/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES OF AMERICA/
CALGARY, Nov. 13 /CNW/ - Fairmount Energy Inc. ("Fairmount" or the "Corporation") (TSX-V: FMT) announces that pursuant to the private placement previously announced on October 31, 2007, the underwriting syndicate led by Dundee Securities Corporation and including Acumen Capital Finance Partners Limited, GMP Securities L.P. and Blackmont Capital Inc. has exercised their option to increase the offering to 3,572,000 common shares on a flow-through basis ("Flow-Through Shares") at a price of $1.40 per share, for aggregate gross proceeds of $5,000,800. In consideration of their services, the Underwriters will receive a cash commission on the gross proceeds raised. The offering is scheduled to close on November 15, 2007.
The Flow-Through Shares will be issued pursuant to prospectus exemptions available under applicable securities legislation in Alberta, British Columbia, Saskatchewan and Ontario. Up to 300,000 Flow-Through Shares may be purchased by officers, directors and employees of the Corporation.
The proceeds of the offering will be used to fund the Corporation's ongoing exploration activities. The gross proceeds from the sale of the Flow-Through Shares will be used to incur eligible Canadian Exploration Expenses as defined in the Income Tax Act (Canada) which will be renounced in favor of the subscribers for the 2007 taxation year.
Closing of the offering is subject to the receipt of all requisite regulatory and stock exchange approvals. The shares issued pursuant to the offering will be subject to a four-month hold period from the date of the closing of the private placement. The Flow-Through Shares have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act.
Under the terms of the Corporation's bank operating and non-revolving acquisition and development loans, the Corporation is required to maintain a working capital ratio, adjusted for actual and available borrowings under the facilities of one to one. As at September 30, 2007, the Corporation exceeded the level set out in this covenant by approximately $500,000 and has since received a waiver of this covenant from the bank.
Not for distribution to U.S. newswire services or for dissemination in the United States of America.
ADVISORY: This press release contains forward-looking statements. More particularly, this press release contains statements concerning the anticipated closing date of the offering and the anticipated use of the proceeds of the offering.
Although Fairmount believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Fairmount can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties.
The closing of the offering could be delayed if Fairmount is not able to obtain the necessary regulatory and stock exchange approvals on the time lines it has planned. The offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the offering will not be completed within the anticipated time or at all.
The forward-looking statements contained in this press release are made as of the date hereof and Fairmount undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
The TSX Venture Exchange Inc. does not accept responsibility for the
adequacy or accuracy of this release.