Gleichen Resources closes $241.5-million financing
Ticker Symbol: C:GRL

Gleichen Resources closes $241.5-million financing

Gleichen Resources Ltd (C:GRL)
Shares Issued 29,763,380
Last Close 11/12/2009 $1.26
Thursday November 12 2009 – News Release

Mr. Michael Murphy reports

GLEICHEN COMPLETES $241.5 MILLION FINANCING

Gleichen Resources Ltd. has completed its previously announced financing to finance the acquisition of 78.8 per cent of the Morelos gold project from Teck Resources Ltd.

The agents, co-lead by Macquarie Capital Markets Canada Ltd., BMO Capital Markets and GMP Securities LP, and including Dundee Securities Corp., Scotia Capital Inc. and Jones, Gable & Company Ltd., placed 241.5 million special warrants of the corporation, including full exercise of the overallotment option, at a subscription price of $1 per special warrant, to raise gross proceeds of $241.5-million.

Each special warrant entitles the subscriber to receive, upon exercise, or deemed exercise following the qualification date (as defined below), and without payment of any further consideration, one unit of the corporation consisting of one common share in the capital of the corporation and one-fourth of one common share purchase warrant. Each common share purchase warrant will entitle its holder to purchase one additional common share for $1.30 for a period of 24 months following Nov. 12, 2009. The special warrants will be deemed automatically exercised, if not already exercised by the holder, on the earlier of:

The third business day after the date of receipt of a (final) prospectus to qualify, in each of the qualifying jurisdictions, the distribution of the common shares and common share purchase warrants to be issued in Canada upon exercise or deemed exercise of the special warrants and the compensation options (as defined below);
4:59 p.m. (Toronto time) on the date which is four months and one day following Nov. 12, 2009.
The corporation has undertaken to file a prospectus in each of the provinces of Canada, except Quebec, as soon as possible following closing. Unless a (final) receipt for a prospectus is received as described above, the special warrants and units are subject to resale restrictions in Canada until March 13, 2010.

The gross proceeds from the offering, less the agents’ estimated costs and expenses in respect of the offering, have been deposited in escrow to be released upon satisfaction of:

All necessary conditions for the completion of the acquisition of the Morelos gold project;
No material adverse change in the financial condition, business or operations of Gleichen;
Receipt by the escrow agent of a joint notice from the agents and Gleichen that the above two points have been satisfied.
The agents have received a cash commission of 5.5 per cent of the gross process from the offering, which forms part of the escrowed proceeds and has been deposited into escrow. In addition to cash commission, the agents have received 2,415,000 compensation options. Each compensation option will be exercisable to acquire one unit, until Nov. 12, 2011, at an exercise price of $1.15.

The net proceeds from the offering are intended to be used for the acquisition of the Morelos project, feasibility and development programs, and exploration at the Morelos gold project and for general working capital purposes.

November 12th, 2009
Categories: General . Author: admin