|January 06, 2010|
Valgold Proposes Restructuring And Subscription Receipts Offering
|Vancouver, BC - ValGold Resources Ltd. ("ValGold" or the "Company") announces that the Company's board of directors has approved, subject to shareholder and regulatory approvals, a consolidation of the issued and outstanding and unissued common shares of ValGold on the basis of one new consolidated common share for five existing common shares. The required approval of the shareholders will be sought at an extraordinary shareholder meeting (the "Meeting") to be held on or about February 3rd 2010 and if approval is obtained it is expected that the share consolidation would become effective on or before March 3rd, 2010. The consolidation should result in ValGold having approximately 22 million shares issued and outstanding without taking into account the proposed private placement described below, and warrants and options exercisable to acquire 1,500,000 and 828,000 post-consolidation shares, respectively. The purpose of the restructuring is to allow for more favourable pricing of the Company's securities to facilitate financing of the Company's operations by way of an equity offering of securities priced in accordance with the requirements of the TSX Venture Exchange.|
ValGold also announces a private placement of up to 6,000,000 Subscription Receipts at a price of $0.17 per Subscription Receipt to raise aggregate gross proceeds of up to $1,020,000.
If the proposed share consolidation is approved by shareholders, each Subscription Receipt will be deemed to be exchanged without further cost to its holder for one Unit. Each Unit will consist of one consolidated common share and one non-transferable purchase warrant exercisable to purchase one additional consolidated common share at a price of $0.25 for a period of five (5) years after the closing date of the offering.
If, at any time after the date that is four months and one day following the Closing Date, the closing price of the common shares of the Company on the TSX Venture Exchange, or such other stock exchange or quotation system on which the Company's common shares are then traded, is not less than $0.50 per share for a period of 10 consecutive trading days (whether or not a trade occurs on any of such days), then the Company may elect to accelerate the Expiry Time of any unexercised Share Purchase Warrants by sending notice to the Holder, by prepaid regular mail to the address of the Holder on record with the Company from time to time, and the Expiry Time shall thereupon be deemed to be amended to 4:00 p.m. local time at the City of Vancouver, Province of British Columbia on the date that is the 30th day following the date of such notice.
In the event that the shareholders do not approve the share consolidation, Subscription Receipts will be deemed to be exchanged for, in lieu of Units, an unsecured promissory note issued by the Company (a "Note") in an amount equal to the funds advanced by each holder for the purchase of Subscription Receipts. The Notes will be repayable on demand by the holder any time 15 months after the Closing Date and will bear interest at the rate of 10% per annum, calculated and payable annually. In the event that the Subscription Receipts are exchanged for Notes, holders will also be entitled, subject to regulatory approval, to receive a bonus equal to 20% of the principal amount of the Note paid in non-consolidated common shares at a deemed price equal to the greater of $0.05 per share or the market price of ValGold common shares less a discount of 25% (determined in accordance with the policies of the TSX Venture Exchange) on the day preceding the Meeting.
ValGold anticipates closing the Subscription Receipts Offering on or about January 21st 2010 (the "Closing Date"). The proceeds of the Subscription Receipts will be immediately available for use by the Company and will be used for maintenance of the Tower Mountain Property in Ontario and the Venezuelan properties, and for general working capital.
Finders' fees consisting of cash and warrants will be payable in connection with some or all of the offering in accordance with Exchange policies. The offering is subject to all necessary regulatory approvals.
The independent directors have approved the participation of directors and officers of the Company in the offering on terms identical to arm's length purchasers. Any such participation would be a "related party transaction" as defined under Multilateral Instrument 61-101 ("MI 61-101"). The participation of such directors or officers will be exempt from the minority shareholder approval requirements of MI 61-101 on the basis that neither the fair market value of any securities issued to nor the consideration paid by such persons will exceed 25% of the Company's market capitalization.
For more information on ValGold and its portfolio of international projects, visit our website at www.valgold.com.
Stephen J. Wilkinson
President & Chief Executive Officer
For further information please contact:
Tel: (604) 687-4622
Fax: (604) 687-4212
Neither 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.
This news release does not constitute an offer to sell or solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain "forward-looking statements", including, without limitation, statements regarding the proposed Meeting and share consolidation, expected timing of closing of the offering and use of proceeds. Such statements involve various risks and uncertainties and are based on certain assumptions, including that no intervening event will occur that will result in the Company being unable or unwilling to call and hold the Meeting, that the required shareholder and regulatory approvals will not be obtained, that commitments will not be received for all or any of the offering or once received will not be honored. There can be no assurance that such statements or timing will prove to be accurate. Important factors that could cause material variances from the forward-looking statements herein include an adverse change in market prices generally and the Company's shares in particular, regulatory changes, and timeliness of approvals and funding of commitments.
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