TSX Venture Symbol: GWG
US Symbol: GWMGF
CUSIP 3914Y 10 3
GREAT WESTERN MINERALS GROUP ANNOUNCES $7 MILLION PROSPECTUS OFFERING
January 12, 2010 – Saskatoon, Saskatchewan – Great Western MineralsGroup Ltd. ("GWMG" or the "Company") is pleased to announce that it hasfiled an amended and restated preliminary short form prospectus withthe securities regulatory authorities in the Provinces of BritishColumbia, Alberta, Saskatchewan, and Ontario in connection with areasonable best efforts offering of units (the "Units") of GWMG (the"Offering") for gross proceeds of up to $7,000,000, subject to a 15%over-allotment option, at an issue price of $0.28 per Unit. TheOffering will be led by Pope & Company Limited (the "Agent").
Each Unit will consist of one common share of GWMG and one-half ofone common share purchase warrant (each whole warrant, a "Warrant").Each Warrant will entitle its holder to purchase one additional CommonShare for $0.50 and will expire 60 months after the date of the closingof the Offering, subject to acceleration of the exercise period incertain circumstances. Following the closing of the Offering, if theCompany’s daily volume weighted average share price is $1.00 or moreper share for 10 consecutive trading days on the TSX Venture Exchange,or an equivalent stock exchange, the exercise period of the Warrantswill be reduced to 60 days and if not exercised within such period theWarrants shall be deemed expired.
The Agent will receive aggregate cash commission of 7% of the grossproceeds of the Offering, and any over-allotment option thereto, andthat number of broker warrants equal to 7% of the total Units placed,and any over-allotment option thereto, excluding therefrom the numberof Units purchased by person(s) identified on the President’s list. Each broker warrant will entitle its holder to purchase one CommonShare for $0.28 for a period of 24 months from the closing date of theOffering.
GWMG plans to use the net proceeds from the Offering for purposesthat include, (i) the purchase of new equipment needed to expandproduct offerings at its wholly owned subsidiary Less Common MetalsLtd. in Birkenhead England (“LCM”), (ii) providing additional workingcapital for LCM operations, (iii) conducting further explorationactivities, and (iv) general working capital purposes.
Jim Engdahl, President and CEO of Great Western Minerals Group said,"With the global recession coming to an end, we've had a significantincrease in demand for products from Less Common Metals and GreatWestern Technologies. Even more encouraging, we've also had requests toexpand our range of products to include strip-casting and metal-making. As a result, we will use some of this capital to purchase additionalequipment needed to expand our range of products. The addition of thesenew products has the potential to significantly increase our productionoutput with a corresponding boost to our bottom line. If all goes asexpected, we could have this new production on line in Q1 2011."
Engdahl adds, "This financing will also allow us to further improveour balance sheet. Last year, we paid out the long-term debt we took onwhen we acquired LCM. Now we will be in a position to provideadditional working capital to further support the growth opportunitiesfor LCM. These opportunities, combined with the potential from ouroption agreement on the Rareco project, could allow us to fully realizeour mine-to-market strategy in the next 18 to 24 months."
The Offering is expected to close on the second business dayfollowing the date on which GWMG has obtained a receipt for the finalprospectus qualifying the distribution of the Units, the Warrants andthe underlying Common Shares, and the Common Shares issuable on theexercise of the broker warrants, and is subject to certain conditionsincluding, but not limited to, the receipt of all necessary approvals,including the approval of the TSX Venture Exchange.
About Great Western Minerals Group Ltd.
Great Western MineralsGroup Ltd. is a Canadian-based company with six rare earth explorationand development properties in North America with an option on a sizableadditional property in South Africa. In addition, as part of theCompany's strategy to pursue a vertically-integrated business model,the Company's wholly-owned subsidiaries of Less Common Metals Limitedlocated in Birkenhead UK, and Great Western Technologies Inc., locatedin Troy, Michigan, produce a variety of specialty alloys for use in thebattery, magnet and aerospace industries. These "designer" alloysinclude those containing aluminum, nickel, cobalt and the rare earthelements.
For additional information please contact:
Great Western Minerals Group Ltd.
Ron Malashewski, Manager of Investor Relations
(306) 659-4500
Email: info@gwmg.ca
Website: www.gwmg.ca
Further information on this financing can be obtained from:
Russell N. Starr
Head of Institutional Sales and Trading
Pope & Company Limited
(416) 588-6419
Grant White
Global Head, Capital Markets
Pope & Company Limited
(416) 588-6139
Neither TSX Venture Exchange nor itsRegulation Services Provider (as that term is defined in the policiesof the TSX Venture Exchange) accepts responsibility for the adequacy oraccuracy of this release.
This news release shall not constitute an offer to sell or thesolicitation of an offer to buy securities of the Company in anyjurisdiction. The securities to be issued pursuant to the Offering bythe Company have not and will not be registered under the United StatesSecurities Act of 1933, as amended (the "1933 Act"), or the securitieslaws of any state of the United States, and may not be offered or soldin the United States absent registration or an applicable exemptiontherefrom under the 1933 Act and the securities laws of all applicablestates.
Certain information set out in thisNews Release constitutes forward-looking information, which may includeinformation relating to estimates of sales and revenue of GWMG.Forward-looking statements (often, but not always, identified by theuse of words such as "expect", "may", "could", "anticipate" or "will"and similar expressions) may describe expectations, opinions orguidance that are not statements of fact and which may be based uponinformation provided by third parties. Forward-looking statements arebased upon the opinions, expectations and estimates of management ofthe Company as at the date the statements are made and are subject to avariety of known and unknown risks and uncertainties and other factorsthat could cause actual events or outcomes to differ materially fromthose anticipated or implied by such forward-looking statements. Thosefactors include, but are not limited to the ability of the Company andthe Agents to successfully complete the Offering, the ability of theCompany to obtain a receipt for the Prospectus (whether in theanticipated timeframe or at all), capital expenditure projections, useof proceeds of the Offering, risks, uncertainties and other factorsthat are beyond the control of the Company, risks associated with theindustry in general, commodity prices and exchange rate changes,operational risks associated with exploration, development andproduction operations, delays or changes in plans, risks associatedwith the uncertainty of reserve estimates, health and safety risks andthe uncertainty of estimates and projections of production, costs andexpenses. In light of the risks and uncertainties associated withforward-looking statements, readers are cautioned not to place unduereliance upon forward-looking information. Although the Companybelieves that the expectations reflected in the forward-lookingstatements set out in this press release or incorporated herein byreference are reasonable, it can give no assurance that suchexpectations will prove to have been correct. The forward-lookingstatements of the Company contained in this press release, orincorporated herein by reference, are expressly qualified, in theirentirety, by this cautionary statement and the risk factors containedin the Company’s annual information form filed on SEDAR.