Welcome To The Genco Resources HUB On AGORACOM

Edit this title from the Fast Facts Section

Message: Completes First Tranche of $5 Million Private Placement

Completes First Tranche of $5 Million Private Placement

posted on May 13, 2009 04:41AM
May 12, 2009
Genco Completes First Tranche of $5 Million Private Placement
VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 12, 2009) -


Genco Resources Ltd. (TSX:GGC) is pleased to advise it has completed the first tranche of its fully subscribed CAD $5 million private placement by issuing 15,633,000 units at a price of CAD $0.24 per unit for gross proceeds of CAD $3,751,920. Each unit consisted of one common share and one warrant to purchase a further share for CAD $0.35 for a period of three years. One of Genco's Co-Chairmen, James R. Anderson, purchased CAD $2 million of the first tranche. Casimir Capital L.P. of New York, NY acted as agent and has advised Genco that it has subscriptions for the balance of the placement. It is intended the balance will be completed in two additional tranches by June 3, 2009.

Genco's Co-Chairman, Robert C. Gardner, comments that, "Genco has faced significant hurdles and securing this financing is a key step in our drive to overcome those challenges. We remain optimistic about Genco's future and graciously thank our shareholders for their continued support. Part of the proceeds of this financing will allow us to complete and release our Feasibility Study, which will demonstrate the economic viability of expanding production at our La Guitarra Mine."

Casimir was paid a fee of CAD $139,833 (8% of the proceeds from the placement other than from units purchased by insiders of Genco) and issued 364,150 broker's warrants (5% of the number of units sold by Casimir other than from units purchased by insiders of Genco). Each broker warrant is exercisable to purchase one share at CAD $0.35 for a period of three years.

As part of a 'gypsy swap' carried out in conjunction with the first tranche, Mr. Anderson entered into loan agreements with three subscribers, whereby they borrowed 3,928,000 common shares from his personal shareholdings and pledged to him an equal number of common shares as security for such loans. In consideration for the loans, the subscribers have delivered 1,964,000 share purchase warrants to Mr. Anderson. The shares pledged and warrants delivered were purchased by the subscribers through the placement.

Genco understands that, in connection with the second tranche, Mr. Anderson intends to purchase a further 1,000,000 units as part of a gypsy swap in which he sold 1,000,000 shares from his personal shareholdings in a pre-arranged trade prior to the completion of the first tranche. Genco further understands that Mr. Anderson will transfer 500,000 warrants from such units to the purchaser of such shares as consideration for purchasing the shares from him.

Genco relied on the financial hardship exemption in section 604(e) of the TSX Company Manual to complete the first tranche of the placement without shareholder approval. Genco intends to continue to rely on the financial hardship exemption in section 604(e) of the TSX Company Manual to complete the next two tranches without shareholder approval. The Toronto Stock Exchange advised Genco on April 22, 2009 that, in light of Genco's recently announced financial situation, it is reviewing Genco's compliance with the Exchange's listing requirements. Genco has been granted 120 days in which to attain and confirm compliance with these requirements. Genco believes that completion of the private placement will result in compliance with the requirements.

About Genco Resources Ltd.

Genco's core asset is the producing La Guitarra silver-gold mine, located in the Temascaltepec Mining District of Mexico. La Guitarra Mine currently consists of two underground operation centres - La Guitarra and San Rafael - and a flotation mill with a proven capacity of 320 tonnes per day. Genco believes significant potential exists to expand production within the 39,714 hectares of mining concessions it currently owns or leases in the Temascaltepec Mining District.
New Message
Please login to post a reply