Cavan to Raise Funds for Crown King Arizona Silver Project
June 17 2011 - 7:11PM
Marketwired
Cavan Ventures Inc. ("Cavan" or the "Company") (TSX VENTURE: CVN)
is pleased to announce that, subject to regulatory approval, it
intends to carry out a private placement (the "Private Placement")
of an aggregate of up to 21.5 million subscription receipts of the
Company (each, a "Subscription Receipt"). Each Subscription Receipt
will be automatically converted into one unit of the Company (each,
a "Unit") upon the satisfaction or waiver of certain escrow release
conditions relating to the completion of the Company's previously
announced acquisition of a participating interest in the Crown King
Silver Project in Arizona, including TSX Venture Exchange approval
thereof. Each Unit consists of one common share of the Company and
one-half non-transferable common share purchase warrant of the
Company, with each whole warrant entitling the holder thereof to
purchase one common share of the Company for a period of eighteen
months following closing of the Private Placement. The Company
expects to raise gross proceeds of up to $2,775,000 from the sale
of the Subscription Receipts, such proceeds to be held in escrow
and repaid, with interest, to subscribers if the escrow release
conditions are not satisfied or waived within 180 days following
closing of the Private Placement. The Private Placement is expected
to close on or about July 6, 2011.
In connection with the Private Placement, the Company has
engaged Portfolio Strategies Securities Inc. ("PSSI") to act as
agent in connection with the issuance of up to 16 million
Subscription Receipts on a commercially reasonable best-efforts
basis (the "Brokered Subscription Receipts"), provided that PSSI
may, at its option, purchase a portion or all of the Brokered
Subscription Receipts. The Brokered Subscription Receipts will be
offered at a subscription price of $0.125, with a warrant exercise
price of $0.18. Further, the Company has granted PSSI an option
(the "Over-Allotment Option") to offer an additional number of
Brokered Subscription Receipts equal to 15 per cent of the number
of Brokered Subscription Receipts sold under the Private Placement,
effective upon receipt of subscriptions for Brokered Subscription
Receipts that result in gross proceeds equal to or exceeding
$2,000,000 and exercisable at any time up to 48 hours prior to
closing of the Private Placement. If the Over-Allotment Option is
exercised in full, the Company expects to receive additional gross
proceeds of $300,000. As compensation for acting as agent, PSSI
will receive a commission equal to 8 per cent of the gross proceeds
from the Brokered Subscription Receipts sold (including, if
applicable, the Over-Allotment Option), and compensation warrants
to purchase a number of common shares equal to 8 per cent of the
Brokered Subscription Receipts sold under the Private Placement
(including, if applicable, the Over-Allotment Option), exercisable
for a period of 24 months from the date of closing of the Private
Placement at an exercise price of $0.18. Notwithstanding and in
lieu of the foregoing, PSSI will receive a commission equal to 3
per cent of the gross proceeds from the Brokered Subscription
Receipts sold to subscribers sourced from a president's list
provided by the Company to PSSI (the "President's List"), and
compensation warrants to purchase a number of common shares equal
to 3 per cent of the Brokered Subscription Receipts sold to
subscribers sourced from the President's List. The Company has also
agreed to pay certain of PSSI's expenses in connection with the
Private Placement. PSSI's engagement in connection with the Private
Placement remains subject to its due diligence review to be
conducted prior to the date of closing.
In addition, under the Private Placement, 3 million non-brokered
Subscription Receipts will be offered at a subscription price of
$0.125, with a warrant exercise price of $0.18, and 2.5 million
non-brokered flow-through Subscription Receipts will be offered at
a subscription price of $0.16, with a warrant exercise price of
$0.22.
The securities issued under the Private Placement will be
subject to a statutory hold period which will expire four months
and one day from the closing date in accordance with the rules and
policies of the TSX Venture Exchange and applicable Canadian
securities laws and such other further restrictions as may be
applicable. The net proceeds of the Private Placement are expected
to be used toward mineral exploration activities, including the
exploration and development of the previously announced Crown King
Silver Project in Arizona, which remains subject to TSX Venture
Exchange approval, and for general corporate working capital.
As a result of the Private Placement, the Company has determined
not to proceed with its private placement previously announced by
news release dated May 10, 2011.
About Cavan
Cavan Ventures Inc. is a Vancouver based TSX Venture
Exchange-listed junior mining company with acquisitions in Canada
and Arizona, USA. The Company's vision is to become a globally
diversified resource company with strong focuses in gold, silver,
and rare earth elements. Cavan strives to become a mid-tier
producer through the acquisition and development of domestic and
international mining properties.
On behalf of the Board of Directors:
Andrew Mah, President & Director
This news release contains certain forward-looking statements
that reflect the current views and/or expectations of Cavan with
respect to its performance, business and future events. Such
statements are subject to a number of risks, uncertainties and
assumptions. Actual results and events may vary significantly.
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.
Contacts: Cavan Ventures Inc. Andrew Mah President &
Director (604) 783-5328 (cell) or (604) 288-2756
andrew@cavanventures.com Cavan Ventures Inc. Boris Ziger Corporate
Communications (416) 821-4869 borisz@cavanventures.com
www.cavanventures.com