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TORONTO, Aug. 18 /CNW/ - Geoinformatics Exploration Inc. (TSX-V: GXL)
("Geoinformatics" or the "Company") is pleased to announce that it has entered
into binding agreements with Geologic Resource Partners LLC ("GRP") of Boston,
Massachusetts with respect to (i) a Cdn$5.5 million short-term secured loan
(the "Bridge Loan"), and (ii) a private placement of common shares at a price
of Cdn$0.05 per share for gross proceeds of up to approximately Cdn$27 million
(the "Private Placement").
GRP is the investment manager for several Geologic Resource funds
(collectively, "GRF"), which currently hold 24,091,315 common shares of
Geoinformatics (approximately 17.4% of the common shares outstanding).
Under the Bridge Loan, GRP has agreed to extend to the Company a
Cdn$5.5 million bridge loan on a secured basis which the Company may draw down
in tranches. Cdn$1.0 million will be made available to the Company
immediately, a further Cdn$1.0 million will be available to the Company,
subject to certain conditions, prior to the security being finalized, and the
balance will be available to the Company upon execution of loan and security
documents, receipt of any necessary regulatory approvals, and satisfaction of
certain other conditions. Advances under the Bridge Loan will bear interest at
a rate equal to 12% per annum. The Bridge Loan will mature on March 2, 2009,
subject to GRP's right to accelerate repayment in the event of a default under
the loan. As security for the Bridge Loan, the Company has agreed to pledge
all of the shares of its material subsidiaries. Advances under the Bridge Loan
shall be used by the Company to fund its ongoing exploration activities and
for general working capital.
Under the Private Placement, GRP has agreed to subscribe for common
shares of the Company at a subscription price of Cdn$0.05 per share for an
aggregate subscription amount equal to the sum of the Canadian dollar
equivalent of $US20.0 million (to be determined as of two business days prior
to closing of the Private Placement) plus Cdn$5.5 million. Based on a Cdn/US
exchange rate of $1.062, GRP would subscribe for 534,800,000 common shares of
the Company, and upon completion of the Private Placement, GRF would hold
558,891,315 common shares of the Company, representing approximately 83% of
the outstanding shares of the Company. Proceeds from the Private Placement
will be used (i) to repay the entire principal amount of the Company's
outstanding US$20 million secured debentures held by GRF, (ii) to repay
amounts drawn under the Bridge Loan, (iii) to advance the Company's Whistler
Project, and (iv) for working capital.
The Bridge Loan constitutes a "related party transaction" for the Company
but is exempt from the formal valuation requirement of securities laws as the
Company's common shares are listed only on the TSX-V. The Bridge Loan is
exempt from the minority shareholder approval requirement of securities laws
as amounts due under the Bridge Loan are not convertible into or repayable in
common shares of the Company and the terms of the Bridge Loan are commercially
reasonable and not less advantageous to the Company compared to if the loan
were to be obtained from an arm's length party.
The Private Placement requires shareholder approval under the policies of
the TSX-V. In addition, since the Private Placement constitutes a "related
party transaction", minority shareholders of Geoinformatics, specifically
shareholders other than GRF, must also approve the Private Placement. The
Company intends to call and hold a special meeting of shareholders in October
2008 (the "Meeting") for the purpose of seeking approval of the Private
Placement. The Private Placement, like the Bridge Loan, is exempt from the
formal valuation requirement of securities laws as the Company's common shares
are listed only on the TSX-V.
At the Meeting, shareholders will also be asked to re-approve a
consolidation of the Company's common shares on the basis of one new common
share for each ten existing common shares. After closing of the Private
Placement and consolidation of the Company's common shares, the Company will
have approximately 67.3 million shares outstanding.
Closing of the Private Placement is conditional upon shareholder approval
(as described above); shareholder approval of the share consolidation, TSX-V
approval, execution of amended employment agreements with key management
personnel of the Company and other conditions typical of such private
The Company is also pleased to announce the appointment of George R.
Ireland and Peter Stein to the Board of Directors of the Company. Mr. Kevin L.
Snook, Chairman, has retired from the Board and Mr. John Kanellitsas has been
appointed as his successor as Chairman. The Board of Directors and management
would like to extend their sincere thanks and appreciation to Mr. Snook for
his dedication to and support of the Company over the years.
The Board of Geoinformatics now consists of Dr. Michael Etheridge, an
independent director who has served on the Company's Board for the past 3
years, Mr. Peter Stein, an independent director, Mr. George Ireland, Chief
Investment Officer of GRF, Mr. John Kanellitsas, Chief Operating Officer of
GRF, and Ms. Rosie Moore, a consultant to GRF.
Geoinformatics is a North American-focused minerals exploration company
which has developed a unique approach to exploration applying innovative and
The Company announced an independent NI 43-101-compliant mineral resource
estimate with an Indicated Resource of 840,000 ounces of gold and an Inferred
Resource of 2.7 million ounces on the initial discovery zone at the Whistler
Project in southern Alaska. The Indicated category contains 30 million tonnes
grading 0.87 g/t gold, 2.46 g/t silver and 0.24% copper and the Inferred
category contains 155 million tonnes grading 0.62 g/t gold, 2.15 g/t silver
and 0.19% copper. Significant copper and silver mineralization increases the
Indicated gold-equivalent mineral resource to 1.3 million ounces and the
Inferred mineral resource to 4.4 million ounces.
Geoinformatics is also exploring several advanced projects located in
Sinaloa (Mexico), Utah, the Cortez Trend region of Nevada, and British
Columbia. Geoinformatics has an extensive portfolio of other direct and
indirect property interests, joint ventures, and royalties covering a wide
range of minerals in Mexico, Australia, New Zealand and North America.
About Geologic Resource Partners
Geologic Resource Partners, LLC is a Boston-based institutional money
management firm specializing in metals and mining investments. GRP invests on
a global basis in publicly-listed equities of companies with small and micro
market capitalizations. The Chief Investment Officer and Portfolio Manager of
GRP is George R. Ireland.
This news release includes certain forward-looking statements concerning
the future performance of Geoinformatics' business, operations and financial
performance and condition, as well as management's objectives, strategies,
beliefs and intentions, including in respect of its intent to finalize a
private placement and loan arrangement with GRP. Forward-looking statements
are frequently identified by such words as "may", "will", "plan", "expect",
"anticipate", "estimate", "intend" and similar words referring to future
events and results. Forward-looking statements are based on the current
opinions and expectations of management. All forward-looking information is
inherently uncertain and subject to a variety of assumptions, risks and
uncertainties, including the speculative nature of mineral exploration and
development, fluctuating commodity prices, competitive risks and the
availability of financing, as described in more detail in our recent
securities filings available at www.sedar.com. Actual events or results may
differ materially from those projected in the forward looking-statements and
Geoinformatics cautions against placing undue reliance thereon. Neither
Geoinformatics nor its management assumes any obligation to revise or update
these forward-looking statements.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
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. 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.
For further information:
For further information: Ms. Petra Decher, President and Chief Financial
Officer, Tel: (416) 861-1300 x225, Email: firstname.lastname@example.org; Mr. Darren
Holden, Chief Operating Officer, Tel: (604) 605-3073 x105, Email:
email@example.com; Mr. John Kanellitsas, Chairman, Tel: (208) 726-0079,
Email: firstname.lastname@example.org; Geoinformatics Exploration Inc., 330 Bay
Street, Suite 1109, Toronto, Ontario, M5H 2S8, www.geoinformex.com