Alabama Graphite Corp. Announces a Brokered Private Placement
January 20 2014 - 9:20AM
Access Wire
January 20, 2014 - VANCOUVER,
Canada - Alabama Graphite Corp. (the "Company") (CSE: ALP) (OTC: ABGPF) (FRANKFURT: A1G.F WKN: A1J35M) (ISIN# CA0102931080) is pleased
to announce that it has entered into an agreement with First
Republic Capital Corporation ("First Republic") pursuant
to which First Republic will act as the Company's agent to sell:
(a) up to 25,000,000 non-flow-through units ("Units") of the Company at
a price of Cdn$0.07 per unit for approximate aggregate proceeds of
Cdn$1.75 million; and (b) up to 1,500,000 flow-through units
("Flow-Through
Units") at a price of Cdn$0.10 per unit for
approximate aggregate proceeds of Cdn$150,000, by way of a private
placement (the "Private
Placement").
Each Unit is
comprised of: (i) one common share of the Company (a
"Unit
Share"); and (ii) one common share purchase
warrant (a "Unit
Warrant") of the Company, with each Unit
Warrant entitling the holder to purchase one common share of the
Company at an exercise price of Cdn$0.10 for a period of 36 months
from the date of issuance of the Unit (the "Unit Warrant Expiry Date"). If, during the period commencing on the date that is four
months and one day following the issuance of the Unit Warrants and
ending on the Unit Warrant Expiry Date, the daily volume weighted
average trading price of the Company's common shares on the CSE
exceeds Cdn$0.20 for each day for a period of 20 consecutive
trading days, then the Company may, from time to time, give the
holders of the Unit Warrants written notice of such occurrence
within 30 days of such occurrence, in which case the Unit Warrants
will expire at 4:00PM (Vancouver time) on the 30th day following the giving of such
written notice.
Each Flow-Through
Unit is comprised of (i) one flow-through common share of the
Company and (ii) one non-flow-through common share purchase warrant
(a "FT Unit
Warrant"), with each FT Unit Warrant
entitling the holder to purchase one common share of the Company at
an exercise price of Cdn$0.15 for a period of 36 months from the
date of issuance of the Flow-Through Unit (the "FT Unit Warrant Expiry Date"). If, during the period commencing on the date that is four
months and one day following the issuance of the FT Unit Warrants
and ending on the FT Unit Warrant Expiry Date, the daily volume
weighted average trading price of the Company's common shares on
the CSE exceeds Cdn$0.25 for each day for a period of 20
consecutive trading days, then the Company may, from time to time,
give the holders of the FT Unit Warrants written notice of such
occurrence within 30 days of such occurrence, in which case the
Warrants will expire at 4:00PM (Vancouver time) on the
30th day following the
giving of such written notice.
The net proceeds from
the sale of the Units will be used for airborne geophysics, further
drilling and metallurgical testing of the flagship Coosa Project in
Coosa County, Alabama and general working capital. The Coosa
Project comprises 42,000 acres and is located within the prodigious
Alabama Graphite Schist - the geologic unit that supplied the
majority of the domestic production in the US in the first half of
the 20th century
- an era of noteworthy US graphite production. With
an NI 43-101 already published, the company has a goal of upgrading
the discovery's prospective economics through the property's first
airborne geophysical survey and an extensive testing program. One
of the horizons to be tested will be the previously producing
Fixico Mine, one of the historic graphite-producing mines in the
State. The 100 percent owned Coosa Project is
on private land, with in-place critical infrastructure, hospitable
climate and close proximity to transportation routes/customers. In
addition a business friendly permitting process differentiates the
Coosa Project from others.
The net proceeds from
the sale of the Flow-Through Units will be used to initiate
airborne geophysics and exploration work on the Company's Hearst
Graphite Project in Northern Ontario. The Hearst Graphite Project
comprises 16 claim units and is located just east of Zenyatta
Ventures Ltd.'s ("Zenyatta") Albany
hydrothermal graphite discovery in Northern Ontario. A geophysical
study conducted by Noranda Exploration Company in December of 1987,
included both ground magnetic and horizontal loop electromagnetic
(HLEM) surveys. Several HLEM conductors were identified by this
survey, but the conductors on the acquired claim units were
associated with magnetic lows. Noranda concluded at the time that
these conductors were most likely due to graphite
mineralization.
The Private Placement is expected to
close on January 31, 2014, and the Private Placement may close in
one or more tranches.
The Company has
agreed to pay First Republic cash compensation of; (i) a corporate
finance fee equal to 2% of the gross proceeds of the Private
Placement and (ii) a sales commission equal to 7% of the gross
proceeds of the Private Placement and to issue to First Republic
broker warrants ("Broker
Warrants") of; (i) corporate finance Broker
Warrants equal to 2% of the aggregate number of Units and
Flow-Through Units sold in the Private Placement and (ii) selling
compensation Broker Warrants equal to 7% of the aggregate number of Units and Flow-Through Units sold in the
Private Placement. Each Broker Warrant will entitle the holder to
purchase one Unit at an exercise price of Cdn$0.07 for a period of
two years from the date of issuance of such Broker Warrant, and the
Unit Warrant forming part of such Unit will be subject to the
accelerated expiry provisions noted above for the Unit
Warrants.
All securities issued pursuant to
the Private Placement will be subject to a four-month hold period
from the date of closing of the Private Placement. The Private
Placement is subject to the approval of the CSE.
The securities offered pursuant to
the Private Placement have not been, and will not be, registered
under the United States Securities Act of 1933, as amended or any
U.S. state securities laws and may not be offered or sold in the
United States or to United States persons absent registration or
any applicable exemption from the registration requirement of the
U.S. Securities Act and applicable U.S. state securities laws. This
news release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
Dana Durgin, P. Geo., a Qualified
Person as defined by National Instrument 43-101 and independent
consultant to the Company, has reviewed the contents of this press
release.
About Alabama Graphite:
Alabama Graphite
Corp., through its wholly-owned subsidiary, Alabama Graphite
Company Inc., is a graphite exploration and development company
whose flagship project "The Coosa Graphite Project" in Coosa
County, Alabama is located in an area with significant historical
production of crystalline flake graphite. The
Company also acquired a 100% interest in the Hearst Graphite
Property in Northern Ontario in August 2013.
For further details go
to www.alabamagraphite.co
ALABAMA GRAPHITE
CORP.
Ron S. Roda, President
(609) 785-1581
FIRST REPUBLIC CAPITAL CORPORATION
Richard Goldstein
(416) 957-6303
OR
Anthony Durkacz
(416) 720-4360
THE
CANADIAN SECURITIES EXCHANGE HAS NOT REVIEWED AND DOES NOT
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OF THIS NEWS RELEASE.
NOT FOR DISTRIBUTION TO THE U.S. NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES. ANY FALIURE TO COMPLY WITH THIS
RESTRICTION MAY CONSTITURE A VIOLATION OF UNITED STATES SECURITIES
LAW.
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