Northern Star Mining Corporation
TSX VENTURE : NSM

Northern Star Mining Corporation

July 24, 2009 16:01 ET

Northern Star Completes Financing for CDN$22,537,458

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 24, 2009) -

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWS AGENCIES

Northern Star Mining Corp. (TSX VENTURE:NSM) is pleased to announce that further to its news releases of July 7 and 14, 2009 it has today completed the private placement financing for CDN$22,537,458 (the "Financing") with the syndicate of agents led by Casimir Capital L.P. and including Canaccord Capital Corporation and Wellington West Capital Markets Inc. (collectively the "Agents') consisting of 36,643,000 unit subscription receipts (the "Unit Subscription Receipts") at a price of CDN$0.50 per Unit Subscription Receipt for gross proceeds of CDN$18,321,500 and 7,528,497 flow-through subscription receipts (the "Flow-Through Subscription Receipts") at a price of CDN$0.56 per Flow-Through Subscription Receipt for gross proceeds of CDN$4,215,958. The Company has also received subscriptions for an additional 1,350,000 Unit Subscription Receipts totaling CDN$675,000 which it anticipates closing early next week upon receipt of wire transfer funds.

100% of the gross proceeds of the Financing is being deposited in escrow with Computershare Trust Company of Canada ("Computershare"), as subscription receipt agent, pending completion of a satisfactory restructuring of the US$42,000,000 debt financing of senior secured notes (the "2008 Notes") issued by the Company pursuant to an indenture with Computershare on August 13, 2008 to provide for (a) the extension of the maturity date of the 2008 Notes for one year to August 13, 2011, August 15, 2011 and September 8, 2011, as applicable (b) the consent of the holders of the 2008 Notes (the "2008 Note Holders") to a new net smelter convertible loan facility and accompanying security (the "Royalty Facility") (see the Company's news release of July 7, 2009) and (c) the cancellation of up to 45,000,000, but not less than 35,000,000, share purchase warrants issued to the 2008 Note Holders as part of the 2008 Note financing (collectively the "Release Conditions"). If the Release Conditions are not satisfied on or before August 31, 2009, the full amount of the Financing, together with any accrued interest thereon, will be returned to the purchasers thereof.

Upon satisfaction of the Release Conditions, the Company will prepay up to CDN$15,000,000 of the 2008 Notes from, inter alia, the proceeds of sale of the Unit Subscription Receipts. The balance of the proceeds from the sale of Unit Subscription Receipts, together with the proceeds of the Royalty Financing (CDN $8,000,000), will be used to fund further exploration of the Company's mineral resource properties, capital expenditures and for general working capital purposes.

Each Unit Subscription Receipt will entitle the holder thereof to automatically receive, without payment of additional consideration, one unit of the Company (a "Unit") upon satisfaction of the Release Conditions. Each Unit will consist of one common share and one-half (1/2) of one transferable common share purchase warrant. Each whole warrant will entitle the holder to purchase one additional common share at a price of CDN$0.70 for a period of 36 months from the date of issuance.

Each Flow-Through Subscription Receipt will entitle the holder thereof to automatically receive, without payment of additional consideration, one "flow-through" common share of the Company upon satisfaction of the Release Conditions.

The gross proceeds from the sale of the Flow-Through Subscription Receipts will be used to fund exploration on the Company's Quebec properties which qualifies as "Canadian exploration expense" and can be renounced to the purchasers under the Income Tax Act (Canada).

The Company will also pay the Agents a cash commission of 7% of the total proceeds raised pursuant to the Financing and agents' warrants (the "Agents' Warrants") of 7% of the total number of Unit Subscription Receipts and Flow-Through Subscription Receipts sold upon satisfaction of the Release Conditions. Each Agents' Warrant will entitle the holder thereof to purchase one common share of the Company at a price of CDN$0.50 for a period of 36 months from the date of issuance.

All securities issued under the Financing pursuant to today's closing are subject to a hold period of four months and a day expiring November 25, 2009.

ON BEHALF OF THE BOARD

Jonathan Awde, VP Corporate Finance

This news release contains forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Investors are cautioned that these forward looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected. These forward-looking statements are made as of the date hereof and, except as required under applicable securities legislation, the Company does not assume any obligation to update or revise them to reflect new events or circumstances.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

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

Contact Information

  • Northern Star Mining Corporation
    Jonathan Awde
    VP Corporate Finance
    TOLL FREE (800) 460-5031 or (819) 825-8088
    (819) 825-1199 (FAX)
    www.nsmgold.com