Cypress Hills Resource Corp.

Cypress Hills Resource Corp.

March 10, 2010 13:44 ET

Cypress Hills Resource Corp.: Private Placement Financing and Settlement of Debt

CALGARY, ALBERTA--(Marketwire - March 10, 2010) -


Cypress Hills Resource Corp. (the "Company") (TSX VENTURE:CHY) announces a number of transactions to fund its working capital deficiency, settle all of its outstanding debentures for shares or units and fund its on-going corporate activities.

Firstly, the Company has agreed to complete a non-brokered private placement (the "Offering") of up to 3,000,000 ("Units") at a price of $0.16 per Unit to raise aggregate gross proceeds of up to $480,000. Each Unit will consist of one common share ("Common Share") and one share purchase warrant ("Warrant") of the Company. Each whole Warrant will entitle the holder thereof to acquire one additional Common Share for a period of two years from the date of issuance at an exercise price of $0.21 per Warrant. A cash commission of 5% equal to the gross proceeds of the Offering may be payable.

Secondly, the Company has agreed to issue 1,875,000 Units in settlement of indebtedness to arms-length parties in the amount of $300,000 (the "Debt Settlement").

Lastly, the Company has agreed to issue a total of 3,634,375 common shares of the Company in settlement of $581,500 of indebtedness to insiders of the Company at a price of $0.16 per Common Share (the "Insider Debt Settlement"). Of this amount, Ted Fostey, President and Chief Executive Officer of the Company, and a company controlled by him, will receive 2,415,625 shares. As a result, Mr. Fostey will hold directly and indirectly a total of 2,678,920 shares, representing approximately 31.46% of the issued and outstanding share capital prior to the completion of the private placement and approximately 23.26% of the issued and outstanding share capital if the private placement is fully subscribed. At a shareholders' meeting held on July 24, 2009, the shareholders approved the Debt Settlement and Insider Debt Settlement with Mr. Fostey.

All securities issued under the Offering, the Debt Settlement and the Insider Debt Settlement will be subject to a four month hold period from the date of issue. The above transactions are subject to the finalization all of the necessary agreements and the receipt of regulatory approvals.


Ted Fostey, President and Chief Executive Officer

Forward-looking statements:

Certain information set forth in this news release contains forward-looking statements and information ("forward-looking statements"). More particularly, this news release contains statements concerning the completion of the Offering, the Debt Settlement and the Insider Debt Settlement. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so what benefits the Company will derive therefrom. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, the Company does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy securities in any jurisdiction.

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

  • Cypress Hills Resource Corp.
    Ted Fostey
    President and Chief Executive Officer
    (403) 265-7663