Atlanta Gold Launches US$8 Million Senior Secured Gold Notes Private Placement
Atlanta Gold Launches US$8 Million Senior Secured Gold Notes Private Placement
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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 US$100,000.
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 responsible manner."
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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CO: Atlanta Gold Inc. ST: Ontario NI: MNG PCS NASDAQ PVT NEWSTK
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