Sterling Resources has entered into a bought deal financing agreement with a syndicate of underwriters led by Wellington West Capital Markets (the "Underwriters") to issue 15,790,000 common shares (the "Common Shares") at a price of $1.90 per Share (the "Offering Price") for gross proceeds of $30,001,000 (the "Offering").
The Underwriters will be entitled to an over-allotment option (the "Over-allotment Option") to purchase up to a further 2,368,500 Common Shares at the Offering Price. The Over-allotment Option will be exercisable in whole or in part, at the sole discretion of the Underwriters, until 30 days following the closing of the Offering. If the Over-allotment Option is exercised in full, the gross proceeds raised pursuant to the Offering will be $34,501,150.
The net proceeds of this issue will be used towards the required equity component of the financing of the Breagh project in the United Kingdom North Sea, for which Sterling recently announced an offer of up to (pnds stlg)100 million of project financing from the Royal Bank of Scotland (RBS).
The Offering is subject to certain conditions including normal regulatory approval, including approval of the TSX Venture Exchange. The Common Shares will be offered by way of a short form prospectus in all of the provinces of Canada (excluding Quebec) and on a private placement basis elsewhere including the United Kingdom and Europe. Closing is anticipated to occur on or about August 12, 2010.
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