The financing consisted of a total of 1,875,000 units priced at $2.40 per unit, for gross proceeds of $4,500,000 CDN, and 2,142,858 flow-through common shares priced at $2.80 per share, for gross proceeds of $6,000,000 CDN (the "Offering"). Each unit comprises one common share and one-half of one common share purchase warrant. Each whole warrant is exercisable to purchase one additional common share at a price of $3.00 per share for a period of 18 months from closing. None of the securities distributed under the Offering may be traded on the TSX Venture Exchange or otherwise sold in Canada or to or for the benefit of a resident of Canada before January 28, 2006 unless permitted under Canadian securities legislation and the rules of the TSX Venture Exchange.
The TSX Venture Exchange has conditionally approved the subject private placement subject to the filing of final documents.
In connection with the Offering, the Corporation paid agents' commissions to three registered dealers, consisting of approximately $787,500 in cash payments and 301,339 agents' warrants. Each agent's warrant entitles the holder to purchase one Common share of the Corporation at a price of $2.40 CDN per share on or before March 27, 2007.
The Corporation will use the net proceeds from the sale of the units to further its exploration and development program in the Powder River Basin, Wyoming and for general corporate purposes. All of the proceeds from the sale of flow-through common shares will be used to incur exploration and development expenses which qualify as CEE under the Income Tax Act (Canada), with the Corporation's current principal focus in Canada being on its project in Elk Valley, British Columbia.
J. Scott Zimmerman, Storm Cat's President and CEO, said, "Funding from this Canadian private placement allows the Corporation to aggressively pursue the terms of its farm-in agreement in Elk Valley. The strong support from the Canadian investment community on this offering reflects faith in the Corporation's ability to acquire, explore and develop unconventional resources in the Canadian Provinces"
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