/NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRES/
TORONTO, May 25 /CNW/ - Mandalay Resources Corporation (TSXV: MND) ("Mandalay" or the "Company") is pleased to announce that it has filed a preliminary short form prospectus with the securities regulatory authorities in each of the provinces of Canada, except Québec, in connection with a fully marketed offering (the "Offering") to raise aggregate proceeds of up to C$40 million on a best efforts basis with a syndicate of agents co-led by GMP Securities L.P. and BMO Capital Markets (collectively, the "Agents"). The Offering will consist of subscription receipts (the "Subscription Receipts"). Each Subscription Receipt will be automatically exchanged, without payment of any additional consideration and subject to adjustment, for one unit (each a "Unit") comprised of one common share of the Company (each a "Unit Share") and one half of one common share purchase warrant (each a "Warrant"). The issue price per Unit and the terms of the Warrants underlying the Units will be negotiated between the Agents and the Company.
The Offering follows the signing of a purchase agreement with Coeur d'Alene Mines Corporation ("Coeur") pursuant to which the Company agreed to purchase Coeur's wholly-owned subsidiary Compania Minera Cerro Bayo Ltda. ("Minera Cerro Bayo"). Please refer to the Company's press release dated May 4, 2010 for further details. The principal asset of Minera Cerro Bayo is the Cerro Bayo silver-gold mine in Patagonia, Chile, currently on care and maintenance.
Brad Mills, CEO of Mandalay said, "We are pleased to have filed our preliminary prospectus for the financing in connection with our acquisition of Cerro Bayo. The acquisition meets all of our investment criteria, and we look forward to the next stage of growth."
The gross proceeds of the Offering, less an amount equal to the expenses of the Agents in connection with the Offering (the "Escrowed Funds"), will be held in escrow and released to the Company when the Release Conditions have been satisfied. If the Release Conditions are not satisfied on or before 5:00 p.m. (EDT) on June 30, 2010, holders of Subscription Receipts will be entitled to a full refund of the subscription price for their Subscription Receipts.
The Release Conditions include the satisfaction of the conditions precedent contained in the purchase agreement dated May 1, 2010 between the Company and Coeur (available under the profile of the company at www.sedar.com), and the receipt by the Company of the conditional approval of the TSX Venture Exchange or the Toronto Stock Exchange, as applicable, of the Offering and the listing of the Subscription Receipts, the underlying Unit Shares and Warrants and the common shares issuable upon exercise of the Warrants.
The proceeds from the Offering will be used to fund the purchase price of Minera Cerro Bayo, Cerro Bayo mine development, exploration and plant improvements, as well as general working capital. The intended closing date of the Offering is June 24, 2010. The preliminary short form prospectus is available on SEDAR under Mandalay's profile at www.sedar.com.
About Mandalay Resources Corporation:
Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia and exploration projects in Chile. The Company is focused on executing a roll-up strategy, creating critical mass by aggregating advanced or in-production gold, copper, silver and antimony projects in Australia and the Americas to generate near-term cash flow and shareholder value.
The securities described herein 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 accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company's securities in the United States.
This news release contains "forward-looking statements" within the meaning of applicable securities laws. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, Mandalay's ability to complete the proposed financing, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. In addition, there can be no assurance that any inferred resources that are discovered as a result of additional drilling will ever be upgraded to proven or probable reserves. Although Mandalay 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 cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking 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.
THE TSX VENTURE EXCHANGE HAS NOT YET REVIEWED AND DOES NOT TAKE RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE.
SOURCE Mandalay Resources Corporation
For further information: For further information: Bradford Mills, Chief Executive Officer, Greg DiTomaso, Investor Relations, Contact: (647) 260-1566, Email: email@example.com, Company website: www.mandalayresources.com