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May 7, 2010 (TheNewswire.ca) --
Vancouver, British Columbia - MAY 6, 2010 - Pinnacle Mines Ltd. (TSXV: PNL)("Pinnacle" or the "Company") announces that further to its press releases dated February 8, 2010 and March 29, 2010, the Company has completed its previously announced rights offering (the "Offering").
Pursuant to the Offering, Pinnacle will issue in total 91,576,134 common shares ("Common Shares") at a subscription price of $0.05 per Common Share (the "Subscription Price"), providing gross proceeds of $4,578,807. The Company's total issued and outstanding Common Shares will increase to 183,152,268.
As described in the prospectus for the Offering, Progress Advanced Holdings Ltd. ("Progress Advanced") agreed to purchase from the Company at the Subscription Price any Common Shares that were not otherwise subscribed for under the Rights Offering (the "Standby Commitment"). In consideration for Progress Advanced agreeing to provide the Standby Commitment, the Company granted to Progress Advanced the right to subscribe for up to 22,894,033 additional Common Shares at the Subscription Price (the "Standby Fee Option") for a period of six months from the closing of the Offering. Because of the overwhelming interest in the Offering by shareholders, all rights in connection with the Offering were exercised by shareholders. If Progressed Advanced exercises their Standby Fee Option they will hold approximately 11.1% of the issued and outstanding Common Shares.
The Company also announces that it has entered into a financial services advisory agreement (the "Advisory Agreement") with Baron Capital Limited ("Baron"). Baron is a licensed merchant bank licensed to carry out type 1 (Dealing in Securities) and type 6 (Advising on Corporate Finance) which are regulated activities under the Securities and Futures Ordinance of Hong Kong. Baron will provide various consulting services, including general corporate and financial advice as to strategies, structures and alternatives to provide the Company exposure to potential new markets and funding opportunities, including potential acquisitions or divestitures, merger or partnership opportunities or alternate listings for the Company's securities. Upon signing the Advisory Agreement, Baron received an initial payment of US$400,000. In addition, Baron is entitled to receive reimbursement of expenses reasonably incurred in the provision of its services and a success fee may be payable upon certain conditions being met as set out in the Advisory Agreement. Certain directors and officers of the Company are also employed by Baron or its affiliates and, as such, the independent directors of the Company reviewed and approved the terms of the Advisory Agreement, including fees payable. The Advisory Agreement is subject to regulatory approval as may be required.
About Pinnacle
Pinnacle Mines Ltd. is a Canadian based minerals exploration company. In Canada, Pinnacle holds the Silver Coin gold prospect as its major asset and is developing and increasing the value of the Silver Coin gold resource (OTCBB:GORO) through continued drilling, exploration and on-going scoping studies. Silver Coin is located in an emerging major metals district that includes the historic Silbak-Premier gold mine and Barrick Gold's (NYSE:ABX) (TSX:ABX) famed Eskay Creek Mine.
For further information on Pinnacle, please contact Mike Thast at 604.688.9588 or visit Pinnacle's website at www.pinnaclemines.com.
On Behalf of the Board:
Herrick Lau
CFO & Director
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 news release.
This news release does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction. The rights and the Common Shares issuable on exercise of the rights will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the Unites States absent registration or an applicable exemption from registration requirements.
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