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Message: Announces Non-Brokered Private Placement

Announces Non-Brokered Private Placement

posted on Feb 07, 2009 06:11AM
February 6, 2009
Amerigo Announces Non-Brokered Private Placement
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 6, 2009) - Amerigo Resources Ltd. (TSX:ARG) ("Amerigo" or the "Company") is pleased to announce that it has arranged a non-brokered private placement (the "Financing") of up to 37.5 million units (each a "Unit") at a price of $0.28 per Unit for gross proceeds of $10,500,000. Each Unit will consist of one common share ("Share") and one share purchase warrant ("Warrant"). Each Warrant will entitle the holder to purchase one additional Share at a price of $0.33 in the first 12 months after closing and at a price of $0.40 in the second 12 months. The Warrants provide for appropriate adjustments in the event of stock dividends, subdivisions, consolidations and other forms of capital reorganization.

A finder's fee of 6% of the proceeds of the Financing is payable in cash or in equivalent Units on a portion of the Financing. The total number of Shares issued and potentially made issuable pursuant to the Financing is 77,488,800, which represents 82.99% of the current number of the Company's Shares issued and outstanding. The Units are subject to a four month hold period under Canadian Securities legislation. The net proceeds of the Financing will be used for working capital purposes.

Completion of the Financing is subject the approval of the Toronto Stock Exchange (the "TSX") and all other necessary regulatory approvals. No insiders will be participating in the Financing. Following completion of the Financing, Mr. Ross Beatty will be the beneficial owner of 26,003,500 common shares, which includes the Shares underlying the 16,760,000 units purchased pursuant to the Financing, or a total of 19.87% of the capital of the Company. In accordance with TSX requirements, the Company discloses that if only Mr. Beatty's 16,760,000 Warrants and none of the other Warrants issued pursuant to the Financing were exercised, his total shareholdings would represent 28.97% of the capital of the Company.

The Financing involves the private placement of securities representing more than 25% of the Company's currently issued and outstanding Shares and, as a result of the number of Units being issued to Mr. Beatty, the Financing could have a material effect on control of the Company which, under applicable TSX rules, would ordinarily require shareholder approval. However, the Company will rely on the financial hardship exemption under section 604(e) of the TSX Company Manual in order to complete the Financing without shareholder approval. The Company's financial position has deteriorated during the past several months due to the effects of the global financial crisis and precipitous declines in the prices of copper and molybdenum, and has resulted in the Company owing significant negative settlement pricing adjustments.

The Company believes that the Financing will improve Amerigo's financial position, and the independent members of the board of directors of the Company have determined that the Financing is reasonable in the circumstances. The TSX has advised the Company that reliance on this exemption will automatically result in a TSX de-listing review to confirm that the Company continues to meet TSX continued listing requirements. Amerigo believes that it currently complies with applicable TSX listing requirements and expects to continue to comply with such requirements following completion of the Financing.

Amerigo Resources Ltd. is a Canadian company producing copper and molybdenum from its MVC operations near Santiago, Chile.
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