Acquistion and Private Placement
Orosur Mining Inc.
THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR NEW ZEALAND OR ANY JURISDICTION IN WHICH SUCH PUBLICATION RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL
Orosur Mining Inc Announces
Acquisition of Chilean Gold Property and Placing of up to US$15 million
SANTIAGO, Chile 9 June, 2011. Orosur Mining Inc. (“OMI†or “the Companyâ€) (TSX-V:OMI) (AIM:OMI), a South American-focused gold producer and explorer, announces that is has entered into an agreement, through its wholly-owned subsidiary, Fortune Valley Resources Chile S.A., to acquire a 100 per cent interest in the Talca gold property (“Talcaâ€) in Chile’s Region IV (the “Acquisitionâ€) with CompañÃa Minera Demetrio Tello and others (the “Vendorsâ€). Concurrently with the Acquisition, OMI announces a proposed private placement of up to US$15 million through a placing of new shares with institutional and other investors (the “Placingâ€).
Highlights
Commenting on the acquisition David Fowler, CEO of Orosur said:
“The Directors of OMI are always actively looking for opportunities which we believe would add value to our existing portfolio of projects and, more importantly, have the potential to increase significantly shareholder value. We believe Talca to be one of these opportunities and are delighted to announce the acquisition, through our subsidiary, Fortune Valley in Chile.â€
Talca Overview and History
Talca has been owned and operated by the Tellos family for approximately 40 years, having produced at an estimated overall average grade of approximately 13g/t gold, from a system of 7 outcropping high grade veins. Talca is located 375km North of Santiago in Region IV of northern Chile. The 1,680 hectare properties are located 15km to the west of Ruta 5 along the Chilean Pacific coast line in the Coastal Cordillera. Talca has a historical artisanal mining history dating back 60 years.
The property hosts two gold mines that have been exploited by artisanal non-mechanized mining during 2011. Historic gold production is approximately 300,000oz of gold. Gold veins on the property are hosted in Paleozoic rocks such as meta-arenite, phyllite, chert and meta-basalts of Devonian-Carboniferous age and interfingering marine and continental sediments of Upper Carboniferous to Permian age. Intrusions of granodiorite to mozodiorite composition and gabbros are locally intruded into these meta-sediments and sediments and have been dated as Triassic-Jurassic age (180-212Ma).
The principal structural control on the property is NNW (320° - 350º) trending shear zones and faults structures between 2 - 4m wide and can be traced from 4 to 8km along strike. Secondary structural control is ± E/W (260° - 285°) striking quartz veins ranging between 0.3 – 4m wide. Gold has been historically mined on both of these structural trends up to depths of over 250m. Grades between 10 - 20g/t gold have been reported and visible gold is common. Other historical and currently operating mines in the district have been mined to depths of up to 600m.
Although significant artisan mining has been undertaken over the years at Talca, the project has not been explored with modern technology and practices.
Talca Exploration Program and Next Steps
The Talca assets comprise a number of mining licenses, property and land easements, each held by members of the Tello family or in separate private limited companies each incorporated in Chile related to the Tello family. As a pre-acquisition step, the Vendors agreed with the Company to incorporate two new special purpose vehicles, Sociedades Contractuales Mineras de Talca and Talca Dos (together â€SCMâ€) to act as holding companies for the mining licenses.
The Company has agreed with the Vendors to acquire 25 per cent of the issued share capital of SCM for consideration of USD$3,840,000, which includes 25 per cent rights to the land and all easements over the rest of the property owned by the Vendors. The Company has also agreed with the Vendors an option to acquire the remaining 75 per cent of the issued share capital of SCM over a period of 5 years from the date of the Acquisition Agreement for a further consideration of USD$3,780,000, which grants the Company the remaining 75 per cent rights to the land not already acquired. The Acquisition Agreement is conditional on the acceptance of 66.66 per cent of the Vendors in value accepting the offer. The Company has, at the date of this announcement, secured irrevocable undertakings to accept the Company’s offer from 71 per cent of the Vendors.
Upon completion of the Acquisition, anticipated around August 2011, OMI will begin an accelerated exploration program including the completion of underground mine topography, and sampling and surface geologic mapping and sampling as a priority. A 480km linear ground magnetic survey, surface mapping and geochemical sampling has commenced. The Company hopes to advance the initial exploration swiftly in order to plan a first pass exploration drill campaign which will consist of approximately 7,500meters in the next six months.
OMI intends to fast track production from the mine. Following an aggressive exploration program to commence in 2011, the Company aims to publish its maiden N.I. 43-101 compliant resources during Q2 2012.
As core drill samples are obtained, OMI will commence a metallurgical test work program in parallel with the exploration campaign, so that data is generated to support the forthcoming engineering studies on the project in a timely manner.
The Company anticipates that a scoping study will commence during Q2 2012. Environmental base line data collection is also scheduled to be initiated in 2011 to support the permitting process. The property is fully licensed from the existing operations and it may be possible to submit an upgrade of the current environmental license, rather than a full application, which OMI expects will take less than a year following submission to relevant authorities.
Placing Details
OMI is seeking to raise gross proceeds of up to US$15 million through the issue of new common shares (the "Placing Shares") to both new and existing institutional shareholders and accredited investors (the “Placeesâ€). The Placing is being conducted, subject to the satisfaction of certain conditions, through an accelerated book-building process to be carried out by Canaccord Genuity Limited ("Canaccord Genuity"), acting as sole manager and sole bookrunner (the "Bookrunner") which will be carried out on a reasonable endeavours basis. The identity of Placees and the basis of the allocations are at the sole discretion of the Company and the Bookrunner. The number of Placing Shares and the price at which the Placing Shares are to be placed (the "Placing Price") will be agreed by the Company with the Bookrunner at the close of the book-building process. Details of the number of Placing Shares and the Placing Price will be announced as soon as practicable after the close of the book-building process.
The books for the Placing will open with immediate effect. The books are expected to close no later than 6:30pm (London time) today. The timing of the closing of the books and the making of allocations may be accelerated or delayed at Canaccord Genuity’s sole discretion. The Appendix to this Announcement contains the terms and conditions of the Placing to Placees (other than Placees in Canada).
By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirety, including the Appendix, and to be making such offer on the terms and subject to the conditions contained herein and to be making the representations, warranties, undertakings and acknowledgements contained in the Appendix to this Announcement.
The Placing Shares will be credited as fully paid and rank pari passu with the existing issued Common Shares when issued.
The Company will apply for admission of the Placing Shares to trading on AIM and it is expected that admission of the Placing Shares will take place and that trading will commence in such shares on or about 16 June 2011 ("AIM Admission") and in any event no later than 30 June 2011. Pursuant to applicable Canadian securities legislation and the policies of the TSX Venture Exchange (the “TSX-Vâ€), closing of the Placing is subject to approval of the TSX-V, which the Company expects to obtain following submission of the Placing details and documentation to the TSX-V.
Settlement of the Placing Shares (other than for Placees in Canada) is expected to take place within the CREST system following AIM Admission.
Participation in the Placing will be limited to institutional investors and certain other 'Qualifying Persons' as defined in the Appendix to this Announcement. Members of the general public are not eligible to take part in the Placing and may read it only for informational purposes.
The Appendix to this Announcement contains the detailed terms and conditions of the Placing.
Use of Proceeds
OMI intends to use the proceeds of the Placing as follows:
Use of Proceeds | Â | Amount |
Talca Acquisition 1st Payments | US$ 4 M | |
Talca exploration programme | US$ 5 – 7 M | |
Acquisition and exploration in Talca district | Up to US$ 4 M | |
Total | US$ 9 – 15 M |
Resignation of Nomad
The Company also announces that Matrix Corporate Capital LLP has resigned as Nominated Adviser to the Company and a new Nominated Adviser will be appointed in due course within the next three months.
For further information, please contact:
Orosur Mining Inc
David Fowler, CEO
Ignacio Salazar,
CFO + 598 2601 6354; info@orosur.ca
Canaccord Genuity Limited (Sole Bookrunner and Placing Agent)
Mark
Williams, +44 (0) 207 050 6758
Ryan Cohen, +44 (0) 207 050 6765
Peter
Stewart, +44 (0) 207 050 6561
Bhavesh Patel + 44 (0) 207 050 6751
Matrix Corporate Capital LLP (Nominated Adviser & Broker)
Robin
Henshall: +44 (0) 203 206 7172
Blythe Weigh Communications (Public Relations and Investor Relations)
Tim
Blythe: +44 (0) 7816 924626
Ana Ribeiro: +44 (0) 7980 321505
Matthew
Neal: +44 (0) 7917 800011
Forward-Looking Statements
All statements, other than statements of historical fact, contained or incorporated by reference in this news release, including any information as to the future financial or operating performance of the Company, constitute "forward-looking statements" within the meaning of certain securities laws, including the "safe harbour" provisions of the Securities Act (Ontario) and the United States Private Securities Litigation Reform Act of 1995 and are based on expectations estimates and projections as of the date of this news release. Forward-looking statements include completion of the Talca acquisition, completion of the private placement, use of proceeds, success of exploration programs and development on the Talca property, expected resource estimate on Talca, commencement of, and results of, a scoping study on Talca, environmental permitting being granted for Talca, and first production at Talca. There can be no assurance that such statements will prove to be accurate; such statements are subject to significant risks and uncertainties and other factors, and actual results and future events could differ materially from those anticipated in such statements. These factors include entering into definitive documentation with the vendor of the Talca property, approval of the vendor’s shareholders, the actual results of current exploration and development activities, project delays, funding needs, future price of metals, conclusions of economic evaluations and other inherent risks involved in the exploration and development of mineral properties described in the Company's most recent annual information form under the heading "Risk Factors" which has been filed electronically by means of the Canadian Securities Administrators' website located at www.sedar.com. The Company disclaims any obligation to update or revise any forward-looking statements if circumstances or management's estimates or opinions should change unless where required by law.
ENDS
Neither TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
About Orosur Mining Inc.
Orosur Mining Inc. is a fully integrated gold producer and exploration company focused on identifying and developing gold projects in Latin America. The Company operates the only producing gold mine in Uruguay (San Gregorio), and has assembled an exploration portfolio of high quality assets in Uruguay and Chile. The Company is quoted in Canada (TSX-Venture Exchange: OMI) and London (AIM: OMI).
General
This announcement, including the Appendix (together the "Announcement"), is not for release, publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada, Australia or Japan or any jurisdiction into which the same would be unlawful (a “Restricted Jurisdictionâ€). This Announcement does not constitute and does not form a part of an offer to sell or issue or the solicitation of an offer to buy or acquire shares in the capital of the Company in any Restricted Jurisdiction. The Placing Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "US Securities Act") or with any securities regulatory authority of any State or other jurisdiction of the United States, and the securities may not be offered, sold, pledged or otherwise transferred, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and applicable state securities laws. Any offering to be made in or into the United States will be made to a limited number of "institutional accredited investors" ("IAIs") within the meaning of Rule 501(a) (1), (2), (3) or (7) of Regulation D under the US Securities Act who are also "qualified institutional buyers" ("QIBs") within the meaning of Rule 144A under the US Securities Act pursuant to an exemption from registration under the US Securities Act in a transaction not involving any public offering. The Placing Shares are being offered and sold outside the United States to non-U.S. persons, in accordance with Regulation S under the US Securities Act. There will be no public offer of securities of the Company in connection with the Placing in the United States, the United Kingdom or elsewhere. No money, securities or other consideration is being solicited and, if sent in response to the information herein, will not be accepted.
This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Canaccord Genuity or by any of its affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
Canaccord Genuity, which is authorised and regulated by the Financial Services Authority in the United Kingdom, is acting exclusively for the Company and no-one else in relation to the Placing and will not be responsible to any persons other than the Company for providing the protections afforded its clients for providing advice in relation to the Placing or in relation to the contents of this Announcement or any other transaction, arrangement or matter referred to in it.
The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or Canaccord Genuity that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Canaccord Genuity to inform themselves about, and to observe, such restrictions.
The information in this Announcement shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would require preparation of further prospectuses or other offer documentation, or be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.
The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the US Securities Act or the applicable laws of other jurisdictions.
This Announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities or any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, such securities by any person in any circumstances, and in any Restricted Jurisdiction. Accordingly, copies of this Announcement are not being and must not be mailed or otherwise distributed or sent in or into or from any Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction or to, or for the account or benefit of, any person from or residing in a Restricted Jurisdiction and any person receiving this announcement (including, without limitation, custodians, nominees and trustees) must not distribute or send it in or into or from any Restricted Jurisdiction.
No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Canaccord Genuity or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER, OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED; AND (B) (I) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS (AS DEFINED IN ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE")), AND/OR (II) PERSONS IN THE UNITED KINGDOM WHO ARE QUALIFIED INVESTORS (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is unlawful.
Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement or the Appendix should seek appropriate advice before taking any action.
Prospective purchasers of the Placing Shares offered should conduct their own due diligence on the Placing Shares. If you do not understand the contents of this announcement you should consult an authorised financial advisor.
The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market operated by the London Stock Exchange and the TSX-V. Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.
APPENDIX
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISORS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A PURCHASE OF THE PLACING SHARES.
NOTICE TO US RESIDENTS
THIS ANNOUNCEMENT MAY NOT BE DISTRIBUTED, TAKEN OR TRANSMITTED IN OR INTO THE UNITED STATES, ITS TERRITORIES OR POSSESSIONS AND ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS ANNOUNCEMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS NOTICE MAY RESULT IN A VIOLATION OF THE US SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES UNLESS SUCH PLACING SHARES ARE REGISTERED UNDER THE US SECURITIES ACT OR ARE OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT AND IN COMPLIANCE WITH STATE SECURITIES LAWS. THE PLACING SHARES ARE BEING OFFERED AND SOLD (i) OUTSIDE THE UNITED STATES TO NON-U.S. PERSONS PURSUANT TO REGULATION S AND (ii) INSIDE THE UNITED STATES TO IAIs WHO ARE ALSO QIBs.
THE PLACING SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE US SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.
NOTICE TO CANADIAN INVESTORS
THIS ANNOUNCEMENT IS NOT, AND UNDER NO CIRCUMSTANCES IS TO BE CONSTRUED AS, A PROSPECTUS, AN ADVERTISEMENT OR A PUBLIC OFFERING OF THE PLACING SHARES IN CANADA. NO SECURITIES COMMISSION OR SIMILAR REGULATORY AUTHORITY IN CANADA HAS REVIEWED OR IN ANY WAY PASSED UPON THE ANNOUNCEMENT OR THE MERITS OF THE PLACING SHARES, AND ANY REPRESENTATION TO THE CONTRARY IS AN OFFENCE. THE ANNOUNCEMENT IS NOT, AND UNDER NO CIRCUMSTANCES IS IT TO BE CONSTRUED AS, AN OFFER TO SELL THE PLACING SHARES DESCRIBED HEREIN OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED HEREIN IN ANY JURISDICTION WHERE THE OFFER OR SALE OF THESE SECURITIES IS PROHIBITED.
THE COMPANY IS A “REPORTING ISSUER,†AS SUCH TERM IS DEFINED UNDER APPLICABLE CANADIAN SECURITIES REGULATIONS, IN THE PROVINCES OF BRITISH COLUMBIA, ALBERTA, ONTARIO AND QUÉBEC. THE DISTRIBUTION OF THE PLACING SHARES IN CANADA IS BEING MADE ONLY ON A PRIVATE PLACEMENT BASIS EXEMPT FROM THE REQUIREMENT THAT THE COMPANY PREPARE AND FILE A PROSPECTUS WITH THE SECURITIES REGULATORY AUTHORITIES IN EACH PROVINCE WHERE TRADES OF PLACING SHARES ARE MADE.
THE PLACING SHARES ARE BEING OFFERED BY THE COMPANY IN THE PROVINCES OF BRITISH COLUMBIA, ALBERTA AND ONTARIO TO CERTAIN ACCREDITED INVESTORS (AS DEFINED IN NATIONAL INSTRUMENT 45-106 -PROSPECTUS AND REGISTRATION EXEMPTIONS) ONLY, EACH OF WHOM WILL BE REQUIRED TO ENTER INTO A SEPARATE SUBSCRIPTION AGREEMENT WITH THE COMPANY, WHICH WILL INCLUDE CERTAIN ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE CANADIAN INVESTOR, IN RESPECT OF ANY PLACING SHARES SUBSCRIBED FOR BY SUCH CANADIAN INVESTOR. CANADIAN INVESTORS ARE ADVISED THAT THE INFORMATION CONTAINED WITHIN THE ANNOUNCEMENT HAS NOT BEEN PREPARED WITH REGARD TO MATTERS THAT MAY BE OF PARTICULAR CONCERN TO CANADIAN INVESTORS. UNLESS PERMITTED BY APPLICABLE SECURITIES LEGISLATION, THE PLACING SHARES WILL BE SUBJECT TO RESALE RULES IN CANADA AND CANNOT BE SOLD OR TRADED IN CANADA UNTIL THE DATE THAT IS FOURTH MONTHS AND A DAY FROM THE DATE OF DISTRIBUTION. ACCORDINGLY, CANADIAN INVESTORS SHOULD CONSULT WITH THEIR OWN LEGAL AND FINANCIAL ADVISERS CONCERNING THE INFORMATION CONTAINED WITHIN THE ANNOUNCEMENT AND AS TO THE SUITABILITY OF AN INVESTMENT IN THE PLACING SHARES IN THEIR PARTICULAR CIRCUMSTANCES.
Details of the Placing
Canaccord Genuity has entered into an agreement with the Company (the "Placing Agreement") under which, subject to the conditions set out in that agreement, Canaccord Genuity has agreed to use reasonable endeavours to procure subscribers for the Placing Shares at a price determined following completion of the bookbuilding process in respect of the Placing (the "Bookbuild"), described in this Announcement and set out in the Placing Agreement.
The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing common Shares including the right to receive all dividends and other distributions declared in respect of such common Shares after the date of issue of the Placing Shares.
Application for admission to trading
The Company will apply for the Placing Shares to be admitted to trading on AIM and it is expected that Admission will take place and that trading will commence in such shares on or about 16 June 2011. Pursuant to applicable Canadian securities legislation and the policies of the TSX-V, closing of the Placing is subject to approval of the TSX-V, which the Company expects to obtain following submission of the Placing details and documentation to the TSX-V.
Bookbuild
Canaccord Genuity will today commence the Bookbuild to determine demand for participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing for Placees (other than Placees in Canada). No commissions will be paid to Placees or by Placees in respect of any Placing Shares.
Canaccord Genuity and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.
Participation in, and principal terms of, the Placing:
Conditions of the Placing
The obligations of Canaccord Genuity under the Placing Agreement are conditional on, amongst other things:
a. agreement being reached between the Company and Canaccord Genuity on the Placing Price and the number of Placing Shares;
b. Admission taking place by no later than 8.00 a.m. (London time) on or about 16 June 2011 (or such later date as the Company and Canaccord Genuity may otherwise agree being not later than 30 June 2011);
c. conditional approval of the TSX-V for the listing of the Placing Shares; and
d. the Placing Agreement becoming unconditional in all other respects.
If any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by Canaccord Genuity, by the respective time or date where specified (or such later time and/or date as the Company and Canaccord Genuity may agree but in any event not later than 30 June 2011), the Placing will not proceed and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.
Canaccord Genuity may, at its discretion and upon such terms as it thinks fit, waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that the condition in the Placing Agreement relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.
None of Canaccord Genuity, the Company or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and / or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Canaccord Genuity.
The Placing Agreement may be terminated by Canaccord Genuity at any time prior to Admission in certain circumstances including, among other things, following a material breach of the warranties given to Canaccord Genuity, the failure by the Company to comply with its obligations under the agreement or the occurrence of certain defined force majeure events.
If the obligations of Canaccord Genuity with respect to the Placing are terminated in the manner contemplated above, the rights and obligations of each Placee, who has been issued a contract note by Canaccord Genuity in respect of the Placing, shall cease and terminate at such time and no claim can be made by any Placee in respect thereof.
The rights and obligations of the Placees will terminate only in the circumstances described in these terms and conditions and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances.
By participating in the Placing, Placees agree that the exercise by Canaccord Genuity of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Canaccord Genuity and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise by Canaccord Genuity.
No prospectus
No offering document, prospectus or admission document has been or will be submitted to be approved by the FSA or submitted to the London Stock Exchange in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including the Appendices) released by the Company today and any information previously published by the Company by notification to a Regulatory Information Service, and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.
Each Placee, by accepting a participation in the Bookbuild and, if relevant, the Placing, agrees that the content of this Announcement (including this Appendix) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than any information previously published by the Company by notification to a Regulatory Information Service), representation, warranty, or statement made by or on behalf of the Company or Canaccord Genuity or any other person and none of Canaccord Genuity or the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Group in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.
Registration and Settlement
Settlement of transactions in the Placing Shares following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions and other than Placing Shares in Canada. Canaccord Genuity and the Company reserve the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in Canaccord Genuity's opinion, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.
Following the close of the Bookbuild for the Placing, each Placee allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares to be allocated to it at the Placing Price and settlement instructions.
Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with Canaccord Genuity. The Company will deliver the Placing Shares to CREST accounts operated by Canaccord Genuity as agent for the Company, and Canaccord Genuity will enter its delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.
It is expected that settlement will take place on or about 16 June 2011 in respect of the Placing Shares, on a delivery versus payment basis.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by Canaccord Genuity.
Each Placee is deemed to agree that, if it does not comply with these obligations, the Company may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Company's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.
Representations and Warranties
By participating in the Bookbuild and the Placing each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with Canaccord Genuity (in its capacity as bookrunner and placing agent of the Company in respect of the Placing) and the Company, in each case as a fundamental term of their application for Placing Shares the following:
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DATE OF DISTRIBUTIONâ€
And, if applicable, will bear a legend under section 5.3(a) of Policy 3.2 of the TSX-V Corporate Finance Manual:
““WITHOUT PRIOR WRITTEN APPROVAL OF THE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADE ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL THE DATE THE IS FOUR MONTHS AND A DAY AFTER THE DISTRIBUTION DATE.â€
40. that the Placee is aware that the Placing Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and that the Placee will not offer, sell, pledge or transfer any Placing Shares, except in accordance with the US Securities Act and any applicable laws of any state of the United States and any other jurisdiction;
41. that it (a) is outside the United States and it is not a U.S. Person purchasing the Placing Shares in an offshore transaction meeting the requirements of Regulation S and such purchase is not a result of any directed selling efforts within the meaning of Rule 902(c) of Regulation S [or (b) (1) it is in the United States and is a QIB who is also an IAI who is purchasing the Placing Shares for its own account, or for the account of one or more persons who are QIBs and are also an IAI, (2) is aware, and each beneficial owner of such Placing Shares has been advised, that the sale of such Placing Shares to it is being made in reliance on an exemption from the registration requirements of the US Securities Act, (3) is purchasing the Placing Shares for its own account or for the account of one or more other investors who are QIBs and are also an IAI for which it is acting as a duly authorised fiduciary or agent, in each case for investment, and not with a view to, or for offer or sale in connection with, any distribution thereof within the meaning of the US Securities Act and the Placee has no plans to enter into any contract, undertaking, agreement or arrangement for any such purpose and (4) has not purchased the Placing Shares as a result of “general solicitation†or “general advertising†(within the meaning of Rule 502(c) under the US Securities Act), including advertisements, articles, research reports, notices or other communications published in any newspaper, magazine, on a website or in or on any similar media, or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;
42. that it is entitled to subscribe for the Placing Shares under the laws of all relevant jurisdictions which apply to it; unless it can give the representations in paragraph 39(b) above, it is outside the United States; has not purchased the Placing Shares as a result of any directed selling efforts within the meaning of Rule 902(c) of Regulation S; and its purchase of the Placing Shares will be in compliance with the requirements of Regulation S, including, without limitation, that the offer and sale of the Placing Shares to it will be made in an "offshore transaction" as such term is defined in Regulation S;
43. that the Placing Shares are being offered in a transaction not involving any public offering in the United States within the meaning of the US Securities Act and that the Placing Shares have not been and will not be registered under the US Securities Act or the securities laws of any State in the United States and further acknowledges that the Placing Shares have not been approved or disapproved by the United States Securities and Exchange Commission or any other Federal or state regulatory agency, nor has any such agency passed on the merits of an investment in the Company;
44. that no representation has been, is being or will be made by the Company as to the availability of an exemption from the registration for the reoffer, resale, pledge or transfer of the Placing Shares in accordance the US Securities Act;
45. that for so long as any of the Placing Shares are “restricted securities†within the meaning of Rule 144(a)(3) under the US Securities Act, it shall not resell or otherwise transfer any of the Placing Shares except (i) to the Company or any of its affiliates; (ii) outside the United States of America pursuant to Rule 903 or Rule 904 of Regulation S; (iii) inside the United States to any person whom the Placee and any person acting on its behalf reasonably believes is a QIB who is also an IAI subscribing for its own account or for the account of a QIB each of whom is also an IAI in a transaction exempt from the registration requirements of the US Securities Act, (iv) pursuant to Rule 144 under the US Securities Act (if available), or (v) pursuant to an effective registration under the US Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. The Placee also agrees that for so long as the Placing Shares are “restricted securities†within the meaning of Rule 144(a)(3) under the US Securities Act, it will not deposit such shares in any unrestricted depositary facility established or maintained by a depositary bank. The Placee also understands that no representation can be made as to the availability of the exemption provided by Rule 144 for resales of interests in the Placing Shares. Further, the Placee agrees to notify any transferee to whom it subsequently reoffers, resells, pledges or otherwise transfers the Placing Shares of the foregoing restrictions on transfer;
46. that its Placing Shares, if issued in certificated form, will bear a legend substantially to the following effect, until the expiration of the applicable holding period with respect to the Placing Shares set forth in Rule 144 under the US Securities Act:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “US SECURITIES ACTâ€) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREBY, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF OROSUR MINING INC. THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO OROSUR MINING INC. AND ITS AFFILIATES; (B) OUTSIDE THE UNITED STATES TO NON U.S. PERSONS IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT AND APPLICABLE FOREIGN LAWS; (C) INSIDE THE UNITED STATES TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE US SECURITIES ACT (A “QIBâ€) WHO IS ALSO AN INSTITUTIONAL ACCREDITED INVESTOR DEFINED IN RULE 501(A)(1), (2), (3) AND (7) UNDER THE US SECURITIES ACT (AN “IAIâ€), PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QIBS EACH OF WHOM IS ALSO AN IAI WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON AN EXEMPTION FROM REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT; (D) PURSUANT TO RULE 144 UNDER THE US SECURITIES ACT (IF APPLICABLE); OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT THAT COVERS RESALES OF SECURITIES. THE HOLDER FURTHER AGREES THAT THE COMMON SHARES ARE ‘‘RESTRICTED SECURITIES’’ WITHIN THE MEANING OF RULE 144(A)(3) UNDER THE US SECURITIES ACT AND THAT IT WILL NOT DEPOSIT SUCH SECURITIES INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF SHARES OF OROSUR MINING INC. ESTABLISHED OR MAINTAINED BY A DEPOSITARY PLACING AGENT;
47. that in the United States (i) there are substantial restrictions on the transferability of the Placing Shares, and that it must bear the economic risk of an investment in the Placing Shares for an indefinite period of time because the Placing Shares cannot be sold, transferred, assigned, hypothecated, pledged, or otherwise disposed of except as provided below; (ii) the Placing Shares to be acquired by the Placee may not be sold, transferred, or otherwise disposed of unless the Placing Shares are registered pursuant to the US Securities Act, or an exemption from registration under the US Securities Act is available, and that in the absence of either an effective registration statement covering such Placing Shares or an available exemption from registration under the US Securities Act, the Placing Shares must be held indefinitely; (iii) the Company has no present intention of registering the Placing Shares to be acquired by the Placee; and (iv) there is no assurance that any exemption from registration under the US Securities Act will be available and, even if available, such exemption may not allow the Placee to transfer all or any portion of the Placing Shares to be acquired by it in the circumstances, in the amounts or at the times the Placee might propose;
48. that:
I. until 40 days after the commencement of the Placing, an offer or sale of the Placing Shares into or within the United States by a dealer, whether or not such dealer is participating in this offering, may violate the registration and prospectus delivery requirements of the US Securities Act if such offer or sale is not made in accordance with an exemption from the registration requirements of the US Securities Act;
II. it has not, its affiliates (as defined in Rule 405 under the US Securities Act) have not, and any persons acting on its or their behalf have not engaged and will not engage in any directed selling efforts (as defined in Regulation S) with respect to the Placing Shares; and
III. it has not, and its affiliates (as defined in Rule 501(b) under the US Securities Act) have not, and any person acting on its or their behalf have not engaged and will not engage in any form of general solicitation or general advertising (within the meaning of Rule 502(c) under the US Securities Act), including advertisements, articles, research reports, notices or other communications published in any newspaper, magazine, on a website or in or on any similar media, or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising in connection with any offer or sale of the Placing Shares.
49. that it has had an opportunity to ask questions of, and to receive information from, the Company and persons acting on its behalf concerning the terms and conditions of the Placing, and to obtain any additional information necessary to verify the accuracy of the information and data received by the Placee;
50. to furnish any information requested to assure compliance with applicable federal and state securities laws in connection with the purchase and sale of the Placing Shares;
51. that the Placee has not used any person as a “Purchaser Representative†within the meaning of Regulation D under the US Securities Act to represent it in determining whether it should purchase the Placing Shares.
When a Placee or person acting on behalf of the Placee is dealing with Canaccord Genuity, any money held in an account with Canaccord Genuity on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from Canaccord Genuity's money in accordance with the client money rules and will be used by Canaccord Genuity in the course of their own business; and the Placee will rank only as a general creditor of Canaccord Genuity.
All times and dates in this Announcement may be subject to amendment. Canaccord Genuity shall notify the Placees and any person acting on behalf of the Placees of any changes.
Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.
DEFINITIONS
Terms not otherwise defined below have the same meanings given to them elsewhere in this Announcement:
“Acquisition Agreement†means the agreement dated 9 June 2011 between Fortune Valley Chile S.A. and the Vendors to acquire the Talca assets;
"Admission" means admission of the Placing Shares to AIM;
"AIM" means the AIM market of the London Stock Exchange;
"Board" means the board of directors of the Company;
"Bookrunner" means Canaccord Genuity;
"Canaccord Genuity" means Canaccord Genuity Limited;
“Common Shares†means the common shares in the capital of the Company;
"Company" means Orosur Mining Inc;
"Directors" means the directors of the Company;
"Group" means the Company and its subsidiary undertakings;
"London Stock Exchange" means London Stock Exchange plc;
"Placees" means investors with whom Placing Shares are placed;
"Placing" means the placing of the Placing Shares described in this Announcement;
"Placing Agreement" means the agreement dated 9 June 2011 entered into by the Company, the executive directors of the Company and Canaccord Genuity in connection with the "Placing" means the placing of the Placing Shares described in this Announcement;
"Placing Price" means the price at which the Placing Shares are to be issued pursuant to the Placing;
"Placing Shares" means the new Common Shares to be issued pursuant to the "Placing" means the placing of the Placing Shares described in this Announcement;
"Regulatory Information Service" has the meaning attributed thereto in the AIM Rules for Companies issued by the London Stock Exchange
"United States" or "US" means the United States of America, its territories and possessions, any State of the United States and the District of Columbia; and
"£" means the lawful currency of the United Kingdom.