/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
TORONTO, March 16 /CNW/ - Victoria Gold Corp. (TSX-V:VIT) ("Victoria" or "the Company") is pleased to announce that it has closed its previously announced underwritten private placement of Units and Subscription Receipts for aggregate gross proceeds of $10,180,710 (the "Offering"). A syndicate led by Wellington West Capital Markets Inc. and including Paradigm Capital Inc., Raymond James Ltd., Haywood Securities Inc. and M Partners Inc. purchased 15,832,000 Units for gross proceeds of $7,124,400 and 6,791,800 Subscription Receipts for gross proceeds of $3,056,310, each priced at $0.45, under the Offering.
Each Unit consists of one common share of the Company and one-half of one common share purchase warrant (each whole warrant a "Warrant"). Each Warrant will entitle the holder to acquire one additional common share at a price of $0.55 until March 13, 2012.
Each Subscription Receipt will convert, upon satisfaction of certain escrow release conditions, into one common share of the Company and one-half of one common share purchase warrant (each whole warrant a "SR Warrant"). Each SR Warrant will entitle the holder to acquire one additional common share of the Company at a price of $0.55 until March 13, 2011. The escrow release conditions include the completion by the Company of the acquisition of StrataGold Corporation ("StrataGold") announced on February 11, 2009 (the "StrataGold Acquisition"). In the event that the escrow release conditions are not satisfied by June 30, 2009, the gross proceeds from the sale of the Subscription Receipts plus any accrued interest will be returned to the purchasers of the Subscription Receipts.
Net proceeds from the Offering will be used to advance Victoria's gold projects in Nevada, to finance the StrataGold Acquisition and for working capital purposes.
Status of StrataGold Acquisition
In order to satisfy all of the legal and regulatory requirements associated with the StrataGold Acquisition, Victoria and StrataGold have mutually agreed to an extension of the deadline for the execution of the Definitive Agreement (as per the February 11, 2009 news release) to March 25, 2009. Victoria and StrataGold remain committed to completing this transaction in a timely manner, with closing of the transaction still contemplated by May 31, 2009 and in any event no later than June 30, 2009.
Additional Information about the Financing
The Common Shares, Warrants, SR Warrants and, if applicable, the common shares Issued upon exercise of the Warrants and the SR Warrants, respectively, will be subject to a four-month hold period under applicable Canadian securities laws. Completion of the Offering is subject to receipt by the Company of all necessary regulatory approvals.
As compensation for services rendered In connection with the Offering, the Underwriters were paid a cash commission equal to 7% of the proceeds from the sale of Units and were issued broker warrants to purchase an aggregate of 1,108,240 common shares of the Company at a price of $0.45 per Common Share until March 13, 2010. Upon satisfaction of the escrow release conditions, the Underwriters will receive a further cash commission equal to 7% of the proceeds from the sale of Subscription Receipts and will be issued broker warrants to purchase 475,426 common shares of the Company at a price of $0.45 per common share until March 13, 2010
The securities being offered have not, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, US persons absent US registrations or an applicable exemption from the US registration requirements. This release does not constitute an offer for sale of securities in the United States.
Victoria aims to be a high growth, lower risk company focused on gold. The Company's strategy is to add value per share through efficient exploration, accretive acquisitions and effective marketing. Maintaining a low risk profile through project diversification, sound financial management, and operating in secure jurisdictions are key priorities for Victoria's management team.
StrataGold is a TSX Exchange listed mineral exploration company. StrataGold's main projects are the Eagle Zone Deposit and the Mar-Tungsten Deposit located in central Yukon, and the Tassawini Deposit and the BRL Venture located in Guyana. The Eagle Zone Deposit has a National Instrument (NI) 43-101 Indicated Resource containing 2.69 million ounces of gold in 98,584,000 tonnes grading 0.849 grams per tonne (g/t) gold. The Mar-Tungsten Deposit, located 2.5 kilometres northeast of the Eagle Zone Deposit, contains a NI 43-101 Indicated Resource containing 86.2 million pounds of tungsten in 12,700,000 tonnes grading 0.31% WO3 plus an Inferred Resource of 8.9 million pounds of tungsten in 1,300,000 tonnes grading 0.30% WO3 and has a recent positive NI 43-101 Preliminary Economic Assessment. The Tassawini Deposit contains a NI 43-101 Indicated Resource of 436,600 ounces of gold in 10,766,600 tonnes grading 1.3 g/t gold. Newmont Mining Corporation of Canada Limited is a major shareholder of StrataGold, holding approximately 14.9% of the common shares outstanding, and Newmont Overseas Exploration Limited, a subsidiary of Newmont Mining Corporation, is StrataGold's joint venture partner on the BRL Venture.
On Behalf of Victoria Gold Corp. Chad Williams, P. Eng, CEO, President & Director
Cautionary Language and Forward-Looking Statements
This press release includes certain statements that may be deemed "forward-looking statements". All statements in this discussion, other than statements of historical facts, that address future exploration drilling, exploration activities and events or developments that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include metal prices, exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Accordingly, readers should not place undue reliance on forward-looking statements.
This news release and the information contained herein does not constitute an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or exemption from registration.
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.