TRUE NORTH GEMS ANNOUNCES COMPLETION OF $1.37 MILLION FIRST TRANCHE OF $2.7 MILLION PRIVATE PLACEMENT
July 3rd, 2009 - Vancouver, British Columbia - True North Gems Inc. (the "Company") (TSX-V: TGX) announces that it has completed a first tranche of its previously announced non-brokered private placement for proceeds of $1.37 million. The Company issued 13,700,000 units at a price of $0.10 per unit, for aggregate gross proceeds of $1,370,000.
The Company has also entered into a unit purchase agreement with an investment group for the purchase of an additional 13,000,000 units at a price of $0.10 per unit, for aggregate gross proceeds of $1,300,000. A second closing related to this subscription is anticipated shortly and is conditional on TSX Venture Exchange approval. Details of the closing of the second tranche will be provided in a subsequent release.
Each unit is comprised of one common share and one common share purchase warrant, each warrant exercisable for one additional common share for a period of two years at a price of $0.20 per share. The warrants include a provision which entitles the Company to accelerate the warrants upon 21 days' prior notice in the event the closing price of the common shares of the Company is greater than $0.30 for ten or more consecutive trading days at any time after four months after the date of issuance of the warrants.
A total of five finders received finders' fees of in the aggregate $39,918 in cash and 274,383 finders' warrants in connection with the closing of the first tranche, each finders' warrant exercisable for one common share for a period of two years at a price of $0.10 per share.
The securities issued and issuable in the private placement are subject to a hold period and may not be traded until November 4, 2009, except as permitted by Canadian securities legislation and the TSX Venture Exchange.
The Company intends to use the proceeds of the private placement to conduct exploration on the Company's properties and for general working capital and other corporate purposes.
A total of seven directors and/or officers of the Company acquired in the aggregate 1,245,000 units in the first tranche of the private placement and, as a result, holdings of the directors and officers in the Company have increased.
Ronald J. Crowe of Edmonton, Alberta reports the purchase of 2,000,000 units of the Company at a price of $0.10 per unit in the private placement. Mr. Crowe reported ownership and control of 8,500,000 common shares and 2,287,000 common share purchase warrants of the Company prior to this private placement. The 10,500,000 common shares and 4,287,000 common share purchase warrants currently owned and controlled by Mr. Crowe represent approximately 14% of the issued capital of the Company, assuming Mr. Crowe's warrants are exercised. Mr. Crowe announces that he does not have any present intention to acquire ownership of or control over additional securities of the Company, but may increase or decrease his security holdings in the Company for investment purposes. A copy of the early warning report filed by Mr. Crowe is available under the Company's profile on the SEDAR website at www.sedar.com and may be obtained by contacting Mr. Crowe at 1901 10721 Saskatchewan drive, Edmonton, Alberta, T6E 6J5.
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