Such investor participated in the Corporation's October 25th financing, and this new financing will be on the same terms and conditions as the October 25th financing. This additional private placement will consist of the sale of 2,325,581 common shares of the Corporation at a price of U.S. $2.15 per share, resulting in gross proceeds to the Corporation of U.S. $5 million. In addition to the common shares, the investor will receive a common share warrant exercisable for three tenths (3/10) of a common share, for each common share purchased each full warrant will be exercisable until October 25, 2007 at an exercise price of U.S. $2.52 per share. In connection with this financing, the Corporation has agreed to pay placement agent fees in cash in the amount of U.S. $300,000.
The closing of the financing is subject to the acceptance of the TSX Venture Exchange and satisfaction of customary terms and conditions.
Storm Cat will use the net proceeds from the financing to further develop its exploration and drilling program in the Powder River Basin, Wyoming where two drilling rigs are active, in Elk Valley, British Columbia, Canada where the second exploratory well is being drilled, and ongoing exploratory work in Saskatchewan, Canada and the Cook Inlet, Alaska.
This private placement will be covered by the same registration rights agreement entered into with respect to the October 25th financing and requires the Corporation to file with the SEC a Registration Statement covering the common shares issued, including any common shares issued upon exercise of the warrants, by December 31, 2005. If the Registration Statement is not filed by December 31, 2005 or is not declared effective by the SEC by April 20, 2006, then the Corporation will be liable to make pro rata payments to each investor who is a party thereto in an amount equal to 1.0% of the aggregate amount invested by such investor for each 30-day period or pro rata for any portion thereof following such deadlines.
The securities offered in the private placement have not been registered under the United States Securities Act of 1933 or any state securities laws, and unless so registered may not be offered or sold in the United States, except pursuant to an exemption from, or in a transaction subject to, the registration requirements of the Securities Act of 1933 and applicable state securities laws. This press release is issued pursuant to Rule 135(c) of the Securities Act of 1933, and does not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of the common shares or warrants in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
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