Sprott Resource Corp. Announces Secondary Offering of Common Shares in Stonegate Agricom Ltd.
TORONTO, February 15, 2011 (TSX: SCP) – Sprott Resource Corp. (“SRC”) announced today that it and Stonegate Agricom Ltd. (“Stonegate”) have entered into an agreement (the “Agreement”) with GMP Securities L.P., as lead underwriter and on behalf of a syndicate of underwriters (the “Underwriters”), to compete a secondary offering on a bought deal basis. Under the Agreement, the Underwriters have agreed to purchase 25,000,000 common shares (the “Common Shares”) of Stonegate from SRC at a purchase price of $1.75 per Common Share for gross proceeds of $43,750,000. In addition, SRC has granted the Underwriters an over-allotment option, exercisable for a period of 30 days from the closing, to purchase up to an additional 3,750,000 of Common Shares SRC owns, representing 15% of the Common Shares sold by SRC.
SRC currently holds 75,662,000 Common Shares, representing a 54% interest in Stonegate on an undiluted basis. After giving effect to the offering, but before giving effect to the over-allotment option, SRC will hold 50,662,000 Common Shares, representing a 36% interest in Stonegate on an undiluted basis.
A preliminary short-form prospectus relating to the offering will be filed shortly with Canadian securities regulatory authorities. The transaction is expected to close on or about March 9, 2011. Closing is subject to a number of customary conditions including receipt of all necessary regulatory approvals.
This press release does not constitute an offer to sell or an offer to buy any securities of Stonegate in any jurisdiction in which such offer, solicitation or sale would be unlawful. These 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 in the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws or pursuant to an exemption therefrom.
About Sprott Resource Corp.
SRC is a Canadian based company, the primary purpose of which is to invest, directly and indirectly, in natural resources. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting Limited Partnership (”SCLP’”), of which Sprott Inc. is the sole limited partner. Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services. For more information, please visit www.sprottresource.com. |
