May 27, 2011 (Canada NewsWire Group) --
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./
TSX Venture Exchange symbol FNR
SASKATOON, May 27, 2011 /CNW/ - 49 North Resources Inc. ("49 North") (TSXV: FNR) is pleased to announce that it has filed a preliminary short form prospectus with respect to the distribution of a minimum of $2,000,000 and a maximum of $10,000,000 principal amount 8% convertible unsecured subordinated debentures (the "Debentures") issued in denominations of $100 and integral multiples thereof. 49 North has engaged MGI Securities Inc. to act as agent in connection with the offering of the Debentures (the "Offering").
49 North has also granted MGI Securities Inc. an over-allotment option to purchase an aggregate of up to 15% of the amount of Debentures issued on closing of the Offering, exercisable in whole or in part within 30 days from the date of the closing.
The Debentures will be created and issued pursuant to a trust indenture (the "Indenture") to be entered into between 49 North and Alliance Trust Company, as trustee. The following is a summary of certain provisions of the Indenture and of the Debentures to be issued thereunder. This summary does not purport to be complete and is subject to and qualified in its entirety by all of the express terms and conditions of the Indenture and the Debentures.
| (a) | the Debentures will have a three year term, maturing on the third anniversary of the initial closing date; |
| (b) | the Debentures will pay interest annually at the rate of 8% per annum, which interest will be paid in arrears in annual instalments on each of the first and second anniversaries of the initial closing date and on the maturity date (or earlier in the event of conversion or redemption of the Debentures in accordance with the terms of the Indenture as summarized below); |
| (c) | the outstanding principal amount of the Debentures will be convertible at the option of the holder, exercisable at any time prior to 5:00 pm (Toronto time) on the business day immediately preceding the maturity date or the business day immediately preceding the date the Debentures are redeemed, into common shares of 49 North at a conversion price of $4.50 per common share; and |
| (d) | the Debentures will, subject to certain terms and conditions, be redeemable by 49 North upon payment of the outstanding principal amount of the Debentures, interest due or accruing due prior to the date of redemption and a premium equal to: (i) 6% of the outstanding principal amount of the Debentures if redeemed prior the first anniversary of the initial closing date; (ii) 4% of the outstanding principal amount of the Debentures if redeemed on or after the first, but prior to the second anniversary of the initial closing date; or (iii) 2% of the outstanding principal amount of the Debentures if redeemed on or after the second anniversary of the initial closing date. |
The net proceeds from the Offering are expected to be used by 49 North to retire the debentures issued July 24, 2008, to carry out additional oil and gas drilling through its 89.5% owned subsidiary Allstar Energy Limited, to expand 49 North's investing activities and for general corporate purposes.
MGI Securities Inc. will be paid an aggregate cash fee equal to 5% of the gross proceeds of the Offering, other than in connection with up to $2,000,000 of subscriptions for Debentures from the president's list.
The Offering is subject to customary conditions and regulatory approvals, including the approval of the TSX Venture Exchange. A preliminary short form prospectus containing important information respecting the Offering has been filed with the securities regulatory authorities in certain jurisdictions of Canada. The preliminary short form prospectus is still subject to completion or amendment. Copies of the preliminary short form prospectus may be obtained from MGI Securities Inc. at Suite 600 - 224 4th Avenue South, Saskatoon, Saskatchewan (telephone number: (306) 385-6250) and are also available electronically at www.sedar.com. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued.
49 North is a Saskatchewan focused resource investment company with strategic operations in financial, managerial and geological advisory services and merchant banking. Our diversified portfolio of assets includes direct project involvement in the resource sector, as well as investments in shares and other securities of junior and intermediate mineral and oil and gas exploration companies. Additional information about 49 North is available at www.sedar.com.
Forward Looking Information: This release contains forward-looking information within the meaning of applicable Canadian securities legislation, including statements respecting the completion of the Offering and the use of the Offering proceeds. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those expressed or implied by such forward-looking information. In addition, the forward-looking information contained in this release is based upon what management believes to be reasonable assumptions. Readers are cautioned not to place undue reliance on forward-looking information as it is inherently uncertain and no assurance can be given that the expectations reflected in such information will prove to be correct. The forward-looking information in this release is made as of the date hereof and, except as required under applicable securities legislation, 49 North assumes no obligation to update or revise such information to reflect new events or circumstances.
The securities of 49 North have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This release is issued for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Neither 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.
49 North Resources Inc.
Tom MacNeill
President and Chief Executive Officer
306-653-2692 or ir@fnr.ca.