Offering for gross proceeds of $1 million (the "Grizal Units"), which constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 and TSXV Policy 5.9 (together, the "Policies"). In the event that Grizal subscribes for all 5,882,353 Grizal Units under the Offering and the Company issues all of the Units under the non-brokered private placement, Grizal will hold a total of 17,882,353 common shares (undiluted) representing 23.5% of the issued and outstanding common shares of the Company.
Candel and Partners SAS ("Candel", and together with Grizal, the "Insiders"), a company wholly-owned by Allan Green, a director of the Company, has subscribed for 5,882,353 Units of the Offering for gross proceeds of $1 million (the "Candel Units"), which constitutes a "related party transaction" within the meaning of the Policies. In the event that the Company issues all of the Units under the non-brokered private placement, Mr. Green will hold, directly and indirectly, a total of 7,436,353 common shares (undiluted) representing 9.8% of the issued and outstanding common shares of the Company.
A third investor has subscribed for the remaining 2,941,175 Units under the Offering for gross proceeds of $500,000. The Company proposes to pay finder's fees of $35,000, representing 7% of the gross proceeds of this subscription.
The Offering was approved by a majority of the independent directors of the Company as being in the best interests of the Company, and the Board has determined exemptions from the formal valuation and minority approval requirements under the Policies are available. Mr. Green abstained from voting due to his interest in the Offering.
Neither the Company, nor to the knowledge of the Company after reasonable inquiry, the Insiders, have knowledge of any material information concerning the issuer or its securities, that has not been generally disclosed.
Proceeds from the Offering will be used to fund the ongoing exploration program at Castle Peak's Akorade project in Ghana, as well as, working capital.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States, or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdictions in which such offer, solicitation or sale would be unlawful. Any offering made will be pursuant to available prospectus and registration exemptions and restricted persons to whom the securities may be sold in accordance with the laws of such jurisdictions and by persons permitted to sell the securities in accordance with the laws of such jurisdictions.
About Castle Peak
Castle Peak Mining Ltd. is a Canadian-based exploration and development company focused on advancing greenfields and early stage gold projects. The Company holds a strategic land package in the Ashanti belt adjacent to several producing gold mines in Ghana, West Africa. The Ashanti belt is known as one of the most prolific gold belts in the world with over 150 million proven ounces uncovered and current investment in excess of $3.3 B USD.
On behalf of the Board of Castle Peak Mining Ltd.:
President and Chief Executive Officer
Except for statements of historical fact, this news release contains certain 'forward-looking information' and 'forward-looking statements' within the meaning of applicable securities laws including statements regarding the proposed Offering, the anticipated subscriptions, the proposed use of proceeds and the anticipated timing of the closing of the Offering. Such forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to vary materially from the anticipated results or events predicted in these forward-looking statements, including those risk factors identified in the Company's Filing Statement filed under the Company's SEDAR profile. As a result, readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements contained in this news release are made as of the date of this release. Except as required by applicable law, Castle Peak disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.