Silver Quest Announces $10 Million Private Placement
VANCOUVER, June 28, 2011 /CNW/ --
NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
VANCOUVER, June 28, 2011 /CNW/ - Silver Quest Resources Ltd. (SQI-TSX.V) (the 'Company') is pleased to announce that it has entered into an
agreement with a syndicate led by Paradigm Capital Inc. and including
Stonecap Securities Inc. and Scotia Capital Inc. (the 'Agents') in
respect of a private placement financing to be undertaken on a best
efforts basis for gross proceeds of up to C$8,002,000 (the 'Brokered
Offering'). The Brokered Offering will consist of up to 4,000,000 units
(the 'Units') at a price of C$1.00 per Unit and up to 3,480,000 common
shares to be issued as 'flow-through' shares for the purposes of the Income Tax Act (Canada) (the 'Flow-Through Shares') at a price of C$1.15 per
Flow-Through Share. In addition, the Company will complete a
non-brokered private placement of Units for gross proceeds of up to
C$2,000,000 (the 'Non-Brokered Offering).
Each Unit will consist of one common share ('Common Share') of the
Company and one-half of one common share purchase warrant (each whole
warrant being a 'Warrant') of the Company. Each Warrant will entitle
the holder thereof to purchase one Common Share at C$1.30 and will be
exercisable for a period of 18 months after the closing date.
The Units and Flow-Through Shares are collectively referred to herein as
the 'Offered Securities'.
The Company has granted the Agents an option, exercisable up to 48 hours
prior to the closing of the Brokered Offering, to sell up to an
additional number of Offered Securities equal to 15% of the Offered
Securities sold under the Brokered Offering.
Upon closing, the Agents shall receive a commission paid in cash equal
to 6% of the proceeds raised from the Brokered Offering. In addition,
the Agents shall receive compensation options entitling the Agents, for
a period of 18 months from the closing date, to acquire that number of
Common Shares of the Company that is equal to 6% of the number of
Offered Securities sold pursuant to the Brokered Offering (the
'Compensation Options'). Each Compensation Option will be exercisable
to purchase one Common Share of the Company at a price of C$1.15. The
Company will also pay a finder's fee to an arm's length third-party in
respect of the Non-Brokered Offering. Such finder's fee will be
comprised of cash equal to 6% of the proceeds raised from the
Non-Brokered Offering and Compensation Options equal to 6% of the
number of Offered Securities sold pursuant to the Non-Brokered
Offering.
The net proceeds from the private placements will be used by the Company
for exploration at its Davidson, Capoose, 3Ts and Yukon properties and
for general corporate purposes. The gross proceeds received by the
Company from the subscribers for the issuance of the Flow-Through
Shares will be used, pursuant to the provisions in the Income Tax Act (Canada), to incur Canadian Exploration Expenses which will be
renounced in favour of the subscribers for the taxation year ending
December 31, 2011.
Closing of the private placements is anticipated to occur on or before
July 19, 2011 and is subject to the receipt of applicable regulatory
approvals including approval of the TSX Venture Exchange. The
securities issued will be subject to a standard four month hold period.
SILVER QUEST RESOURCES LTD.
'Randy Turner'
Randy Turner, President
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
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Investor Relations at 604-687-3959 or info@silverquest.ca