Key points
- Shareholders of record on May 2, 2005 will receive one transferable right per share, with five rights entitling the holder to buy one common share at 10 cents until May 23, 2005.
- The rights offering could raise gross proceeds of up to $1.7-million, with net proceeds to Afri-Can of up to an estimated $1.6-million.
- Trinity Holdings Pty. Ltd. of South Africa has committed to purchase up to 10 million unsubscribed shares at 10 cents each as a standby commitment.
- Afri-Can will concurrently run a private placement of up to $600,000 at 10 cents per share, including $200,000 from management to fund the first option payment on the Haib project.
Afri-Can Marine Minerals Corp. will issue transferable rights to holders of its common shares. Shareholders of record at the close of business on May 2, 2005, will receive one transferable right for each share held. Every five rights will entitle the holder to subscribe for and purchase one Afri-Can common share at a price of 10 cents, at any time up to 4 p.m. on May 23, 2005. Gross proceeds for the rights offering will be up to $1.7-million. Afri-Can has received a standby commitment from Trinity Holdings Pty. Ltd. of South Africa, whereby Trinity has committed to purchase any unsubscribed shares from the rights offering, up to a maximum of 10 million shares, at a price of 10 cents per share.
The rights will be listed on the TSX Venture Exchange under the symbol AFA.RT from May 2, 2005, to May 23, 2005.
Net proceeds to Afri-Can from the rights offering will be up to an estimated $1.6-million. Afri-Can currently has a total of 85,215,975 common shares issued and outstanding. The rights offering will result in the issuance by Afri-Can of a minimum of 10 million additional common shares and a maximum of 17,043,195 additional common shares.
The rights offering will be made in Alberta, British Columbia, Quebec and Ontario, and in such other jurisdictions where the company is eligible to make such an offer. The rights and shares issuable upon exercise of the rights are not being offered to Canadian shareholders residing outside of the Alberta, British Columbia, Quebec and Ontario, or to residents of the United States, or any country other than Canada. Notwithstanding the foregoing, ineligible shareholders who establish, to the satisfaction of the company, that the receipt by them of rights and the issuance to them of shares upon the exercise of the rights will not be in violation of the laws of the jurisdiction of their residence, will be allowed to exercise the rights.
Concurrently with the rights offering, Afri-Can will proceed with a private placement of common shares at a price of 10 cents per share, for gross proceeds of up to $600,000.
If subscriptions by existing shareholders prevent Trinity from fully exercising its rights offering standby commitment to purchase up to 10 million shares, Trinity will have the right to purchase, through the private placement at a price of 10 cents per share, the number of common shares required for a minimum investment in Afri-Can of $250,000. Furthermore, $200,000 of the private placement will be subscribed by the management of the corporation and proceeds from this private placement will be used to complete the first option payment on the Haib project, for a total of $200,000. The private placement will comprise a maximum of six million common shares, including any shares purchased by Trinity.
Common shares issued pursuant to the private placement will be subject to a four-month hold period. The private placement is subject to regulatory approval.
Proceeds from the rights offering and private placement will be used to reimburse a note payable, to finance exploration programs at Haib, to settle debts of the company and for general working capital purposes.
Trinity is an innovative and entrepreneurial asset management company, founded in September, 2000, by managing director, Quinton George. It provides high-net-worth clients with expert investment advice, as well as a selective range of corporate financial services. Trinity currently manages in excess of 400 million rand.
Pierre Leveille, president and chief executive officer of Afri-Can, stated: “We are very pleased with the strong confidence shown by Trinity in Afri-Can’s business model. Afri-Can management is evaluating possibilities for resuming marine diamond exploration, our core activity, and these financing commitments provide us with the flexibility to pursue exciting growth opportunities.”
