VANCOUVER, June 19 /CNW/ - Underworld Resources Inc. (the "Company")
(UW-TSX:V) is pleased to announce that it has closed the previously announced
private placement with a syndicate of agents led by Canaccord Capital
Corporation and including Axemen Resource Capital and Dundee Securities
Corporation (the "Agents") comprising a total of 10,000,000 units (the
"Units") at a price of $1.25 per Unit and 2,415,000 flow-through units ("FT
Units") at a price of $1.45 per FT Unit for total gross proceeds of
$16,001,750 (the "Offering").
Each Unit consists of one common share and one-half of one transferable
common share purchase warrant ("Unit Warrant"). Each whole Unit Warrant will
entitle the holder to subscribe for one additional common share at a price of
$1.60 for a period of one year from the date of closing. Each FT Unit consists
of one flow-through common share and one-half of one transferable common share
purchase warrant ("FT Warrant"). Each whole FT Warrant will entitle the holder
to subscribe for one additional common share at a price of $1.65 for a period
of one year from the date of closing.
In the event that after four months and one day after the closing, the
volume weighted average trading price of the Company's common shares on the
TSX Venture Exchange for a period of 15 consecutive trading days exceeds
$2.00, the Company may, within five days after such an event, provide notice
to the warrant holders of early expiry and thereafter, the Unit Warrants and
the FT Warrants will expire on the date which is 30 days after the date of the
notice to the warrant holders.
The Agents have been paid a cash fee equal to 6% of the gross proceeds
raised from the Offering and have been granted agent's warrants equal to 6% of
the number of Units and FT Units issued as part of the Offering. Each Agent's
Warrant will be exercisable for one non-flow-through common share for a period
of 12 months from closing at a price of $1.50.
One director of the Company purchased 15,000 Units in the Offering and,
as a result, securityholdings of insiders of the Company have increased.
Kinross Gold Corporation ("Kinross") subscribed for 1,200,000 Units of
the Offering. After giving effect to the Offering and the exercise of the
warrants, Kinross would hold 1,800,000 common shares which, together with the
2,718,181 common shares held by Kinross prior to the Offering, constitutes
11.1% of Underworld's outstanding common shares.
In addition to the brokered financing, Underworld has also completed the
previously announced non-brokered financing comprising a total of 400,000
Units at a price of $1.25 per Unit and 34,500 FT Units at a price of $1.45 per
FT Unit for total gross proceeds of $550,025. One finder was paid finder's
fees of $30,000 and received finder's warrants exercisable for 24,000 at a
price of $1.50 per share for a period of 12 months from closing.
The Company intends to use the funds raised from the issuance of the FT
Units for general exploration expenditures which will constitute Canadian
Exploration Expenditures ("CEE") on the Company's prospects located in the
Yukon Territory. The Company intends to use the funds raised from the issuance
of Units for general working capital purposes.
All securities issued under the brokered and non-brokered private
placements will be subject to a standard four-month hold period from the date
ON BEHALF OF THE BOARD OF DIRECTORS
Chairman & Director
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.
Some statements in this news release contain forward-looking information.
These statements include, but are not limited to, statements with respect to
the expected use of proceeds and exploration programs. These statements
address future events and conditions and, as such, involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by the statements.
Such factors include, among others, the amount of funds used and the timing
and success of exploration programs.
For further information:
For further information: Underworld Resources Inc., Suite 1500 - 409,
Granville Street, Vancouver, BC, Canada, V6C 1T2