Atlanta Gold Launches US$8 Million Senior Secured Gold Notes Private Placement
/NOT FOR DISTRIBUTION TO UNITED STATES' NEWSWIRE SERVICES OR DISSEMINATION IN
THE UNITED STATES/
TORONTO, Jan. 31, 2013 /CNW/ - Atlanta Gold Inc. (TSXV: ATG; OTCQX: ATLDF)
announces that it intends to complete a private placement of senior secured
gold notes ("Gold Notes") for gross proceeds of up to US$8 million. The Gold
Notes will be sold as part of a Unit, with each Unit consisting of US$1.00
principal amount Gold Notes and one common share purchase warrant, exercisable
at C$0.10 per share. Units will be issued in minimum denominations of
The Gold Notes will bear interest of 10% per annum and interest as well as
principal, amortized at 25%, 35% and 40%, will be repayable annually on
November 30, 2013, 2014 and 2015, respectively. Principal and interest will be
repayable in physical gold, or at the election of either the Company or the
investor, in the cash equivalent thereof based on spot gold prices at the time
of payment. The number of ounces of gold to be delivered to each investor in
satisfaction of principal and interest payments will be calculated based on
Reference Gold Prices per ounce of US$1,300 in Year 1, US$1,200 in Year 2 and
US$1,100 in Year 3. The Gold Notes will be secured by a limited recourse
guarantee of the Company's wholly-owned subsidiary, Atlanta Gold Corporation
("AGC") and the guarantee will be secured by a first ranking mortgage of AGC's
right, title and interest in the Atlanta Project, located in Idaho U.S.A.
The warrants will be exercisable at an exercise price of C$0.10 per share
until November 30, 2015. The Company will have the right to accelerate the
expiry date of the warrants if the closing price of the Company's common
shares on the TSX Venture Exchange exceeds $0.25 for 20 consecutive days on
which the Company's shares trade.
Net proceeds from the offering will be used for exploration, excavating and
test processing of bulk samples, environmental permitting, engineering and
development in respect of the Atlanta Project, to reduce indebtedness and for
general working capital purposes.
Completion of the offering is subject to the approval of the TSX Venture
Exchange and the execution of definitive documentation. All securities
issued under the offering will be subject to a four-month statutory hold
period. Certain insiders of the Company may participate in the offering.
Mr. Eric Sprott has personally signed a non-binding letter of intent
reflecting his intention to purchase the first US$2 million of the Units. The
Company will pay a 4% cash finder's fee to Brant Securities Limited in
connection with this purchase, subject to regulatory approval.
"This offering and Eric Sprott's commitment for the first US$2 million of the
offering represent an important milestone in the development of the Atlanta
Project providing the potential to finance project development without
excessive dilution," said Atlanta Gold President and CEO Wm Ernest Simmons.
"Key objectives are to work closely with the government and local community at
Atlanta, to establish an environmentally friendly mining project and to
determine the economic viability to develop the mineral resource in a
The securities offered have not been, and will not be, registered under the
United States Securities Act of 1933, as amended, or any state securities laws
and, unless so registered, may not be offered or sold in the United States or
to U.S. persons except pursuant to an exemption from such registration
requirements. This news release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any offer
or sale of securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful.
About the Company Atlanta Gold Inc. (TSXV: ATG; OTCQX: ATLDF) holds through
its 100% owned subsidiary, Atlanta Gold Corporation, leases, options or
ownership interests in its Atlanta properties which comprise approximately
2,159 acres located (8.74 square kilometres) located 90 air kilometres east of
Boise, in Elmore County, Idaho. A long history of mining makes Atlanta very
suitable for development of new mining projects. The Company is focused on
advancing its core asset, Atlanta, towards mine development and production.
This news release contains forward-looking information and forward-looking
statements (collectively "forward-looking statements") within the meaning of
applicable securities laws. All statements, other than statements of
historical fact, are forward-looking statements. We use words such as "may",
"intend", "will", "should", "anticipate", "plan", "expect", "believe",
"estimate" and similar terminology to identify forward-looking statements,
including with respect to the completion of the offering, the participation of
Mr. Sprott in the financing, the use of proceeds from the offering and the
payment of the fee to Brant Securities Limited. Such are based upon the
assumption that the Company will receive the approval of the TSX Venture
Exchange to the completion of the financing, that definitive documentation
will be entered into by Mr. Sprott and other investors in a timely manner and
that the financing will be completed within the time permitted by the
Exchange. Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results to differ
materially from those expressed or implied in the forward-looking statements
and accordingly, readers should not place undue reliance on those statements.
Risks and uncertainties that may cause actual results to vary include, but are
not limited to, the Company's and AGC's limited financial resources;
fluctuations in resource prices and currency exchange rates; changes in
general economic conditions and in the financial markets; the implementation
of additional penalties against AGC should payment of the penalty imposed by
the Court in respect of water treatment not be achieved in the time permitted;
as well as other risks and uncertainties which are more fully described in the
Company's annual and quarterly Management's Discussion and Analysis and in
other Company filings with securities and regulatory authorities which are
available at www.sedar.com. Should one or more risks and uncertainties
materialize or should any assumptions prove incorrect, then actual results
could vary materially from those expressed or implied in the forward-looking
statements and accordingly, readers should not place undue reliance on those
statements. Readers are cautioned that the foregoing lists of risks,
uncertainties, assumptions and other factors are not exhaustive. The
forward-looking statements contained in this news release are made as of the
date hereof and the Company undertakes no obligation to update publicly or
revise any forward-looking statements contained herein or in any other
documents filed with securities regulatory authorities, whether as a result of
new information, future events or otherwise, except in accordance with
applicable securities laws.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT
TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Atlanta Gold Inc.: Wm. Ernest Simmons President and CEO Telephone: (208)
424-3343 Fax: (208) 338-6513 Email:email@example.com
Atlanta Gold Inc. Bill Baird Vice President and CFO Telephone: (416) 777-0013
Fax: (416) 777-0014 Email:firstname.lastname@example.org
CHF Investor Relations Juliet Heading Senior Account Manager Telephone: (416)
868-1079 ext. 239 Fax: (416) 868-6198 Email:email@example.com
SOURCE: Atlanta Gold Inc.
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-0- Jan/31/2013 14:33 GMT
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