North Atlantic Resources Ltd.

North Atlantic Resources Ltd.

August 14, 2009 14:26 ET

North Atlantic Announces Increase in Proposed Private Placement and Increased Insider Participation

TORONTO, ONTARIO--(Marketwire - Aug. 14, 2009) -


North Atlantic Resources Ltd. ("the Company") (TSX:NAC) announces that it has increased the size of its proposed private placement described in the press release issued on August 13, 2009. The maximum number of units issuable pursuant to the private placement has been increased to 10,000,000 units, which would result in gross proceeds of $500,000. As described in the August 13 press release, the Company may pay finder's fees to registered dealers who introduce subscribers to the Company, comprised of a cash payment of 8% of the proceeds received from introduced subscribers and a number of warrants (having terms identical to the warrants included in the units) equal to 8% of the number of units issued to introduced subscribers. The Company has also agreed to amend the terms of the warrants included in the units, such that the Company will not have the right to accelerate the expiry date of the warrants.

The Company currently has 25,723,741 issued and outstanding common shares. If the maximum offering is completed, 10,000,000 common shares would be issued, and 10,800,000 warrants would be issued pursuant to the maximum offering (including the maximum number of warrants issuable in connection with the finder's fees). If all warrants are exercised, an aggregate of 20,800,000 shares would be issued in connection with the private placement, representing 80.9% of the number of currently outstanding shares.

In addition, Anthony Lloyd, a director of the Company who currently holds 628,607 common shares of the Company (representing 2.4% of the 25,723,741 currently outstanding shares) intends to subscribe for 300,000 units pursuant to the private placement (being 3% of the maximum offering of 10,000,000 units). Following completion of the maximum offering Mr. Lloyd will hold 928,607 shares, which will represent 2.6% of the 35,723,741 shares which will be outstanding following completion of the maximum offering (before giving effect to the issuance of any warrants). If Mr. Lloyd exercises all of his warrants he would hold 1,228,607 shares, representing 3.4% of the 36,023,741 shares which would then be outstanding (without giving effect to the exercise of warrants held by other subscribers).

In total, it is expected that insiders of the Company will subscribe for an aggregate of 1,350,000 units, such that the maximum number of shares which may be acquired by insiders pursuant to the placement (including shares issuable upon exercise of warrants) is 2,700,000, being 10.5% of the currently outstanding shares. In accordance with the rules of the Toronto Stock Exchange (TSX), shareholder approval is generally required when the number of common shares issued or made issuable pursuant to a private placement exceeds 25% of the number of currently issued and outstanding shares of the Company, and also when the number of common shares issued or made issuable to insiders during any six month period exceeds 10% of the number of currently issued and outstanding shares of the Company. The Company has applied to the TSX under the provisions of subsection 604(e) of the TSX Company Manual for an exemption from the shareholder approval requirement on the basis that the Company is in financial difficulty and does not have sufficient time to obtain shareholder approval. A special committee of independent directors of the Company has reviewed the amended terms of the proposed private placement, and determined that the terms are reasonable for the Company in the circumstances. The Company is confident that, upon completion of the proposed private placement, the financial position of the Company will be substantially improved. Use of the exemption under subsection 604(e) of the TSX Company Manual is subject to TSX approval.

This news release is intended for distribution in Canada only and is not intended for distribution to United States newswire services or dissemination in the United States. The securities being offered have not, nor will they be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

Please visit the Company's website to view project details and planned exploration programs.

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