Feb. 8, 2010 (TheNewswire.ca) --
This release is intended for distribution in Canada only and is not intended for distribution to United States newswire services or for dissemination in the United States
Vancouver, British Columbia - February 8, 2010 - Pinnacle Mines Ltd. (TSXV: PNL)("Pinnacle" or the "Company") announces that it has filed a preliminary short form prospectus with the securities commissions in each of the provinces and territories of Canada in respect of a rights offering to raise gross proceeds of $4,578,807 (the "Rights Offering").
Each holder of record of Pinnacle common shares ("Common Shares"), as of a record date to be announced, will receive one right (a "Right") for each Common Share held. Each Right will entitle the holder thereof to acquire one Common Share at a subscription price of $0.05 per Common Share (the "Subscription Price"). The Rights Offering will include an additional subscription privilege under which holders of Rights who fully exercise their Rights will be entitled to subscribe for additional Common Shares, if available, that were not otherwise subscribed for in the Rights Offering. The Rights will be exercisable for 21 days. The record date and expiry date for the Rights Offering will be determined at the time of filing of the final short form prospectus.
To subscribe for Common Shares, a completed rights certificate, together with payment in full of the Subscription Price for each Common Share subscribed for, must be received by the subscription agent for the Rights Offering, Computershare Trust Company of Canada (the "Subscription Agent"), prior to the expiry date.
The Rights Offering is being made to holders of Common Shares in all of the provinces and territories of Canada. Rights certificates and prospectuses will not be mailed to holders of Common Shares resident outside of Canada ("Non-Qualifying Shareholders"). Non-Qualifying Shareholders will be sent a letter advising them that their rights certificates will be issued to and held by the Subscription Agent, which will hold those Rights as agent for the benefit of all Non-Qualifying Shareholders. The Subscription Agent will attempt, on a commercially reasonable basis, to sell the Rights of Non-Qualifying Shareholders (other than those shareholders from whom Pinnacle accepts subscriptions) over the facilities of the TSX Venture Exchange. The Subscription Agent will mail cheques representing the net proceeds, without interest, from such sales.
The Rights and Common Shares issuable upon the exercise of the Rights have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold in the United States or any of its territories or possessions or to U.S. persons. Accordingly, subscriptions will not be accepted from any security holder or transferee who is a U.S. person or resident in the United States, its territories or possessions.
Pinnacle will accept subscriptions from Non-Qualifying Shareholders, other than holders resident in the United States, if they satisfy the Subscription Agent and the Company that such offering to, and subscription by, such holder or transferee, is lawful and in compliance with all securities and other laws applicable in the jurisdiction where such holder or transferee is resident. A Non-Qualifying Shareholder in a jurisdiction other than the United States who meets these requirements and wishes to exercise Rights must complete and deliver a request for exempt purchaser status, which will be provided in the materials sent to such shareholder.
In support of the Rights Offering, the Company has entered into a standby guarantee agreement with Progress Advanced Holdings Ltd. ("Progress Advanced") under which Progress Advanced has agreed to purchase from the Company at the Subscription Price any Common Shares that are not otherwise subscribed for under the Rights Offering (the "Standby Common Shares").
In consideration for Progress Advanced agreeing to subscribe for the Standby Common Shares, Progress Advanced will be granted a non-transferable purchase warrant to acquire up to 22,894,033 Common Shares at the Subscription Price for a period of six months from the closing date of the Rights Offering.
The Rights Offering and the issuance of the warrant to Progress Advanced under the standby guarantee agreement are subject to regulatory approval, including that of the TSX Venture Exchange.
Further details concerning the Rights Offering and the procedures to be followed by holders of Common Shares are contained in the preliminary prospectus available on the Company's profile at www.sedar.com. The preliminary prospectus is still subject to completion or amendment. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the (final) prospectus has been issued.
This news release does not constitute an offer to sell, or the solicitation of an offer to buy securities in any jurisdiction, including the United States, or to or for the account or benefit of U.S. persons absent U.S. registration or an applicable exemption therefrom, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state. The Rights and the Common Shares issuable on exercise of the Rights will not be and have not been registered under the U.S. Securities Act, and may not be offered or sold in the United States or to, or for the account or benefit of, a U.S. person, absent registration or an applicable exemption therefrom.
Pinnacle Mines Ltd. is a Canadian based minerals exploration company. In Canada, Pinnacle holds the Silver Coin gold prospect as its major asset and is developing and increasing the value of the Silver Coin gold resource (OTCBB:GORO) through continued drilling, exploration and on-going scoping studies. Silver Coin is located in an emerging major metals district that includes the historic Silbak-Premier gold mine and Barrick Gold's (NYSE:ABX) (TSX:ABX) famed Eskay Creek Mine.
For further information on Pinnacle, please contact Mike Thast at 604.688.9588 or visit Pinnacle's website at www.pinnaclemines.com.
On Behalf of the Board:
Lawrence A. Dick, Ph.D., P.Geo
President & CEO
Neither the 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 news release.
FORWARD LOOKING STATEMENTS: This document includes forward-looking statements as well as historical information. Forward-looking statements include, but are not limited to, the continued advancement of the company's general business development, research development and the company's development of mineral exploration projects. When used in this document, the words "anticipate", "believe", "estimate", "expect", "intent", "may", "project", "plan", "should" and similar expressions may identify forward-looking statements. Although Pinnacle Mines Ltd. believes that their expectations reflected in these forward looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that fluctuations in the marketplace for the sale of minerals, the inability to implement corporate strategies, the ability to obtain financing and other risks disclosed in our filings made with Canadian Securities Regulators.
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