Another blow to Peggy Kent and Century Mining...BIG investor sides with SUE!
Sulliden announces $2.25 million private placements and one for ten rights issue
Monday March 31, 10:39 am ET
TORONTO, March 31 /CNW/ - Sulliden Exploration Inc. (TSX: SUE - News) is pleased to announce it has agreed to a non-brokered private placement of 5,714,286 Units at a unit issue price of C$0.35 per Unit for gross proceeds of C$2 million, and a separate issuance to certain insiders and other parties of 715,000 shares at an issue price of $0.35 per share for proceeds of $250,250 and is planning to proceed with a one for ten rights issue to all shareholders immediately following the closing of the placements. All of the foregoing transactions are subject to regulatory approval.
$2 Million Private Placement with Stan Bharti and Aberdeen International
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Inc.
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The Company has agreed to the private placement of $2 million with Stan Bharti and Aberdeen International Inc. ("Aberdeen"). Aberdeen is a publicly-traded (TSX "AAB") global resource investment and merchant banking company focused on small cap companies in the resource sector. Aberdeen has a highly experienced management team with a global network and proven track record of success in the Mining and Resource sector, raising and financing over $1 billion during the last five years. Mr. Bharti serves as executive Chairman of Aberdeen. Mr. Scott Moore, the VP of Corporate Development of Aberdeen will join the Board of Directors of Sulliden.
Each Unit issued will comprise one common share and one warrant. Each warrant will entitle Aberdeen to purchase one common share of the Company at an exercise price of C$0.45 per common share for a period of 24 months. Notwithstanding the noted term, if the closing price of the common shares of the Company trading on the Toronto Stock Exchange ("TSX") is $0.75 or higher for 20 consecutive trading days, the Company may accelerate the expiry date of the warrants by giving notice to the warrant holder who will have 40 business days to exercise, failing which their warrants will automatically expire.
The common shares and warrants forming part of the Units are all subject to a four month hold period.
"We welcome the investment from Aberdeen and Stan Bharti with their extensive industry experience, particularly in South America, and we also look forward to the contribution of Scott Moore as a Director of Sulliden" said John Kearney, President and CEO of Sulliden. "This transaction represents a strong endorsement of the value and potential of our core Shahuindo property" he added.
Issuance to Insiders and Others
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Subject to completion of above noted private placements with Aberdeen, the Company will simultaneously issue a total of 715,000 shares at a deemed issue price of $0.35 per share to a group of 14 individuals comprising directors, officers, employees and other service providers of Sulliden.
One for Ten Rights Issue
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The Directors have been encouraged by expressions of support received from many existing Sulliden shareholders and believe that the most appropriate way to raise the necessary financing for the Company is to give all existing shareholders the opportunity to participate in such financing by way of a rights issue.
Accordingly, Sulliden proposes to issue rights (the "Rights") to eligible shareholders, on the basis of one transferable Right for each share currently held, to subscribe for additional shares on the terms set forth in a rights offering circular to be mailed to shareholders upon receipt of regulatory approval. Each shareholder will receive one Right for each share held. Ten Rights will entitle the holder to purchase one new share at a price to be determined following receipt of approval of the Rights issue by the appropriate regulatory authorities. Sulliden currently has 72,607,144 shares outstanding and will add 6,429,286 upon closing of the above mentioned private placements. If all Rights are exercised, the Rights Offering will result in the issuance of up to 7,903,643 new shares.
Shareholders who exercise all their rights to purchase new shares will also have a secondary subscription privilege to purchase, on a pro rata basis, any shares not purchased in the first instance by other shareholders.
Completion of the Rights issue is subject to all necessary regulatory approvals. A Rights Offering Circular will be sent to shareholders as soon as possible.
Use of Proceeds and Outlook
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Proceeds from the private placement and Rights issue will be used to finance the Company's ongoing legal expenses incurred in defense of Sulliden's ownership of the Shahuindo property, further exploration of the Shahuindo property as summarized below and general working capital purposes.
Sulliden plans to continue its strategy of ongoing exploration of the Shahuindo property, diligent and strenuous defense of Sulliden's ownership of Shahuindo, and the pursuit of all rational options to end the litigation in a timely manner. Subject to the availability of funds and the grant of permits, an aggressive exploration program is contemplated during 2008. Sulliden has three main objectives for the next stages of exploration work at Shahuindo:
1. Bring the Main Zone to the feasibility study stage by implementing a
detailed in-fill drilling program that should lead to a more accurate
resource calculation and at the same time potentially increase the
contained gold and silver. After this work is completed a feasibility
study of the Main Zone as a "stand alone" mining operation would be
undertaken by a recognized independent consulting firm, which study
would form the basis for project financing to facilitate the
construction of a mine and the commencement of gold and silver
production from Shahuindo.
2. Undertake a systematic drilling campaign in the new NW extension that
was identified during the 2007 program. This next stage drilling
program would have the objective to add additional gold and silver
resources outside the Main Zone. If successful the discovery and
identification of additional potential ounces would increase and
enhance the "stand-alone" Main Zone mine.
3. Undertake an aggressive follow up exploration program of the new
geochemical and geophysical targets that were identified during the
2007 program and which are located outside the Main Zone. This
program would consist of systematic trench sampling, detailed
geological and geochemical surveys and reconnaissance drilling.
Executing this three-part program in 2008 could open new potential ore zones that would bring the Shahuindo project towards or into "world class" status and closer to production, which should significantly enhance the value of Sulliden shares.
ABOUT SULLIDEN:
Sulliden Exploration Inc. is a mineral exploration company focused on the development of its Shahuindo gold and silver Project. The Shahuindo project is located in northern Peru, in one of the world's most prospective gold and silver regions, sitting approximately 25 km north of Barrick's Laguanas Norte-Alto Chicama 1,100,000 oz/gold per year mine; 70 km south of Newmont's multi-million oz/gold Yanacocha district and 200 km north of Barrick's Pierina 650,000 oz/gold per year mine.
The Shahuindo resource stands at 38 million tonnes grading 0.95 g/t Au and 22.99 g/t Ag, containing 1.2 million oz of gold and 28 million oz of silver (equivalent to 1.6 million oz of gold at a gold to silver ratio of 1:60) in the Indicated Category; and 17.2 million tonnes grading 0.62 g/t Au and 12.83 g/t Ag, containing 342,000 oz of gold and 7 million oz of silver (equivalent to 460,000 oz of gold at a gold to silver ratio of 1:60) in the Inferred Category - (Resource Estimation - Met-Chem Canada Inc. April 2005 filed on www.sedar.com). |
