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AM Gold Increases Private Placement To $4.3 Million

June 29, 2011

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSIMINATION IN THE UNITED STATES

AM Gold Inc. (TSX-V: AMG; Frankfurt: AMX) (“AM Gold” or the “Company”) is pleased to announce that further to its news release of June 14, 2011 announcing a $3,500,000 brokered private placement, the Company has now increased the size of the private placement to included a non-brokered portion of up to $645,000 in flow-through common shares (the “Non-Brokered FT Shares”) at a price of $0.35 per Non-Brokered FT Share and up to $192,000 in units (the “Non-Brokered Units”) at a price of $0.32 per Non-Brokered Unit for additional proceeds of $837,000. The total offering is now for aggregate gross proceeds of up to $4,337,000 (the “Offering”).

Each Non-Brokered Unit will consist of one non flow-through common share in the capital of the Company (a “Common Share”) and one-half of a transferrable share purchase warrant (a “Warrant”). Each whole Warrant will entitle the holder thereof to purchase one Common Share at a price of $0.40 per Common Share for a period of 18 months following the closing of the Offering. If the Common Shares close for 20 consecutive trading days at a volume weighted average trading price above $0.75, the Company will have the right to require conversion of the Warrants at the exercise price therefor by providing a notice (the “Conversion Notice”) to the Warrant holders. Upon receipt of the Conversion Notice the holder must exercise the Warrants then held in accordance with their terms within 30 days of receipt of such notification (the “Conversion Deadline”), after which Conversion Deadline any unexercised Warrants will be deemed to have expired.

The Company may pay a cash finder’s fees equal to 6% of the gross proceeds raised on the sale of Non-Brokered FT Shares and/or Non-Brokered Units placed by eligible finders (the “Finders”) and will issue the Finders non-transferrable finder’s warrants (the “Finder’s Warrant”) equal to 6% of the aggregate number of Non-Brokered FT Shares and Non-Brokered Units placed by the Finders. The Finder’s Warrants will be subject to the same acceleration provisions as the Warrants comprising part of the Non-Brokered Units. The Company will also pay the agent for the brokered offering, Casimir Capital Ltd., a corporate finance fee in an amount up to $13,110.

Closing of the Offering is subject to a number of conditions including receipt of all necessary corporate and regulatory approvals, including the approval of the TSX Venture Exchange. All securities issued in connection with the Offering will be subject to a statutory hold period of four months and a day from the date of issuance in accordance with applicable securities law.

The gross proceeds from the sale of the Non-Brokered FT Shares will be used by the Company to incur Canadian Exploration Expenses (“CEE”) (within the meaning of the Income Tax Act (Canada) (the “ITA”)), which will qualify as “flow-through mining expenditures” for the purposes of the ITA, related to the exploration of the Company’s Red Mountain gold project in the Yukon Territory, Canada. The proceeds from the sale of the Non-Brokered Units will be used to fund the continued exploration of the Company’s Red Mountain gold project in Yukon Territory, Canada, the continued exploration and development of the Company’s Pinaya gold-copper project in southern Peru and for general working capital purposes.

About AM Gold Inc.

AM Gold Inc. is a publicly held resource company based in Vancouver, Canada.  The Company is listed on the TSX Venture Exchange under the symbol “AMG” and is quoted on the Frankfurt Exchange under the symbol “AMX”. The Company is focused on creating shareholder value through the development of the Company’s gold and gold-copper projects in the Yukon and Peru while building a portfolio of quality pipeline projects in North and South America. The Company’s Red Mountain gold property is located in central Yukon Territory approximately 55 kilometres northwest of the community of Mayo in the Tintina Gold Belt. The Red Mountain gold property consists of approximately 3,600 hectares of contiguous quartz claims. 52 of such quartz claims (1,168 hectares) are held 80% by the Company with an option to acquire 100% ownership and are subject to a net smelter returns royalty and 131 quartz claims (approximately 2,400 hectares) are held 100% by the Company. AM Gold’s Pinaya gold-copper project is located approximately 775 kilometres southeast of the city of Lima, Peru in the Tintaya Gold Belt. The Company maintains 100% ownership of 35 mining concessions covering the 19,200 hectare Pinaya land position. AM Gold’s corporate offices are located Suite 605 – 369 Terminal Avenue, Vancouver, British Columbia, V6A 4C4 (phone: 604-646-0067).

On behalf of AM GOLD INC.

“John Fiorino”

John Fiorino
Chief Executive Officer
AM GOLD INC.

For further information on AM Gold, please contact Murray Caruth at 1-604-646-0067 or by email at , or visit AM Gold’s website at: http://amgold.ca.

Neither the 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.

 
     
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