UMG Engages Pope & Company as Agent for Up to $8,000,000 Financing
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/01/10 -- United Mining Group, Inc. (the 'Company') (TSX: UMG)(OTCQX: UMGZF)(FRANKFURT: UM8) announces that it has entered into an engagement agreement with Pope & Company Limited (the 'Agent') to raise up to $8,000,000 by way of a commercially reasonable best efforts private placement (the 'Private Placement'). The Private Placement provides further funding for the Company's ongoing work program, primarily on the Crescent Mine, and for general corporate purposes.
The Private Placement will consist of the issuance of up to 8,888,888 units ('Units') at a price of $0.90 per Unit (the 'Unit Price'). Each Unit consists of one common share (a 'Common Share') and one half of one common share purchase warrant (a 'Warrant'). Each whole warrant entitles the holder thereof to purchase one additional Common Share (a 'Warrant Share') of the Company at a price of $1.25 per Warrant Share for a period of two (2) years from the closing date of the Private Placement.
In the event that the Common Shares of UMG are traded on the Toronto Stock Exchange ('TSX') at a daily volume weighted average price of $1.75 or more for 15 trading days out of any 20 consecutive trading days prior to the Expiry Date (the 'Acceleration Event'), the Warrant will expire on the earlier of the Expiry Date and 4:30 p.m. (Pacific Time) on the date which is 30 calendar days after UMG provides notice to the holders of the Warrant that the Acceleration Event has occurred, provided that such notice cannot be provided until the four month hold period has expired
The Company will pay the Agent a cash commission of 7% of the number of Units sold under the Private Placement. In addition, the Agent will, upon closing, receive agent's warrants ('Agent's Warrants') equal in number to 7% of the number of Units sold under the Private Placement. Each Agent's Warrant will entitle the Agent to purchase one Common Share at the price the greater of either the Unit Price or the lowest price permitted by the TSX for a period of two (2) years from the closing date of the Private Placement.
Charles Pitcher, CEO of UMG, commented, 'Pope & Company is an excellent partner to assist UMG with the equity raise currently under way as well as in the longer term, to help us grow the business. They bring both a strong distribution network and excellent investment banking advice.'
The Private Placement is scheduled to close on or about December 17, 2010 and is subject to a number of conditions including receipt of all necessary corporate and regulatory approvals, including the approval of the TSX. All securities issued in connection with the Private Placement will be subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities law legislation.
About United Mining Group
United Mining Group is a profitable, vertically integrated mining company with operations in Idaho, USA. The Company offers a full suite of mining services including contract mining to silver miners in the district. The Company owns its own custom welding and fabrication shop allowing it to repair/rebuild equipment for its own use and for outside mining companies.
The Company is currently earning, through development and operations, an 80% interest in the Crescent Silver Mine adjacent to the Sunshine Silver Mine in the Silver Valley. The Crescent Mine has historically produced 25 million ounces of silver at an average grade of 27.3 opt (SRK Consulting 43-101 report, March 1, 2010). UMG currently has an indicated resource of 6.1 million ounces silver (324,000 tons grading 18.7 opt silver) and additional inferred resources of 4.1 million ounces silver (211,000 tons grading 19.5 opt silver).
UMG is committed to building a senior silver-producing mining company based on aggressive exploration and development of the highly-prospective current land position at Crescent and through the acquisition of additional silver interests.
For more information about the Company, please visit: www.unitedmininggroup.com.
On behalf of the board of directors of United Mining Group, Inc.,
Charles Pitcher, Chief Executive Officer
FORWARD LOOKING STATEMENTS: This press release contains forward-looking statements, which address future events and conditions, which are subject to various risks and uncertainties. Forward looking statements in this press release include that we can close a brokered private placement, that we are building a senior silver-producing mining company, that we will have aggressive exploration and development of our current land position at Crescent, that our land is the highly-prospective for mining and that we will make acquisitions of additional silver interests. The Company's actual results and financial position could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. These factors include: results of exploration activities and development of mineral properties, fluctuations in the marketplace for the sale of minerals, the inability to implement corporate strategies, the inability to obtain financing, currency fluctuations, general market and industry conditions and other risks disclosed in the Company's filings with Canadian Securities Regulators. Past production of minerals and encouraging exploration results are not necessarily indicative of a commercially exploitable resource.
Forward-looking statements are based on the expectations and opinions of the Company's management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
The TSX Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.
Contacts:
United Mining Group, Inc.
Greg Stewart
President & Chief Operating Officer
208.682.9018
gstewart@unitedmininggroup.com
www.unitedmininggroup.com