Gold Canyon Resources Inc.
TSX VENTURE : GCU

Gold Canyon Resources Inc.

May 13, 2005 07:30 ET

Gold Canyon Proposes Private Placement of Up to $750,350

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 13, 2005) - Gold Canyon Resources Inc. (TSX VENTURE:GCU) ("Gold Canyon" or "the Company") is pleased to report that it has entered into an agreement with Pacific International Securities Inc. (the "Agent") to undertake a best efforts private placement of up to 833,500 Flow Through Shares at a price per Share of $0.60 for gross proceeds of up to $500,100. The Company has also agreed to an over-allotment option which will allow for an additional 166,700 Flow Through Shares to be offered under the same terms as above.

The Company has agreed to pay the Agent a commission of 8% of the gross proceeds of the offering, payable in cash or, at the election of the Agent and subject to regulatory approval, in common shares at a deemed price equal to $0.60 per share. The Agent will also be entitled to receive a broker's option to purchase that number of common shares equal to 15% of the total number of Flow Through Shares sold under the brokered private placement on or before the eighteen month anniversary of the closing date at an exercise price of $0.65 per share.

The Company will also concurrently undertake a non-brokered private placement of up to 385,000 Flow Through Units at a price per Unit of $0.65 for maximum gross proceeds of $250,250 with certain directors and officers of the Company and certain eligible investors. Each Unit shall consist of one flow-through common share of the Company and one half of one non-transferable share purchase warrant, each whole warrant entitling the holder to purchase an additional non-flow-through common share of the Company on or before the eighteen month anniversary of the closing date at a price of $0.70 per common share. A finders fee of 8% will be payable in cash on the non-brokered portion of the private placement.

The private placement is subject to the requisite filings with the TSX Venture Exchange and applicable securities laws. All securities issued with respect to the private placement will be subject to a hold period of four months from the closing date in accordance with the policies of the TSX Venture Exchange and applicable Canadian securities laws and such other further restrictions as may apply under foreign securities laws, if applicable.

The net proceeds will be used to extend the Winter / Spring 2005 drilling program at the Company's Springpole Lake Gold Project located in the Red Lake area of Ontario. This drill program commenced on February 16, 2005 and management has been encouraged by the results to date and wishes to continue to drill additional targets. The Company will also continue the geological mapping program that was started in the Summer 2004 to take advantage of the lower lakeshore levels. The net proceeds will be used for eligible Canadian Exploration Expenses ("CEE") as defined in subsection 66.1(6) of the Income Tax Act (Canada).

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Gold Canyon is engaged in the acquisition and exploration of mineral and precious metals properties and currently owns and operates the Springpole Gold Project in the Red Lake Mining District of Ontario, Canada and its Cordero Gallium Project in Humboldt County, Nevada, U.S.A. Additional information can be found on the Company's website: http://www.goldcanyon.ca.

Robert Carrington, Chief Executive Officer & Director

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Gold Canyon Resources Inc.
    Ron Schmitz
    Director
    (604) 682-3234
    (604) 682-0537 (FAX)
    or
    Gold Canyon Resources Inc.
    Ken Faulkner
    Investor Communications, Corporate Development
    (250) 862-0724
    http://www.goldcanyon.ca