Arcan Resources Ltd.
TSX VENTURE : ARN

Arcan Resources Ltd.

March 24, 2010 16:16 ET

Arcan Resources Announces Closing of $65 Million Equity Financing

CALGARY, ALBERTA--(Marketwire - March 24, 2010) -

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 LAW.

Arcan Resources Ltd. ("Arcan") (TSX VENTURE:ARN) is pleased to announce that it has completed its previously announced private placement offering of 26,000,000 subscription receipts ("Subscription Receipts") of Arcan (the "Offering"). Each Subscription Receipt was issued at a price of $2.50 for aggregate gross proceeds of $65,000,000. The Offering was completed through a syndicate of investment dealers led by Haywood Securities Inc. and including Wellington West Capital Markets Inc., Paradigm Capital Inc. and Macquarie Private Wealth Inc. (collectively, the "Agents"). In connection with the Offering, Arcan has agreed to pay to the Agents a fee equal to 6% of the aggregate gross proceeds.

Each Subscription Receipt will entitle the holder to receive, without payment of additional consideration, one common share of Arcan on the deemed exercise of the Subscription Receipt. Each Subscription Receipt issued pursuant to the Offering will be deemed to be exercised on the later to occur of: (i) a written notice executed by Arcan is delivered to the trust company holding the proceeds of the Offering confirming that all conditions, undertakings and other matters to be satisfied, completed and otherwise met prior to the completion of the acquisition (the "Acquisition") by Arcan of interests in 102 gross (81 net) sections of land in the Swan Hills area of Alberta (as previously disclosed in Arcan's press release dated February 19, 2010) have been satisfied, completed or otherwise met, other than the payment of the consideration to be paid pursuant to the Acquisition; and (ii) the issuance of a final receipt for a final short form prospectus in each province of Canada where Subscription Receipts have been sold qualifying the distribution of the common shares underlying the Subscription Receipts (the "Exercise Conditions"). The gross proceeds from the Offering will be held in escrow with an escrow agent and will not be released to the Arcan until the Exercise Conditions have been met. If the Exercise Conditions have not been satisfied on or before 11:59 p.m. on March 31, 2010, or if the Acquisition is terminated prior to that date, the gross proceeds of the Offering and interest will be returned by the escrow agent to the holders of the Subscription Receipts.

The Acquisition is expected to close on or about March 31, 2010. Net proceeds beyond the purchase price of the Acquisition will be used to fund exploration and development drilling on its properties as part of its 2010 capital program and for general working capital purposes.

These securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or the securities laws of any state, and may not be offered or sold in the United States unless an exemption from registration is available. This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities in the United States.

Advisory Regarding Forward-Looking Information and Statements

This press release contains certain forward-looking information and forward-looking statements within the meaning of applicable securities laws (collectively, "forward-looking information"). The use of any of the words "expect", "anticipate", "continue", "estimate", "guidance", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the foregoing, this press release contains forward-looking information pertaining to: the anticipated closing of the Acquisition, the Exercise Conditions and the anticipated use of proceeds of the Offering.

The forward-looking information contained in this press release reflects several material factors and expectations and assumptions of Arcan including, without limitation: the timing of receipt of regulatory approvals, including the TSX Venture Exchange and third party consents, the satisfaction of the conditions that will enable Arcan to meet the Exercise Conditions and complete the Acquisition and assumptions as to the continued business operations of Arcan. Arcan believes the material factors, expectations and assumptions reflected in the forward-looking information are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct. The forward-looking information included in this press release is not a guarantee of future performance and should not be unduly relied upon. Such information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information including, without limitation: unforeseen changes in the business or operations of Arcan, unforeseen delays in preparing materials for filing, inability to obtain necessary regulatory approvals in the time assumed or failure to satisfy the conditions required to meet the Exercise Conditions or close the Acquisition.

The forward-looking information contained in this press release is made as of the date hereof, and Arcan undertakes no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required pursuant to applicable securities laws.

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.

Contact Information

  • Arcan Resources Ltd.
    Ed Gilmet
    President and Chief Executive Officer
    (403) 262-0321
    or
    Arcan Resources Ltd.
    Douglas Penner
    Vice President, Finance and Chief Financial Officer
    (403) 262-0321
    or
    Arcan Resources Ltd.
    Suite 3200, 450 - 1st Street SW
    Calgary, Alberta T2P 5H1
    info@arcanres.com
    www.arcanres.com