Mar. 31, 2011 (Canada NewsWire Group) --
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
VANCOUVER, March 31 /CNW/ - Selwyn Resources Ltd (TSXV: SWN) ("Selwyn") today announced that it has entered into an agreement with Paradigm Capital Inc. to act as lead agent on behalf of a syndicate including Canaccord Genuity Corp. (collectively, the "Agents") to undertake a best efforts private placement financing of up to 50,000,000 subscription receipts (the "Subscription Receipts") at a price of $0.30 to raise gross proceeds of up to $15 million (the "Offering"). Selwyn has granted to the Agents an option to sell up to an additional 15% of the Subscription Receipts for additional gross proceeds of $2.5 million (the "Agents' Option").
Each Subscription Receipt will be convertible for no additional consideration into one common share of Selwyn (a "Common Share") and one-half of one Common Share purchase warrant upon satisfaction of certain release conditions (the "Release Conditions"). Each whole warrant will entitle the holder thereof to purchase one Common Share at a price of $0.40 per common share and will be exercisable for a period of 24 months after the closing date of the Offering.
The proceeds from the Offering will be used for the purchase consideration payable by Selwyn in connection with the acquisition of ScoZinc Limited from Acadian Mining Corporation (See February 8, 2011 News Release) and for general working capital purposes (the "Proposed Transaction").
The Release Conditions include:
| i) | all approvals for the Proposed Transaction have been obtained; |
| ii) | all conditions precedent to closing of the Proposed Transaction have been satisfied, as defined in the Selwyn and Acadian Mining Corporation binding Letter Agreement or final Share Purchase Agreement as applicable; and |
| iii) | Selwyn and Paradigm Capital Inc., on behalf of the Agents, having delivered a joint notice to the Escrow Agent confirming the Release Conditions have been satisfied and any other regulatory approvals with respect to the issue of Common Shares and Warrants upon conversion of the subscription receipts have been satisfied. |
On the Closing Date, the gross proceeds from the Offering will be delivered to and held by a licensed Canadian trust company or other escrow agent until the Subscription Receipt deadline of May 31, 2011 or upon satisfaction of the Release Conditions, whichever is earlier.
Selwyn also intends to raise approximately $30 million in debt as part of the funds to reopen the Scotia Mine.
About Selwyn Resources Ltd
Selwyn's main focus remains the exploration and development of its properties that make up the Selwyn Project in the Yukon, by the joint venture comprised of Selwyn and Chihong Canada Mining Ltd. The acquisition of the Scotia Mine will provide Selwyn with a new opportunity for growing the company, expanding its management team, and providing cash flow to fund growth as it advances the Selwyn Project.
FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements concerning the issue of the Subscription Receipts and the acquisition of ScoZinc Ltd. These forward-looking statements are based on assumptions and judgments of management regarding the Subscription Receipts issue and the acquisition that may prove to be inaccurate due to factors beyond Selwyn's control, including the satisfaction of conditions to the closing of the acquisition and the Subscription Receipts issue. Although we have attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements, there may be other factors that cause results not to be as anticipated or intended. There is no assurance that such information will prove to be accurate, as future events could differ materially from those anticipated in such information and accordingly, there is no assurance that the acquisition of the ScoZinc Ltd and the completion of the Subscription Receipts issue will be completed as anticipated. Readers should not place undue reliance on forward-looking statements.
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.
Harlan Meade, Chief Executive Officer
Tel: 604-801-7240