Cavan Provides Update on Proposed Financing
June 30 2011 - 7:59PM
Marketwired
Cavan Ventures Inc. ("Cavan" or the "Company") (TSX VENTURE: CVN)
announced today that due to challenging market conditions, it has
restructured its previously announced proposed financing. Under the
restructured financing, Cavan intends to carry out a private
placement (the "Subscription Receipt Private Placement") of up to
16 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. Each whole warrant will entitle its holder to purchase one
common share of the Company for a period of eighteen months
following closing of the Subscription Receipt Private Placement.
The Company expects to raise gross proceeds of up to $2,000,000
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 Subscription Receipt Private
Placement.
In connection with the Subscription Receipt Private Placement,
the Company has engaged Portfolio Strategies Securities Inc.
("PSSI") to act as agent in connection with the issuance of the
Subscription Receipts on a commercially reasonable best-efforts
basis. PSSI may, at its option, purchase a portion or all of the
Subscription Receipts. The Subscription Receipts will be offered at
a subscription price of $0.125, with each whole common share
purchase warrant having an exercise price of $0.18. Additionally,
the Company has granted PSSI an option (the "Over-Allotment
Option") to offer an additional number of Subscription Receipts
equal to 15 per cent of the number of Subscription Receipts sold
under the Subscription Receipt Private Placement. The
Over-Allotment Option is exercisable by PSSI at any time up to 48
hours prior to closing of the Subscription Receipt Private
Placement if the Subscription Receipt Private Placement is fully
subscribed. 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 cash
commission equal to 8 per cent of the gross proceeds from the
Subscription Receipts sold (including, if applicable, under the
Over-Allotment Option), and compensation warrants ("Compensation
Warrants") to purchase a number of common shares equal to 8 per
cent of the Subscription Receipts sold under the Subscription
Receipt Private Placement (including, if applicable, under the
Over-Allotment Option). The Compensation Warrants are exercisable
for a period of 24 months from the date of closing of the
Subscription Receipt Private Placement at an exercise price of
$0.18. Notwithstanding the foregoing, the Company has the option of
submitting a list of subscribers to PSSI sourced by the Company
(the "President's List"). Compensation payable to PSSI in
connection with Subscription Receipts sold to subscribers on the
President's List shall consist of a cash commission equal to 3 per
cent of the gross proceeds raised from the sale of such
Subscription Receipts, and Compensation Warrants to purchase a
number of common shares equal to 3 per cent of such Subscription
Receipts sold. The Company has also agreed to pay certain of PSSI's
expenses in connection with the Subscription Receipt Private
Placement. PSSI's engagement in connection with the Subscription
Receipt Private Placement remains subject to its due diligence
review to be conducted prior to the date of closing.
Concurrently with the Subscription Receipt Private placement,
the Company will be offering 3 million Units (the "Non-Brokered
Units") in a non-brokered private placement (the "Non-Brokered Unit
Private Placement") for aggregate gross proceeds of up to $375,000.
The Non-Brokered Units will be offered at a subscription price of
$0.125, with a warrant exercise price of $0.18. The Company may
engage one or more finders in connection with the sale of the
Non-Brokered Units. Any finder(s) engaged by the Company may
receive a cash commission equal to 8 per cent of the gross proceeds
raised from the sale of Non-Brokered Units placed by them, and
compensation warrants to purchase a number of common shares equal
to 8 per cent of the Non-Brokered Units sold under the Non-Brokered
Unit Private Placement. The Compensation Warrants are exercisable
for a period of 24 months from the date of closing of the
Non-Brokered Unit Private Placement. The gross proceeds from the
Non-Brokered Unit Private Placement are not subject to any escrow
conditions.
In addition, the Company will be conducting a private placement
(the "Non-Brokered Flow-Through Unit Private Placement") of 2.5
million non-brokered flow-through units (each a "Flow-Through
Unit") for aggregate gross proceeds of up to $375,000. Each
Flow-Through Unit will consist of one common share to be issued as
a "flow-through share" for the purposes of the Income Tax Act
(Canada), and one-half common share purchase warrant. Each
Flow-Through Unit, previously priced at $0.16, will be offered at a
subscription price of $0.15, with a warrant exercise price of
$0.20. The Company may engage one or more finder(s) in connection
with the sale of the Flow-Through Units on substantially the same
terms and conditions offered to finder(s) in the Non-Brokered Unit
Private Placement. The Compensation Warrants are exercisable for a
period of 24 months from the date of closing of the Non-Brokered
Flow-Through Unit Private Placement. The gross proceeds from the
Non-Brokered Flow-Through Unit Private Placement are not subject to
any escrow conditions.
The Company expects to raise aggregate gross proceeds of up to
$3,050,000 from the sale of the Subscription Receipts, the
Non-Brokered Units and the Flow-Through Units, and an additional
$300,000 if the Over-Allotment Option is exercised. The net
proceeds from the Subscription Receipt Private Placement and the
Non-Brokered Unit 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 working capital and general corporate purposes. The net
proceeds of the Non-Brokered Flow-Through Unit Private Placement
will be used in connection with exploration activities on the
Company's mineral properties located in Canada.
The securities issued under the Subscription Receipt Private
Placement, the Non-Brokered Unit Private Placement and the
Non-Brokered Flow-Through Unit Private Placement (collectively, the
"Financing") 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 Financing remains subject to receipt of all necessary
approvals, including approval from the TSX Venture Exchange.
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