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Not for distribution to United States news wire services or dissemination in
the United States
News Release
Yukon Zinc Corporation
Announces Final Prospectus Filing
Vancouver, BC,
November 23, 2007 - Yukon Zinc Corporation (YZC.TSX-V) (the "Company")
announces that it has filed its final prospectus for an offering of up to
$130 million of securities (the "Offering"). The Offering
provides for the sale of Class A Subscription Receipts ("Class A
Receipts"), Class B Subscription Receipts ("Class B
Receipts") and units (the "Equity Units"). There is an
over-allotment option of 10%. The Offering is expected to close on or
about November 29, 2007 (the "Closing"). Dr. Harlan Meade,
President and CEO of Yukon Zinc states that "it has been a very
difficult market within which to arrange the equity portion of project
financing; however, it is important to complete the financing and advance the
project to a production decision to take advantage of future zinc
markets".
Pricing of the Offering
has changed since the Company's previous release of November 7, 2007. Each
Class A Receipt will be priced at Cdn$1,000 and will entitle the holder to
acquire for no additional consideration (i) $1000 principal amount of
subordinated secured convertible notes ("Convertible Notes"), and
(ii) 700 common shares ("Common Shares") of the Company.
The Convertible Notes will mature eight years and six months after the
closing of the Offering (the "Closing"). An interest
rate of 11.0% per annum will apply to each Convertible Note and will be paid
semi-annually. The interest will accrue from Closing. The conversion
price for the Convertible Notes is $0.20 per Common Share. If at any
time after the 5th anniversary of the closing of the Offering, the
weighted average trading price of the Common Shares is greater than $0.2625
for any 20 consecutive trading days, the Company may, subject to certain
conditions, require the Convertible Notes to be converted upon 30 days
notice.
Each Equity Unit will be priced at $0.16 and will consist of: (i) one
Common Share and (ii) one-half of one Common Share purchase warrant (a
"Warrant"). Each whole Warrant will entitle the holder to
acquire an additional Common Share for a period of 5 years at an exercise
price of $0.23.
Each Class B Receipt will be priced at Cdn$0.16 and will entitle the
holder to acquire, for no additional consideration, one Common Share and
one-half of one Warrant.
The net proceeds of the Offering, together with a previously-announced
Barclays Capital US$140 million underwritten senior debt facility
("Barclays Facility") (see August 27, 2007 News
Release), are to be used to fund the balance of the Wolverine Project
capital funding requirement, which includes a US$25 million capital cost
overrun requirement, and for general corporate purposes.
Upon completion of the Offering, the aggregate of: (i) the issue
price of any Class A Subscription Receipt that is exercised at Closing; (ii)
the greater of (A) $17 million and (B) the proceeds from the sale of Equity
Units, (the aggregate of (i) and (ii) referred to herein as the "Closing
Payment"); and (iii) the Agents expenses and Commission on the
Closing Payment will be released to the Company and the Agents. The
balance of the gross proceeds of the Offering, including the Agents cash
commission on such funds, will be held in escrow pending satisfaction of the
conditions for financial close of the Barclays Facility (the "Barclays
Release Conditions"), provided that additional amounts, together with
the Agents cash commission thereon, may be released from escrow to the
Company prior to the release of the Barclays Release Conditions to support
certain project-related expenditures.
Upon satisfaction of the Barclays Release Conditions by March 3, 2008, the
Class A Receipts and Class B Receipts will automatically be exercised for
Convertible Notes and Common shares and for Common Shares and Warrants,
respectively, and the escrowed portion of the funds raised through the
Offering will be released to the Company and the Agents.
If the Barclays Release Conditions are not met by March 3, 2008, the
subscription price for the outstanding Class A Receipts and Class B Receipts
will be refunded, and interest on the Class A Receipts at the rate of 11% per
annum will be paid, using the escrowed funds. If there are insufficient
escrowed funds to make such refunds and payments, the interest on the Class A
Receipts will be paid from the escrowed funds derived from the sale of Class
A Receipts and the balance of the escrowed funds will be allocated to the
Class A and Class B Receipts in proportion to the initial funds contributed
to the escrow from each class of receipts. The portion of the escrowed
funds allocated to Class B Receipts will be used to refund the subscription
price of Class B Receipts and those that are not refunded will automatically
be exercised for Equity Units at the price of $0.16 per unit. The
portion of the escrowed funds allocated to the Class A Receipts, less an
amount equal to two years interest on the Convertible Notes that the Class A
Receipts that are not refunded will be exercised for, will be used to refund
the subscription price of Class A Receipts and any Class A Receipts not so
refunded will automatically be exercised for Convertible Notes and Common
Shares at the price of $1000 per $1,000 principal amount of Convertible Note
and 700 Common Shares.
The completion of the Offering, together with the Barclays Facility, will
enable the Company to proceed with construction at the Wolverine
Project.
The Offering is subject to receipt of regulatory approvals and other
standard conditions.
Yukon Zinc Corporation is focused on the development and construction
of the Wolverine zinc silver deposit, as the Yukon's next significant
zinc-silver mine and the exploration of the Finlayson District as Canada's
newest Volcanogenic Massive Sulphide District.
The securities comprising the Offering have not been registered
under the U.S. Securities Act of 1933, as amended (the "U.S. Securities
Act") or any state securities laws, and may not be offered or sold in
the United States absent registration or any applicable exemption from the
registration requirements of the U.S. Securities Act and applicable state
securities laws. This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in the United States.
All dollars in this release refer to Canadian funds.
Except for the statements of historical fact contained herein, the
information presented in this News Release constitutes "forward-looking
statements" as such term is used in Canadian securities laws. These
statements relate to analyses and other information that are based on
forecasts of future results, estimates of amounts not yet determinable and
assumptions of management. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions or future events or performance (often,
but not always, using words or phrases such as "expects" or
"does not expect", "is expected", "anticipates"
or "does not anticipate", "plans, "estimates" or
"intends", or stating that certain actions, events or results
"may", "could", "would", "might" or
"will" be taken, occur or be achieved) are not statements of
historical fact and should be viewed as "forward-looking
statements". Such forward looking statements, including but not limited
to, those with respect to the Offering, the Barclays Facility and the ability
of the Company to proceed with construction at the Wolverine Project, zinc
markets and the other factors and events described in this News Release,
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such risks and other
factors include, among others, the estimation or realization of Mineral
Resources and Mineral Reserves (as such terms are defined by applicable
Canadian securities regulators); variations in the underlying assumptions
associated with conclusions of economic evaluations, including the timing and
amount of estimated future production, costs of production, capital
expenditures, the failure of plant, equipment or processes to operate as
anticipated and possible variations in ore grade or recovery rates;
availability of capital to fund programs and the resulting dilution caused by
the raising of capital through the sale of shares; risks of the mining
industry, including without limitation, those associated with the
environment; and delays in obtaining governmental approvals, permits or
financing. Although the Company has attempted to identify important
factors that could cause actual actions, events or results to differ
materially from those described in forward-looking statements, there may be
other factors that could cause actions, events or results not to be as
anticipated, estimated or intended. There can be no assurance that such
statements will prove to be accurate as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements contained in this News Release and in any document referred to in
this News Release.
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For more information contact:
Dr. Harlan Meade, President and CEO
Shae Dalphond Manager, Investor Communications
Telephone: (604) 682-5474 Toll-free: 1-877-682-5474
Facsimile: (604) 682-5404
info@yukonzinc.com
www.yukonzinc.com
THE TSX VENTURE EXCHANGE HAS
NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OF THIS NEWS
RELEASE.
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