Key points
- The placement is led by Salman Partners Inc., with TD Securities, BMO Capital Markets, GMP Securities, Blackmont Capital and Westwind Partners as co-agents, subject to TSX Venture Exchange approval.
- Nautilus may grant the agents an overallotment option to raise the offering by up to US$15 million, for total gross proceeds of up to US$75 million.
- Each unit consists of one common share and one-half warrant, with each whole warrant exercisable at 130 per cent of the offering price for 24 months.
- Net proceeds will fund exploration and development at the Solwara projects in Papua New Guinea and elsewhere in the western Pacific, alongside a separate US$100 million AIM placing via Numis Securities expected in late January 2007.
Nautilus Minerals Inc. has entered into an agreement with a syndicate of agents led by Salman Partners Inc., and including TD Securities Inc., BMO Capital Markets, GMP Securities LP, Blackmont Capital Inc. and Westwind Partners Inc. to proceed with a fully marketed private placement on a reasonable best-efforts basis of units for gross proceeds of up to $60-million (U.S.), subject to the approval of the TSX Venture Exchange. The units will be priced in the context of the market and the offering price will be disclosed in due course.
The net proceeds of the offering will be used to advance the company’s exploration and development activities at the Solwara projects in Papua New Guinea and the other areas in the western Pacific Ocean region, and for general working capital purposes.
The offering is expected to close in the second half of February, 2007.
David Heydon, Nautilus chief executive officer, comments: “At Nautilus, we are pleased that, in addition to the recent substantive investments by major international mining companies, we have the opportunity, with Salman Partners and the other syndicate members, to broaden our capital base in North America. This offering will further strengthen Nautilus’s capital position in conjunction with the recently announced $100-million AIM placing and allow us to accelerate our growth.”
Offering terms
Each unit will consist of one common share of the company and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to acquire one additional common share of the company at an exercise price equal to 130 per cent of the offering price, for a period of 24 months from the date of issuance thereof. The company may, at its option, grant to the agents an overallotment option, exercisable at any time up to two days prior to the closing of the offering, to increase the size of the offering by up to $15-million (U.S.) for total gross proceeds of up to $75-million (U.S.).
The warrants will be subject to an acceleration clause whereby, if the volume weighted average closing price of Nautilus’s shares on the TSX Venture Exchange exceeds 1.5 times the offering price on the day of closing for 20 days, Nautilus may give notice to the holders of the warrants that the warrants will expire if not exercised within 30 days. Such notice by Nautilus to the holders of the warrants may not be given until four months and one day after the closing.
The agents will receive a 5-per-cent cash commission of the gross proceeds of the offering on the closing and broker warrants exercisable in the total for common shares equal in number to 165,000 plus 1 per cent of the number of units sold pursuant to the offering.
In accordance with applicable Canadian law and TSX Venture Exchange policies, the securities issued under the North American placing and the AIM placing (defined below) may not be sold or otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada, or to or for the benefit of a Canadian resident for a four-month period following the closing of the placings.
United Kingdom admission to AIM and associated private placement
In a separate announcement and under a separate engagement letter, Nautilus has announced that it has engaged London-based investment bank, Numis Securities Ltd., to act as nominated adviser and broker in respect of a proposed admission to trading of its common shares on the Alternative Investment Market (AIM) of the London Stock Exchange PLC early in 2007.
The Numis mandate includes an equity capital raising (the AIM placing) to raise $100-million (U.S.) or such higher amount as may be agreed between Numis and the company by the issue of new common shares contemporaneously with admission, which is expected to take place at the end of January, 2007.
Neither the offering nor the AIM placing is dependent one upon the other and each is an unconnected event, save that the company has agreed that, if gross proceeds of $100-million (U.S.) are raised under the AIM placing and the offering closes within 90 days of the AIM placing, the offering will not take place at a price below that at which shares are issued under the AIM placing.
