Rainy Mountain Royalty (RMO-V) Jan 24, '17 is pleased to announce that it will be offering rights to holders of its common shares resident in Canada at the close of business on the record date of January 30, 2017, on the basis of one right for each common share held. Two rights will entitle the holder to subscribe for one unit of the Company (a “Unit”) at a subscription price of $0.10. A total of 26,594,113 rights will be issued. Each Unit will consist of one common share and one-half of one share purchase warrant, with each whole warrant (a “Warrant”) exercisable into one common share for a period of 24 months from the issuance date of the Units at a price of $0.15 for the first 12 months and at an exercise price of $0.25 thereafter. The rights will trade on the TSX Venture Exchange under the symbol RMO.RT commencing on January 26, 0217 and will expire at 2:00 p.m. (Vancouver time) on February 24, 2017 (the “Expiry Time”), after which time unexercised rights will be void and of no value. Shareholders who fully exercise their rights will be entitled to subscribe for additional Units, if available as a result of unexercised rights prior to the Expiry Time, subject to certain limitations set out in the Company’s rights offering circular.
Details of the Rights Offering
Details of the rights offering will be set out in the rights offering notice and rights offering circular which will be available under RMO’s profile at www.sedar.com. The rights offering notice and accompanying rights certificate will be mailed to each eligible shareholder of the Company as at the record date. Registered shareholders who wish to exercise their rights must forward the completed rights certificate, together with the applicable funds, to the rights agent, TSX Trust Company, on or before the Expiry Time. Shareholders who own their common shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary. Rights delivered to brokers, dealers or other intermediaries will not be delivered by those intermediaries to beneficial shareholders who are residents in a jurisdiction outside of Canada (“Ineligible Jurisdictions”).
The Company currently has 26,932,875 common shares outstanding, however, as rights will only be issued to shareholders resident in Canada a total of 26,594,113 rights will be issued. A minimum of 5,000,000 Units (the “Minimum Offering”) and a maximum of 13,297,056 Units will be issued under the rights offering. If all the rights issued under the rights offering are validly exercised, the offering will raise gross proceeds of approximately $1,329,705, the net proceeds of which will be used for exploration and development of the Company’s Brunswick Property, as well as for general working capital requirement.
Any person who will own or control (beneficially or as nominee) more than 10 percent of the outstanding common shares of RMO at closing of rights offering must file a Personal Information Form (“PIF”) with the TSX Venture Exchange (the “Exchange”) and the rights offering will only close in escrow until the Exchange has notified the Company that the results of the review of the relevant PIFs are satisfactory.
Soliciting Dealer and Standby Commitment
In connection with the rights offering, the Company has entered into a soliciting dealer and standby guarantee agreement (the “Standby Agreement”) with Mackie Research Capital Corporation (“MRCC”). Under the Standby Agreement, MRCC will use commercially reasonable efforts to assist the Company in soliciting the exercise of rights. MRCC has also agreed to a stand-by commitment whereby it will purchase up to but not exceeding $500,000 worth of Units (the “Standby Guarantee”). The Company has also granted MRCC the right to purchase (the “Top-up Right”) such number of Units that is equal to the number of Units for which the Company has not received subscriptions by the Expiry Time (the “Offering Shortfall”). The Top-up Right may be exercised by MRCC, in its sole discretion in whole, or in part, or not at all.
The Company will pay MRCC a corporate finance fee of $17,500 plus disbursements and applicable taxes, and a cash commission of 8% of the gross proceeds raised under the rights offering (the “Commission”) excluding any proceeds raised as a result of the Standby Guarantee or as a result of Mackie’s exercising the Top-up Right. The Company will also grant MRCC broker warrants (“Broker Warrants”) entitling MRCC to acquire that number of Units equal to 25% of the number of Units distributed pursuant to the rights offering for proceeds of up to $500,000 and 10% of the remaining number of common shares distributed pursuant to the rights offering, with each Broker Warrant exercisable at $0.135 to acquire one common share for a period of 24 months from the date of the closing of the rights offering.
For further information, contact Mr. Clive Shallow, Shareholder Communications, at 604-922-2030, or visit the Company’s website at www.rmroyalty.com.
RAINY MOUNTAIN ROYALTY CORP.
“Douglas L. Mason”
_________________________________
Douglas L. Mason, Chief Executive Officer |
