/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION
IN THE UNITED STATES/
TORONTO, June 11 /CNW/ - Geoinformatics Exploration Inc. (TSX-V: GXL)
("Geoinformatics" or the "Company") announces that it has conditionally agreed
to a private placement for gross proceeds of $25 million with Geologic
Resource Partners LLC ("GRP") of Boston, Massachusetts. In addition, the
Company will pursue an additional brokered private placement of up to
$7 million within the next 90 days.
GRP is the investment manager for several Geologic Resource funds
(collectively, "GRF"), which hold 24,091,315 common shares of Geoinformatics
(approximately 17.4% of the common shares currently outstanding).
Under the GRP private placement, GRP will subscribe for 156,250,000
common shares of Geoinformatics at a price of $0.16 per share, representing an
18.5% premium to the closing price of the Company's common shares on the TSX
Venture Exchange ("TSX-V") on June 10, 2008. Upon completion of the private
placement, GRF and GRP collectively will hold 180,341,315 common shares of the
Company, representing approximately 61.2% of the 294.8 million post-placement
outstanding shares, before consideration of any shares issued in the proposed
brokered private placement.
Geoinformatics will use the proceeds from the GRP private placement to
repay the entire principal amount of the Company's outstanding US$20 million
secured debentures held by GRF, to advance the Company's key resource
projects, and for working capital.
In conjunction with the GRP private placement, Geoinformatics has agreed
to appoint John C. Kanellitsas, Chief Operating Officer of GRP, and Rosie
Moore, a consultant to GRP, to the Company's board of directors effective
Shareholders of the Company will be asked to approve a consolidation of
its common shares conditional on completion of the GRP private placement, on
the basis of one new common share for each ten existing common shares. The
share consolidation will result in Geoinformatics having approximately
29.5 million shares outstanding.
"Completion of the Geologic Resource financing will significantly
strengthen Geoinformatics' balance sheet, eliminate $1 million in annual debt
service charges and put us on a sound financial footing so that we can
continue to advance our principal projects," commented Kevin L. Snook,
Chairman of Geoinformatics. "The board of directors has considered various
options to improve the Company's capital structure and fund our exploration
programs, including a shareholder rights offering, but concluded that this
placement would be the most effective way to advance the Company's interests
and we are pleased to have GRP's continued support."
George Ireland, Chief Investment Officer of GRF said, "Geologic Resource
Partners has been a long-term investor in Geoinformatics. During this period,
we have watched its exploration team make several significant discoveries and
project acquisitions, including Whistler in Alaska, La Noria in Mexico and
Falcon in British Columbia, through its advanced approach to mineral resource
targeting. In spite of the value we believe Geoinformatics has created, the
market continues to discount the Company's shares. We believe that the further
funding of Geoinformatics' exploration programs, coupled with the resolution
of the convertible debt issue and clear articulation of the Company's
strategy, including the share consolidation, will allow the market to see more
clearly the value in the Company."
The GRP private placement requires shareholder approval under the
policies of the TSX-V. In addition, since the GRP private placement
constitutes a "related party transaction", minority shareholders of
Geoinformatics, specifically shareholders other than GRF, must also approve
the GRP private placement, which will be presented to shareholders at the
Company's upcoming Annual and Special Meeting to be held on July 11, 2008 (the
"Meeting"). The private placement is exempt from the formal valuation
requirements of securities laws as the Company's common shares are listed only
on the TSX-V. Letters of transmittal allowing shareholders to exchange their
existing share certificates for the new consolidated share certificates will
be mailed to shareholders with the proxy materials for the Meeting on or about
June 16, 2008. The Company intends to maintain the name Geoinformatics
Exploration Inc. post-consolidation.
The closing of the GRP private placement and completion of the share
consolidation are conditional upon: shareholder approval (as described above);
approval of the TSX-V; satisfactory completion of due diligence by GRP
including the sufficiency of the GRP private placement to achieve certain
operating milestones on the Company's key projects and the acquisition of an
irrevocable 100% interest in the Whistler Project; execution of amended
employment agreements with key management personnel; and other conditions
typical of such private placements.
Geoinformatics is a North American-focused exploration company with
mineral resources and discoveries in Alaska, Nevada, Utah, British Columbia
and Mexico. On January 9, 2008, the Company announced an independent National
Instrument 43-101 ("NI 43-101") mineral resource estimate containing an
Indicated Resource of 840,000 ounces of gold and an Inferred Resource of
2.7 million ounces of gold in one area at the Whistler Project in southern
Alaska. Significant copper and silver mineralization increases the Indicated
gold-equivalent mineral resource to 1.3 million ounces and the Inferred
gold-equivalent mineral resource to 4.4 million ounces. 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. The resource estimate and technical
report for the project was completed by George Wahl, an Associate Principal
Resource Geologist with SRK Consulting (Canada) Ltd. ("SRK") and reviewed by
Dr. Jean-Francois Couture, P.Geo, of SRK. By virtue of their academic
backgrounds and professional experience, Mr. Wahl and Dr. Couture are all
"qualified persons" as defined by NI 43-101.
In addition to the Whistler Project, Geoinformatics also holds several
advanced stage exploration projects in Mexico, Utah, the Cortez Trend region
of Nevada, and British Columbia.
About Geologic Resource Partners
Geologic Resource Partners, LLC (GRP) 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, and he leads a team of investment
professionals with collectively over 100 years of investment and operating
experience in the metals resource sectors.
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. 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
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: Mr. Kevin L. Snook, Chairman, Tel: (416)
861-1300 x226, Email: email@example.com; Dr. Nick Archibald, Chief
Executive Officer, Tel: (416) 861-1300 x224, Email: firstname.lastname@example.org,
Geoinformatics Exploration Inc., 330 Bay Street, Suite 1109, Toronto, Ontario,
M5H 2S8, www.geoinformex.com; Mr. John Kanellitsas, Chief Operating Officer,
Geologic Resource Partners, 535 Boylston Street, Top Floor, Boston, MA, 02116,
Tel: (617) 424-9900