TORONTO, June 21, 2017 /CNW/ - Kerr Mines Inc. ("Kerr"
or the "Company") (TSX: KER, OTCQB: KERMF, FRA: 7AZ1) announces
that, further to its June 15, 2017
press release, it intends to complete a non-brokered private
placement with subscriptions exceeding the originally announced
target of $5 million due to high
investor interest. Kerr intends to issue up to 45,000,000
units of the Company ("Units") at a price of $0.18 per Unit (the "Offering") and a
maximum of 22,500,000 Warrants (as defined below). The issuance of
the Common Shares forming part of the Units represents
approximately 23.6% of the current issued and outstanding Common
Shares on a non-diluted basis and with the potential maximum
issuance of the 22,500,000 Warrants represents approximately 35.4%
of the current issued and outstanding Common Shares. The
Company will use the net proceeds from the Offering to finance its
exploration program at its flagship Copperstone Mine in
Arizona.
Each Unit of the Offering will be comprised of one common share
(a "Common Share") and one-half of one Common Share purchase
warrant (a "Warrant"), with each Warrant entitling the
holder thereof to acquire a Common Share at a price of $0.27 per share for a period of 24 months from
the date of issuance, provided, that if, at any time the Common
Shares trade on a stock exchange at a volume weighted average
trading price of CDN$0.40, or
greater, per Common Share for a period of 20 consecutive trading
days, the Company may accelerate the expiry date of the Warrants by
giving notice to the holders thereof and in such case the Warrants
will expire on the 30th day after the date on which such
notice is given by the Company.
The price of $0.18 per Unit
represents a discount of approximately 23.1% to the $0.2342 volume weighted average trading price of
the Common Shares on the TSX for the five trading days immediately
preceding the date of filing of the original notice of the Offering
with the TSX. The completion of the Offering will not
"materially affect control" (as that term is defined in the
policies of the TSX) of the Company.
Mr. Fahad Al Tamimi, who is a
director and Chairman of the Company will subscribe for up to
11,341,692 Units for gross proceeds of up to approximately
$2.04 million, either personally or
through Trans Oceanic Minerals Company Ltd., a company controlled
and owned by Mr. Tamimi, which will represent approximately 25% of
the Offering and approximately 6% of the issued and outstanding
Common Shares of the Company prior to the completion of the
Offering on a non-diluted basis.
The Offering is scheduled to close on or about June 30, 2017, and the Company may complete
the total Offering in one or more tranches. The Offering has
been conditionally approved by the Toronto Stock Exchange
("TSX") but remains subject to final approval from the
TSX.
Certain eligible persons (the "Finders") will be paid a
cash commission equal to up to 7% of the proceeds raised from
subscribers introduced to the Company by such Finder in connection
with the Offering.
The securities issued pursuant to the Offering are subject to a
four month hold period in accordance with applicable securities
laws.
Shareholder Approval
Pursuant to the policies of the TSX the following is a detailed
description of the Offering which requires shareholder
approval.
The Offering involves the issuance of up to 45,000,000 Units at
a price of $0.18 per Unit. Each
Unit of the Offering will be comprised of one Common Share and
one-half of one Common Share Warrant, with each Warrant entitling
the holder thereof to acquire a Common Share at a price of
$0.27 per Common Share for a period
of 24 months from the date of issuance, provided, that if, at any
time the Common Shares trade on a stock exchange at a volume
weighted average trading price of CDN$0.40, or greater, per Common Share for a
period of 20 consecutive trading days, the Company may accelerate
the expiry date of the Warrants by giving notice to the holders
thereof and in such case the Warrants will expire on the
30th day after the date on which such notice is given by
the Company.
The maximum number of Common Shares which could be issued in
connection with the Offering would be 67,500,000 Common Shares
(which includes the 22,500,000 of Common Shares issuable pursuant
to the Warrants forming part of the Units). This would represent
approximately 35.3% of the issued and outstanding Common Shares of
the Company as of the date of the notice to the TSX.
Section 607(g)(i) of the TSX Company Manual provides that the
TSX requires security-holder approval for private placements to for
an aggregate number of listed securities issuable greater than 25%
of the number of securities of the Company which are outstanding,
on a non-diluted basis, prior to the date of closing of the
transaction. The Company expects to issue Common Shares
representing in excess of 25% of the number of Common Shares of the
Company which are outstanding, on a non-diluted basis, prior to the
date of closing of the transaction in connection with the
Offering.
Pursuant to Section 604(d) of the TSX Company Manual, the
Company is seeking the shareholder approval by way of a written
consent in lieu of a shareholders meeting and accordingly the
Offering remains subject to shareholder approval. As noted
above, the Offering has been conditionally approved by the TSX but
remains subject to final approval from the TSX. Pursuant to
TSX policies the Offering may not close until five business days
after the issuance of this press release.
About Kerr Mines Inc.
Kerr Mines is a North American
gold development and exploration company currently advancing the
fully permitted past-producing Copperstone Mine project.
Copperstone is a high-grade gold project located along the Walker
Lane mineral belt in mining-friendly Arizona. The project demonstrates significant
upside exploration potential within a 12,000 acre land package
which includes a production history of over 500,000 ounces of gold.
The Company's current focus is on maximizing Copperstone's
potential by defining and expanding current resources and
strengthening the mine's economics leading to a production
decision.
Cautionary Note Regarding Forward Looking Statements
This news release contains forward-looking statements, including
current expectations on the timing of the commencement of
production and the rate of production, if commenced. These
forward-looking statements entail various risks and uncertainties
that could cause actual results to differ materially from those
reflected in these forward-looking statements. Such statements are
based on current expectations, are subject to a number of
uncertainties and risks, and actual results may differ materially
from those contained in such statements. These uncertainties and
risks include, but are not limited to, the strength of the Canadian
economy; the price of gold; operational, funding, and liquidity
risks; the degree to which mineral resource estimates are
reflective of actual mineral resources; and the degree to which
factors which would make a mineral deposit commercially viable are
present; the risks and hazards associated with underground
operations. Risks and uncertainties about Kerr Mines' business are more fully discussed in
the Company's disclosure materials, including its annual
information form and MD&A, filed with the securities regulatory
authorities in Canada and
available at www.sedar.com and readers are urged to read these
materials. Kerr Mines assumes no
obligation to update any forward-looking statement or to update the
reasons why actual results could differ from such statements unless
required by law.
Neither TSX nor its Regulation Services Provider (as that term
is defined in the policies of the TSX) accepts responsibility for
the adequacy or accuracy of this release and no stock exchange,
securities commission or other regulatory authority has approved or
disapproved the information contained herein.
SOURCE Kerr Mines Inc.