KINGSTON, ON, May 27, 2011 /CNW/ - Murgor Resources Inc. (MGR: TSX-V) ("Murgor") is pleased to announce that it has entered into an engagement letter with Dundee Securities Ltd. ("Dundee") for a best-efforts private placement of "flow-through" shares and units in a maximum amount of $4 million.
In the private placement, Murgor will issue a maximum of 16,130,000 "flow-through" shares at a price of $0.155 per share, for maximum gross proceeds to Murgor of approximately $2.5 million. Murgor will use the proceeds from the issuance of the flow-through shares for exploration on its properties in Canada.
Murgor will also issue a maximum of 10,715,000 units at a price of $0.14 per unit, for maximum gross proceeds to Murgor of approximately $1.5 million. Each unit will be comprised of one common share and one-half of a common share purchase warrant. Each full warrant will entitle its holder to acquire one additional common share of Murgor at a price of $0.25 for 24 months from the date of closing.
Murgor will grant an over-allotment option to Dundee, which may be exercised up to 48 hours prior to the closing date, pursuant to which Dundee will have the right to sell additional flow-through shares and/or units in a maximum amount equal to 15% of the number of flow-through shares and units sold in the private placement, respectively. If the over-allotment option is exercised in full, the gross proceeds to Murgor from the private placement will be approximately $4.6 million.
In connection with the private placement, Murgor will pay a cash commission to Dundee in an amount equal to 7% of the gross proceeds. In addition, Murgor will issue to Dundee non-transferable broker warrants to acquire a number of units and flow-through shares representing 7% of the number of units and flow-through shares sold in the private placement, respectively. Each broker warrant for the units will entitle the holder to acquire one additional unit of Murgor at a price of $0.14 for 24 months from the date of closing. Each unit will have the same attributes as the units issued in the private placement. Each broker warrant for flow-through shares will entitle the holder to acquire one additional non-flow-through common share of Murgor at a price of $0.155 for a period of 24 months from the closing date.
The initial closing of the private placement is expected to take place on or about June 14, 2011. The private placement is subject to customary closing conditions, including the signing of an agency agreement between Murgor and Dundee, and to regulatory approval, including that of the TSX Venture Exchange.
About Murgor Resources Inc.
Murgor Resources Inc. is a mineral exploration and development company focused on near-term production at the Golden Arrow Gold Mine in Ontario. Murgor also owns a 100% interest in two gold-copper deposits in the Snow Lake and Flin Flon mining districts of Manitoba. The company further owns an exceptional portfolio of gold properties in proven mining districts of Canada, as well as a 1% NSR royalty in the Barry Gold Mine and the Windfall Gold Project in Québec.
This news release includes certain "forward-looking statements". All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding potential mineralization, resources and reserves, exploration results, and future plans and objectives of Murgor, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Murgor's expectations are exploration risks detailed herein and from time to time in the filings made by Murgor with securities regulators
