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Monday, March 17, 2008
Hawthorne Gold Announces $20 Million Financing
THIS NEWS RELEASE IS NOT FOR
DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED
STATES
Hawthorne Gold Corp. ("Hawthorne" or the "Company")
(TSX-V: HGC; WKN: A0M55U) announces it has arranged a brokered private
placement (the "Offering) to raise gross proceeds of up to $20 million
led by Blackmont Capital Inc ("Blackmont"). The Offering consists
of up to 7,500,000 units (the "Units") priced at $2.00 per Unit to
raise gross proceeds of up to $15 million. Each Unit consists of one common
share and one-half warrant, with each whole warrant exercisable for a period
of 24 months from the closing date of the Offering, to acquire one common
share at $2.50 per common share. The Offering also consists of up to
2,083,333 flow-through common shares (the "Flow-Through Common
Shares") priced at $2.40 per share to raise gross proceeds of up to $5
million. Blackmont will receive a cash commission of 6% of the gross proceeds
raised, and compensation options equal to 6% of the aggregate number of Units
and Flow-Through Common Shares sold pursuant to the Offering. Each
compensation option will entitle the holder thereof to purchase one common
share at an exercise price of $2.00 per common share for a period of 12
months from the closing of the Offering.
Proceeds from the Offering will be used to fund the Company's 2008 field work
on the Frasergold deposit, including a planned 26,000 metre definition drill
program, development work at the Table Mountain gold project to advance to
planned production in 2009, definition drilling at the Taurus deposit and for
general working capital. The acquisition of the Table Mountain gold project
is subject to the completion of the statutory plan of arrangement (the
"Arrangement") between Hawthorne and Cusac Gold Mines Ltd.
("Cusac") expected to close in late March 2008 (see Hawthorne's
press release dated March 14, 2008). On March 14, 2008, Cusac shareholders
and debentureholders voted 93% and 100%, respectively, in favor of the
Arrangement. The closing of the Arrangement is subject to final regulatory
and court approval.
The common shares and warrants to be issued in connection with this Offering
will be subject to a four month hold period from the closing date of the
Offering in accordance with the policies of the TSX Venture Exchange (the
"Exchange") and applicable securities laws.
About Hawthorne Gold Corp.
Hawthorne Gold Corp. is a Canadian-based gold exploration and development
company with key properties located in British Columbia, Canada. Hawthorne is
lead by well-respected mining leaders Richard Barclay and Michael Beley
together with mining veteran Michael Redfearn. Hawthorne's goal is to become
a junior gold producer through planned production at Table Mountain in 2009
and continued resource development at the Frasergold and Taurus deposits.
Pursuant to an option agreement dated October 31, 2006 between Hawthorne and
Eureka Resources Inc. (TSX-V: EUK), Hawthorne can earn a 51% interest in the
Frasergold property by completing sufficient exploration expenditures
totaling $3.5 million (expended), completing a feasibility study by April 30,
2010 and making cash payments totaling $175,000 ($75,000 paid to date) before
October 31, 2009. Hawthorne can earn a further 9% (for a total of 60%) by
arranging financing for 70% of the estimated capital costs for production.
For more information on Hawthorne, contact Robert Ferguson at (604) 629-1505
or toll free at 1-888-629-1505 or Todd Hanas toll free at 1-866-869-8072, or
you can visit Hawthorne's website at www.hawthornegold.com.
ON BEHALF OF HAWTHORNE GOLD CORP.
"Richard J. Barclay"
President & CEO
Certain
information regarding the company including management's assessment of future
plans and operations, may constitute forward-looking statements under
applicable securities laws and necessarily involve risks associated with
mining exploration and development, volatility of prices, currency
fluctuations, imprecision of resource estimates, environmental and permitting
risks, the closing of the merger with Cusac Gold Mines Ltd., access to labour
and services, competition from other companies and ability to access
sufficient capital. As a consequence, actual results may differ materially
from those anticipated in the forward-looking statements. The TSX Venture
Exchange does not accept responsibility for the adequacy or accuracy of this
release.
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