/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR
FOR DISSEMINATION IN THE UNITED STATES/
TORONTO, Aug. 9 /CNW/ - (TSX:SGA) Australian Solomons Gold Limited (the
"Company" or "ASG") is pleased to announce that it has closed its previously
announced brokered private placement of 13,044,000 subscription receipts (the
"Subscription Receipts") at a price of $1.15 per Subscription Receipt raising
gross proceeds of $15,000,600 (the "Offering"). Each Subscription Receipt
shall be exchanged, for no additional consideration, into one common share (a
"Share") of the Company and one-half of one warrant, with each full warrant (a
"Warrant") providing the purchaser with the right to subscribe for one Share
for a period of 36 months following the close of the Offering at a price of
$1.50 per Share upon satisfaction of the "Release Conditions" discussed
The Subscription Receipts were offered on a best efforts agency basis by
a syndicate of agents co-led by Haywood Securities Inc. and Paradigm Capital
Inc. and including Fraser Mackenzie Limited (collectively, the "Agents").
The Company has placed a percentage of the proceeds in escrow (the
"Escrowed Funds"), and has agreed to use reasonable best efforts to qualify
the Shares and Warrants by a prospectus, and to obtain shareholder approval
with respect to the Offering (collectively, the "Release Conditions"). In the
event that the Release Conditions are not satisfied within 60 days of the
closing date of the Offering, 35% of the Subscription Receipts shall be deemed
to be exercised, and purchasers of the Subscription Receipts will be entitled
to their pro rate share of the Escrowed Funds.
The Agents received a cash fee equal to $720,463.51, 65% of which has
been placed in escrow and forms part of the Escrowed Funds. As additional
consideration, the Agents have also been issued 219,272 compensation options
("Compensation Options"), with each Compensation Option entitling the holder
thereof to purchase one Share of the Company at an exercise price of $1.27 per
Share for a period of 18 months following the closing date of the Offering.
The Agents will receive an additional 407,218 Compensation Options upon
satisfaction of the Release Conditions by the Company.
All securities issued or issuable in connection with the Offering are
subject to a hold period and may not be traded for four months plus one day
from the date of closing.
The net proceeds of the Offering will be used to fund continued
exploration, preliminary development activities for the Gold Ridge Project,
for working capital and general corporate purposes.
The Gold Ridge Mine is a past producing mine which has approximately 1.5
million ounces of measured and indicated resources and in excess of 1.0
million ounces of reserves. The completed feasibility study for the Gold Ridge
Mine estimates production at life of mine an average of 124,000 ounces per
year at cash costs of approximately US$388 per ounce. The additional time now
available will allow the Company the opportunity to further review and
optimize the results of the feasibility study. Production from the Gold Ridge
Project is now estimated to commence by the end of calendar 2008. The Company
has made considerable progress to date with preliminary development
activities, including for example the camp, for use during construction and
operations, which has now been completed. Other equipment such as a large
mobile crane, essential to the refurbishment, has been delivered to the
project site. A procurement schedule for key equipment items needed for the
refurbishment is under consideration. The relocation village for the
landowners of the area has been surveyed, designed and, as soon as the
government has formalized the legal title for the new area, construction of
the houses and community infrastructure such as schools and first aid posts
will commence. The Corporation now intends to focus on continuing exploration
in the Charivunga Gorge and surrounding areas while pushing ahead with the
preplanning and early development stages of the refurbishment of the
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, U.S.
persons absent U.S. registration or an applicable exemption from the U.S.
registration requirements. This release does not constitute an offer for sale
of securities in the United States.
Cautionary Statement Regarding Forward-Looking Information
All statements, trend analysis and other information contained in this
press release relative to markets for ASG's trends in resources, recoveries,
production and anticipated expense levels, as well as other statements about
anticipated future events or results constitute forward-looking statements.
Forward-looking statements are often, but not always, identified by the use of
words such as "seek", "anticipate", "believe", "plan", "estimate", "expect"
and "intend" and statements that an event or result "may", "will", "should",
"could" or "might" occur or be achieved and other similar expressions.
Forward-looking statements are subject to business and economic risks and
uncertainties and other factors that could cause actual results of operations
to differ materially from those contained in the forward-looking statements.
Forward-looking statements are based on estimates and opinions of management
at the date the statements are made. Some of these risks, uncertainties and
other factors are described under the heading "Risk Factors" in the Company's
annual information form available on www.sedar.com. ASG does not undertake any
obligation to update forward-looking statements even if circumstances or
management's estimates or opinions should change. Investors should not place
undue reliance on forward-looking statements.
The Toronto Stock Exchange has neither approved nor disapproved the
contents of this press release
For further information:
For further information: ASG: John Bovard, CEO, +617 3624 9003 (office)
or cell +61 (0)423 607290, firstname.lastname@example.org. Please note that
the Head Office of ASG is located in Queensland, Australia and is 14 hours
ahead of Toronto time. Investor Relations: Martti Kangas, (416) 815-0700 x
243, email@example.com; Michael Joyner, (416) 815-0700 x 275,
firstname.lastname@example.org - The Equicom Group, Toronto, Canada