PGM Ventures Corporation

PGM Ventures Corporation

May 16, 2006 16:42 ET

PGM Ventures Corporation-News Release

TORONTO, ONTARIO--(CCNMatthews - May 16, 2006) - PGM Ventures Corporation (TSX VENTURE:PPG) - The board of PGM Ventures Corporation ("PGM") is pleased to announce that it has closed the financing announced April 28, 2006. PGM issued 10,000,000 units of PGM ("Units") at a price of $3.00 per Unit for gross proceeds of $30,000,000. Each Unit is comprised of one (1) common share (a "Common Share") and three (3) subscription receipts (a "Subscription Receipt") of PGM. Each Subscription Receipt entitles the holder thereof to acquire, without payment of any additional consideration, one Common Share. Initial gross proceeds amounted to $7,500,000. As previously announced, the balance of the gross proceeds, being $22,500,000, is being held in escrow until certain escrow release conditions are met. MGI Securities Inc., Orion Securities Inc. and Canaccord Adams acted as co-lead underwriters in the offering.

The Subscription Receipts, which are exercisable by the holders at any time, will be automatically exercised for Common Shares, and the escrowed proceeds of $22,500,000 (plus accrued interest) will be automatically released to PGM, upon the receipt by PGM's subsidiary in Spain of permits from the applicable Spanish authorities for: (i) Reinicio de la Explotacion en Mina de Aguas Tenidas (Re-start of the Exploitation at Aguas Tenidas Mine) and (ii) Ampliacion de la actividad en Mina de Aguas Tenidas con la Construccion de una Planta de Tratamiento de Mineral y un Deposito de Esteriles (Expansion of the activity at Aguas Tenidas Mine with a Construction of an Ore Treatment Plant and Tailings Deposit). If such permits are not received on or before the 6 month anniversary of the closing of the offering, PGM shall be required to repurchase the outstanding Subscription Receipts for cancellation at a price of $0.75 per Subscription Receipt plus a pro rata share of accrued interest.

MGI Securities Inc., Orion Securities Inc. and Canaccord Adams received cash commission of 6% of the gross proceeds and compensation options entitling them to acquire up to 2,400,000 Common Shares at an exercise price per Common Share of $0.75 at any time for a period of 12 months from the date of closing of the offering.

PGM will use the net proceeds of the offering for working capital purposes and to begin the construction of the Aguas Tenidas mine in Southern Spain.

This press release, required by applicable Canadian securities law, 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 emended, 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.

This press release includes certain "Forward-Looking Statements" within the meaning of the US Private Securities Reform Act of 1995. Other than statements of historical fact, all statements are "Forward-Looking Statements" that involve such various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove accurate. Results and future events could differ materially from those anticipated in such statements. Readers of this press release are cautioned not to place undue reliance on these "Forward-Looking Statements". All dollar amounts are Canadian dollars unless otherwise noted.

The TSX Venture Exchange Inc. has neither approved nor disapproved the information herein contained.

Contact Information

  • PGM Ventures Corporation
    Peter Miller or Norm Brewster
    (416) 815-8666