Rob McEwen and McEwen Mining acquire 18.8% of Canadian miner
Great Bear Resources Ltd. (GBR:TSX.V) will be conducting a private placement financing of units, priced at $1.45 per unit, for gross proceeds of up to $10 million with each unit consisting of one common share and one-half of one common share purchase warrant. Each whole warrant will be exercisable into a common share of Great Bear at a price of $1.75 for a period of two years, the company said in a news release.
The company also announced that Rob McEwen has agreed to purchase $4.8 million of the financing and that McEwen Mining Inc. has agreed to purchase $1.2 million of the financing for a total of $6 million. On completion of the financing, Mr. McEwen and McEwen Mining will collectively own 18.8% of Great Bear Resources on a partially diluted basis.
"We are very pleased to have Rob McEwen as a partner of Great Bear Resources. His record of success in the Red Lake district is quite simply unmatched," said Chris Taylor, president and chief executive officer of Great Bear. "We will now be funded to achieve significant milestones at our Dixie project, and anticipate positive opportunities for our shareholders as we advance these new high-grade gold discoveries."
"I'm excited to join the Great Bear team in the development of what I believe could be a significant new gold discovery in the Red Lake camp," added Rob McEwen. "Their technical work is excellent and I'm delighted to join forces with them to further unlock, once again, the riches of the world-class Red Lake gold camp."
The company will use the proceeds from the financing for exploration and drilling in Red Lake, Ontario, as well as for general working capital purposes, stated Great Bear.
IBK Capital Corp. of Toronto will broker a portion of the financing including units to be purchased by Mr. McEwen and McEwen Mining. Great Bear agreed to pay IBK a cash commission equal to 6% of the amount raised by IBK and will issue to IBK broker warrants equal to 6% of the number of units sold to investors introduced by IBK.
"Each broker warrant will be exercisable into a unit at $1.45 per unit for a period of one year," said the company. "Finders' fees may be payable on the non-brokered portion of the financing on the same basis as the brokered portion of the financing."
The financing will be subject to all necessary regulatory approvals, including acceptance by the TSX Venture Exchange. The securities issued in the financing will be subject to a hold period of four months in accordance with applicable Canadian securities laws.
On August 22, Great Bear announced a high-grade discovery at its Dixie Project in the Red Lake District, drilling 16.35 meters of 26.91 g/t gold and 7m of 44.g/t gold in the Hinge Zone.
Read Streetwise Report's interview with Rob McEwen conducted before today's announcement: Rob McEwen: Trade Wars, the Dollar and Precious Metals.
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