Business & Finance
Business and Finance
Business and Finance
Wed, December 15, 2010 SUNWARD ANNOUNCES UP TO $51.3 MILLION FINANCING ANCHORED BY STRATEGIC INVESTOR
TSX-V: SWD
VANCOUVER, Dec. 15 /CNW/ - Mr. Philip O'Neill, Chief Executive Officer and Director of Sunward Resources Ltd. (the "Company" or "Sunward") (TSX-V: SWD), today announced that the Company has entered a definitive agreement for the sale, on a private placement basis, of a maximum of 38,000,000 Units and a minimum of 20,000,000 Units at a purchase price of $1.35 per Unit, for aggregate gross proceeds totalling a maximum of $51.3 million and a minimum of $27.0 million (all figures are in Canadian Dollars). Electrum Strategic Acquisitions LLC ("Electrum") will lead the financing by subscribing for a minimum of 18.15 million Units and a maximum of 36.15 million Units. The Company understands that Tocqueville Asset Management has also committed to subscribe for 1.85 million Units. Each Unit will consist of one common share of Sunward and one common share purchase warrant of Sunward ("Warrant") which entitles the holder thereof to acquire one common share of Sunward for an exercise price of $1.65 prior to the third anniversary of the closing date.
Electrum, a New York-based private company, is a member of the Electrum Group of Companies, which holds one of the largest and most diversified portfolios of precious metals exploration and development projects in the world. Upon closing of the proposed financing, Electrum would become one of Sunward's largest shareholders owning approximately 16.3% of the issued and outstanding common shares of the Company and approximately 23.2% on a fully-diluted basis, under the minimum envisioned case, and 28% of the issued and outstanding common shares of the Company and approximately 37.6% on a fully-diluted basis, if Electrum subscribes for the maximum 36.15 million units.
Said Mr. O'Neill: "The Electrum-Sunward strategic alliance recognizes the tremendous value of the Company's key asset - the 3.7-million-ounce, 100%-owned Titiribi gold and copper porphyry project in Antioquia, Colombia. Sunward will benefit from Electrum's exceptional track record of value creation as demonstrated by its contribution to such major companies as NovaGold Resources Inc. and Gabriel Resources Ltd., in which members of the Electrum Group of Companies are significant shareholders. This placement substantially strengthens Sunward's balance sheet and provides funding to advance the Titiribi project, facilitate closing of Company's earlier-announced acquisition of La Muriel Mining Corporation ("Murindo Project"), and allow the Company to pursue acquisition of additional highly prospective projects."
The definitive agreement between the Company and Electrum will give Electrum the right, for two years, to participate pro-rata in any future offering by Sunward of equity securities or any securities which are exercisable, exchangeable, or convertible into equity securities so long as Electrum owns 10% of the outstanding voting shares of the Company. In addition, Electrum will designate two individuals as nominees to the Company's Board of Directors so long as Electrum holds more than 20% of the issued and outstanding voting shares of the Company, and one individual as a nominee to the Company's Board of Directors so long as Electrum continues to hold the number of common shares acquired as part of the Units. The definitive agreement will contain a condition to closing that the Company's current significant shareholders enter into support agreements with respect to the foregoing.
The completion of the offering is scheduled to take place on or prior to January 13, 2011, and is subject to customary closing conditions, including approval of the TSX Venture Exchange, the delivery by the Company of customary legal opinions, and obtaining any required shareholder and regulatory approvals. The Company expects that any required shareholder approval can be satisfied through the written consents of holders of a majority of the Company's outstanding shares.
About the Titiribi Project:
The Cerro Vetas mineralized body at Sunward Resources' Titiribi project hosts an inferred resource of 230 million tonnes at an average grade of 0.5 grams per tonne gold and 0.2 percent copper using a 0.3-gram-per-tonne-gold cut-off (NI 43-101 technical report dated May 19, 2010).
The project is located approximately 70 kilometres southwest of the city of Medellin, Colombia, in Antioquia department, within the historical Titiribi mining district (estimated total gold production of three to five million ounces). Access is by paved highway from Medellin.
Mineralization at Titiribi is hosted within a number of porphyry stocks and porphyritic dikes and sills. The dominant mineral associated with mineralization is chalcopyrite, which occurs as disseminations and in veinlets. Plagioclase and secondary biotite are also significant within the mineralized assemblage. Mineralization appears to be related to extensive potassic alteration, with propylitic and argillic alteration also widespread, along with lesser phyllic alteration.
Over 36,000 metres of drilling has been completed at Titiribi to date, including approximately 14,600 metres completed historically by previous operators, including Gold Fields and Windy Knob Resources, along with more than 21,400 metres completed by Sunward Resources. The mineralized body at Cerro Vetas remains open in all directions and at depth. Sunward Resources currently has four drill rigs operating to expand mineralization at the Titiribi project.
About The Company:
Sunward Resources is a well-capitalized Canadian-based company focused on the exploration of gold/copper porphyry projects in Colombia. The Company has strong operational expertise in Colombia and is currently drilling its Titiribi Project southwest of Medellin with a goal of increasing the NI 43-101 inferred resource.
About Electrum:
Electrum Strategic Acquisitions LLC is a member of the privately-held Electrum Group of Companies which is involved in precious metals exploration and development around the world. Other members of the Electrum Group include Electrum Ltd., which holds one of the world's largest and most diversified exploration portfolios comprising over 100 projects located in 16 countries in the Americas, Africa, Asia and Eastern Europe; Electrum Strategic Holdings LLC, which owns a strategic stake in Gabriel Resources Ltd., the owner of 80.5% of the Rosia Montana gold project in Romania; Electrum Strategic Resources LLC, which owns a substantial interest in NovaGold Resources Inc., which owns a 50% interest in the 30 million ounce Donlin Creek deposit in Southwest Alaska; Electrum Strategic Exploration Ltd., which owns a strategic stake in Taung Gold Limited, a private company with major interests in gold exploration and development projects in the Witwatersrand District of South Africa; Silver Opportunity Partners LLC, the owner of the historic Sunshine Mine located in the Idaho Silver Valley; and Electrum USA Ltd., headquartered in Denver, Colorado, which manages the Electrum Group's exploration and development activities. Electrum Strategic Acquisitions LLC is located at 535 Madison Avenue, 11th Floor, New York, NY 10022.
This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of Sunward Resources Ltd. and its projects. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Sunward Resources Ltd. to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and Sunward Resources Ltd. disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
Neither 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.
