Good
morning!
Please
find enclosed a news release issued this morning. If you have any questions or
require further information, please do not hesitate to call.
Best
regards,
Sophia
Shane
Ph.
604-689-7842
RED BACK CLOSES CDN $375 MILLION PRIVATE
PLACEMENT
May 10,
2007... (RBI – TSX) – Red Back Mining Inc. (the
“Company” or “Red Back”) is pleased to announce that it has closed its previously
announced private placement (the “Offering”) of 69,444,000 units
(the “Units”) of the Company at a price $5.40 per Unit raising
gross proceeds of approximately $375 million. Each Unit consisted of 0.2 special warrants (the
“Special Warrants”) and 0.8 subscription receipts (the
“Subscription Receipts”) of the Company. Each whole Special
Warrant entitles holders to receive, without payment of any further
consideration, one common share in the capital of the Company (a “Common
Share”) at any time prior to the date which is the earlier of: (i) the
third business day following the date a final receipt has been issued by the
securities regulatory authorities in Canada for a short form prospectus
qualifying the Common Shares; and (ii) four months and a day following the
closing of the Offering. Each Subscription Receipt entitles the holder to
receive, without payment of additional consideration, one Common Share
immediately following the acquisition by the Company of the Tasiast Gold Project
(the “Acquisition”) and the satisfaction of certain other
conditions (the “Release Conditions”).
The
proceeds of the sale of the Subscription Receipts in the amount of
approximately $300 million, being 80% of the Offering (the “Escrow
Funds”), have been deposited with, and are being held by, an escrow agent
to be released upon satisfaction of the Release Conditions and will be used to
fund the Acquisition and for general corporate and working capital purposes.
If the Release Conditions have not been met on or prior to the date which is
90 days following the closing of the Offering, the Escrow Funds will be
returned in full to the holders of the Subscription Receipts and the
Subscription Receipts will be cancelled. The net proceeds of the sale of the
Special Warrants in the amount of approximately $72.2 million, being 20% of the
Offering less expenses,
have been released to the Company and will be used for general corporate and
working capital purposes.
The
Offering was completed on a private placement best efforts agency basis by a
syndicate of agents led by GMP Securities LP, and including Cormark Securities
Inc., Scotia Capital Inc., Haywood Securities Inc., Dundee Securities
Corporation and Paradigm Capital Inc.
All
securities issued pursuant to the Offering are subject to a four-month hold
period provided, however, that the Company has agreed to use commercially
reasonable best efforts to obtain a final receipt for a short form prospectus
qualifying the distribution of the Common Shares underlying the Special
Warrants and the Subscription Receipts within 90 days following the closing of
the Offering.
The
Company currently operates the Chirano Gold Project located in Ghana, West Africa
which has budgeted production in 2007 of 137,000 ounces of gold. The
acquisition of the Tasiast Gold Project in Mauritania is expected to add a
minimum of 100,000 ounces of gold annually to the Company’s production
profile.
FORWARD-LOOKING
INFORMATION
This press release contains
“forward-looking information” that is based on Red Back’s
current expectations, estimates, forecasts and projections. This
forward-looking information includes, among other things, statements with
respect to Red Back’s plans, outlook and business strategy. The words “may”,
“would’, “could”, “should”,
“will”, “likely”, “expect’,
“anticipate”, “intend”, “estimate”,
“intend”, “plan”, “forecast”,
“project”, “estimate” and “believe” or
other similar words and phrases are intended to identify forward-looking
information.
Forward-looking information is
subject to known and unknown risks, uncertainties and other factors that may
cause Red Back’s actual results, level of activity, performance or
achievements to be materially different from those expressed or implied by such
forward-looking information. Such factors include, but are not limited to:
uncertainties related to drilling results; the ability to raise sufficient
capital to fund exploration; changes in economic conditions or financial
markets; changes in prices for Red Back’s mineral products or increases
in input costs; litigation, legislative, environmental and other judicial,
regulatory, political and competitive developments; technological or
operational difficulties or inability to obtain permits encountered in
connection with exploration activities; and labour relations matters.
This list is not exhaustive of
the factors that may affect our forward-looking information. These and other
factors should be considered carefully and readers should not place undue
reliance on such forward-looking information. Red Back disclaims any intention
or obligation to update or revise forward-looking information, whether as a
result of new information, future events or otherwise.
ON BEHALF OF
THE BOARD:
(signed) “Richard P. Clark,” President
For further information, please call
Sophia Shane at (604) 689-7842
Website: www.redbackmining.com
This news release does not constitute an offer to sell or a
solicitation of an offer to sell any of the securities in the United States. The securities have not
been and will not be registered under the United States Securities Act of 1933,
as amended (the “U.S. Securities Act”) or any state securities laws
and may not be offered or sold within the United States or to U.S. Persons
unless registered under the U.S. Securities Act and applicable state securities
laws or an exemption from such registration is available.