Geovencap Arranges up to $1 Million Private Placement


MONTREAL, Feb. 7, 2013 /CNW Telbec/ - Geovencap Inc. (TSXV: GOV) ("Geovencap" or the "Company") announces that it has entered into an agreement with MGI Securities Inc. (the "Agent") to proceed with a private placement on a "best efforts" basis for gross proceeds of up to $1,000,000 (the "Offering"). The Offering consists of the issuance of a maximum of 3,076,923 flow-through common shares (the "Flow-Through Shares") at a price of $0.13 per Flow-Through Share for maximum gross proceeds of $400,000 and a maximum of 6,000,000 units (the "Units") at a price of $0.10 per Unit for maximum gross proceeds of $600,000. Each Unit will be comprised of one common share at a price of $0.10 and one-half common share purchase warrant. Each warrant entitles its holder to purchase a common share at a price of $0.15 per share for a period of 24 months following the closing of the Offering.

Geovencap will grant an over-allotment option to the Agent, which may be exercised for 30 days following the closing of the Offering, pursuant to which the Agent will have the right to sell additional Flow-Through Shares and/or Units in a maximum amount equal to 15% of the number of Flow-through Shares and Units sold in the Offering, respectively. If the over-allotment option is exercised in full, Geovencap will raise gross proceeds of $1,150,000 from the Offering.

At the closing of the Offering, the Agent will receive a cash commission equal to a maximum of 8% of the gross proceeds raised under the Offering.  In addition, the Agent shall receive non-transferable warrants at a price of $0.15 exercisable for a period of two years from the date of closing to acquire such number of common shares of the Company as is equal to 8% of the aggregate number of Flow-Through Shares and Units issued under the Offering.

The Offering is scheduled to close on or about February 27, 2013 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange. All securities issued pursuant to the Offering will be subject to a four month and one day hold period from the date of closing of the Offering.

The net proceeds from the Units shall be used for exploration working capital and for general corporate purposes. Proceeds from the Flow-Through Shares will be used to advance Geovencap's California Lake and Upsalquitch projects, which will constitute Canadian exploration expenses (as defined in the Income Tax Act (Canada)) and will be renounced for the 2013 tax year.

About Geovencap

GeoVenCap is a mineral company focused on exploration principally for silver and gold in northern New Brunswick. Its priority is to explore and develop four highly prospective projects located between 30 and 105 km west and southwest of the city of Bathurst, New Brunswick: the California Lake Silver Project, the Upsalquitch Gold Project, the Williams Brook Gold Project and the Bathurst Mining Camp - Base Metal Project. These projects are in close proximity of mines and advanced projects owned by Xstrata, Votorantim and Trevali Mining.

Forward-Looking Statements

This news release contains discussion of items that may constitute forward-looking statements within the meaning of securities laws that involve risks and uncertainties. Such statements include those with respect to the Company's ability to raise funds under the Offering. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Such assumptions, which may prove incorrect, include the following: (i) the Agent will fulfill its contractual obligations to complete the Offering on a "best-efforts" basis, (ii) the Agent will be successful in its efforts to identify subscribers under the Offering, (iii) the subscribers under the Offering will complete the subscriptions they have agreed to make under their subscription agreements, (iv) Geovencap's management will not identify and pursue other business objectives using the proceeds of the Offering and (v) the price of gold, silver and other metals will remain sufficiently high and the costs of advancing the Company's gold projects sufficiently low so as to permit Geovencap to implement its business plans in a profitable manner. Factors that could cause actual results to differ materially from expectations include (i) the inability or unwillingness of the subscribers under the Offering or of the Agent to fulfill their contractual obligations, in whole or in part, (ii) the Company's failure to make effective use of the proceeds of the Offering, (iii) the Company's inability to obtain the necessary regulatory approvals for the Offering, (iv) a decrease in the price of gold, silver and other metals below what is necessary to sustain the Company's operations, (v) an increase in the Company's operating costs above what is necessary to sustain its operations, (vi) accidents, labour disputes or the materialization of similar risks, (vii) a deterioration in capital market conditions that prevents the Company from raising the funds it requires on a timely basis and (viii) generally, the Company's inability to develop and implement a successful business plan for any reason. These factors and others are more fully discussed in the Company's filings with Canadian securities regulatory authorities available at Actual results may vary from the forward-looking information.

"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 release."

SOURCE: GeoVenCap Inc.

For further information:

Leon Methot
President and Chief Executive Officer
(514) 868-9408 x255

Profil de l'entreprise

GeoVenCap Inc.

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