/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS./
TORONTO,
Dec. 4, 2013 /CNW/ - Ecuador Gold
& Copper Corp. (TSXV: EGX) (the "Company") is pleased to
announce that it has closed the fourth and final tranche (the
"Final Tranche Closing") of its non-brokered private
placement for gross proceeds of up to US$3,250,000 (the "Private
Placement").
A total of US$150,000 (C$159,150) was raised pursuant to the Final
Tranche Closing, by the issuance to Aura International Services
Ltd. ("Aura") of 2,000,000 units (each a
"Unit") of the Company at a price of US$0.075 per Unit. Each Unit is comprised of one
common share (a "Share") of the Company and one common share
purchase warrant (a "Warrant") of the Company. Each Warrant
entitles the holder to acquire a Share at a price US$0.075 per Share until September 15, 2014.
Upon closing of the Final Tranche, Aura owns a
total aggregate of 89,730,256 Shares and 53,174,585 common shares
purchase warrants (the "Aura Warrants") of the Company,
representing approximately 45.18% of the issued and outstanding
Shares of the Company on a non-diluted basis, 45.73% on a partially
diluted basis after giving effect to exercise of the Aura Warrants,
and 56.3% on an extended partially-diluted basis after giving
effect to exercise of all of the Warrants held by Aura after
completion of the Final Tranche Closing. Prior to the Final Tranche
Closing, Aura owned 44.9% of the Company's issued and outstanding
Shares on a non-diluted, 48.7% of the Company's issued and
outstanding Shares on a partially diluted basis, and 56.7% on an
extended partially-diluted basis. In exchange for the
purchase by Aura of all of the Units under the Private Placement
and the exercise of the Warrants contained in the Units providing
aggregate gross proceeds of US$6.2
million to the Company, Aura will be entitled to nominate up
to three directors of the Company.
All Warrants issued to Aura in conjunction with
the total private placement of $3.25
million have an expiry date of September 15, 2014.
Aura is a "related party" to the Company under
MI 61-101 as it is a "control person" of the Company by virtue of
its shareholdings in excess of 20% of all issued and outstanding
Shares of the Company. Accordingly, the Final Tranche Closing of
the Private Placement is a "related party transaction" under MI
61-101.
Effective August 14,
2013, the Private Placement was unanimously approved by the
board of directors of the Company. On October 11, 2013, the Company also received
minority shareholder approval for the Private Placement pursuant to
Multilateral Instrument 61-101 Protection of Minority Security
Holders in Special Transactions ("MI 61-101") at a
special meeting of the shareholders of the Company held on
October 11, 2013
(the "Shareholders' Meeting").
On November 6,
2013 the Company agreed to the subscription by Aura of the
Units pursuant to a subscription agreement containing the customary
provisions for the subscription of units of a reporting issuer with
such shares comprising the Units posted and listed for trading on
the Exchange.
There has been no formal valuation of the
Company or its assets to date, as there has not yet been any
necessity to do so. The Private Placement is a transaction
that is exempt from the formal valuation requirements under
Section 5.4 of MI 61-101 pursuant to Subsections 5.5(b) and
5.5(c) of MI 61-101 because:
(a) |
no securities of the Company are listed or quoted on the
Toronto Stock Exchange, the New York Stock Exchange, the American
Stock Exchange, the NASDAQ Stock Market, or a stock exchange
outside of Canada and the United States other than the Alternative
Investment Market of the London Stock Exchange or the PLUS markets
operated by PLUS Markets Group plc.; and |
(b) |
the Private Placement is a distribution of securities of the
Company to Aura for cash consideration, and |
|
(i) neither the Company nor, to the Company's knowledge after
reasonable inquiry, Aura has knowledge of any material information
concerning the Company or its securities that has not been
generally disclosed; and |
|
(ii) the Company's management information circular dated
September 10, 2013 in respect of the Shareholders' Meeting fully
describes the Private Placement and includes a description of the
effect of the Private Placement on the direct and indirect voting
interest of Aura. |
|
|
Aura purchased all of the Units under the Final
Tranche Closing. The proceeds of the Final Tranche Closing will be
used for exploration and development expenses, and as additional
working capital. The Units issued are subject to a four‐month hold
period from the date of issuance.
Cautionary Note
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Ecuador Gold and Copper Corp.