Yukon Zinc Corporation
TSX VENTURE : YZC

Yukon Zinc Corporation

October 04, 2007 17:33 ET

Yukon Zinc Corporation Announces C$140 Million Offering of Securities; Net Proceeds to Fund Wolverine Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 4, 2007) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Yukon Zinc Corporation (TSX VENTURE:YZC) (the "Company") is pleased to announce that it has filed a preliminary prospectus in certain provinces of Canada for a brokered, best-efforts offering of securities (the "Offering") with a syndicate lead by Haywood Securities Inc., co-lead by Paradigm Capital Inc., and including Blackmont Capital Inc. ("the Agents").

Dr. Harlan Meade, President and CEO of the Company said: "We are very pleased to announce this additional financing to complete the project financing for the Wolverine Project. The completion of the Offering will allow us to move on to mine development at Wolverine, which will advance the process of extracting the value out of Wolverine for our shareholders."

The net proceeds will be used to fund the balance of the required Wolverine Project capital funding requirements and for general corporate purposes. The net proceeds of the Offering, less $15 million, will be held in escrow and will be released to the Company in order for it to be able to meet the additional funding requirements of the previously-announced Barclays Capital US$140 million underwritten senior debt facility (see August 27, 2007 News Release).

The completion of the Offering, together with the Barclays Facility, will enable the Company to proceed with construction at the Wolverine Project. In addition, completion of the Offering will enable the Company to consider certain corporate initiatives, which could include applying to the Toronto Stock Exchange for the listing of the Company's securities and a consolidation of the share capital of the Company.

The Offering consists of three components: Debt Units, Convertible Note Units and Equity Units ("the Securities"). The Debt Units will be comprised of unsecured notes and common shares, the Convertible Note Units will be comprised of unsecured notes convertible into common shares and common shares and the Equity Units will consist of one common share and common share purchase warrants, or a fraction thereof, exercisable to purchase common shares.

The three components will aggregate, in total, C$140 million, plus a 10 per cent over allotment option on each component of the Offering. The Agents may also arrange for the sale of the Securities in certain foreign jurisdictions pursuant to applicable securities laws. The Offering is subject to receipt of regulatory approvals and other standard conditions.

The pricing and terms of the Securities will be determined in the context of the market with the closing date expected to be near the end of October, 2007. The Agents will receive a 3.75 per cent selling commission on proceeds from the sale of Debt Units and Convertible Note Units and will receive a 6.00 per cent commission on proceeds from the sale of Equity Units. In addition, the Agents will receive compensation options equal to 6.00 per cent of the number of Equity Units sold. The compensation warrants will have a term of 24 months from the closing date and have an exercise price equal to the issue price of the Common Shares under the Offering.

Yukon Zinc Corporation is focused on the development and construction of the Wolverine zinc silver deposit, as the Yukon's next significant zinc-silver mine and the exploration of the Finlayson District as Canada's newest Volcanogenic Massive Sulphide District.

The securities comprising the Offering have not been registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws, and may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. 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. All dollars in this release refer to Canadian funds.

Except for the statements of historical fact contained herein, the information presented in this News Release constitutes "forward-looking statements" as such term is used in Canadian securities laws. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans, "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and should be viewed as "forward-looking statements". Such forward looking statements, including but not limited to, those with respect to the Offering, the Barclays Facility and the ability of the Company to proceed with construction at the Wolverine Project and the other factors and events described in this News Release, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, the estimation or realization of Mineral Resources and Mineral Reserves (as such terms are defined by applicable Canadian securities regulators); variations in the underlying assumptions associated with conclusions of economic evaluations, including the timing and amount of estimated future production, costs of production, capital expenditures, the failure of plant, equipment or processes to operate as anticipated and possible variations in ore grade or recovery rates; availability of capital to fund programs and the resulting dilution caused by the raising of capital through the sale of shares; risks of the mining industry, including without limitation, those associated with the environment; and delays in obtaining governmental approvals, permits or financing. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that could cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this News Release and in any document referred to in this News Release.

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

Contact Information

  • Yukon Zinc Corporation
    Dr. Harlan Meade
    President and CEO
    (604) 682-5474 Toll Free: 1-877-682-5474
    or
    Yukon Zinc Corporation
    Shae Dalphond
    Manager, Investor Communications
    (604) 682-5474 Toll Free: 1-877-682-5474
    (604) 682-5404 (FAX)
    Email: info@yukonzinc.com
    Website: www.yukonzinc.com
    or
    Wilcox Group
    Brooke McLachlan
    (604) 488-1100
    Email: bmclachlan@wilcoxgroup.com