Great Harvest Canadian Investment Company Limited

October 19, 2010 18:36 ET

Acquisition of Common Shares and Warrants of Adex Mining Inc.

TORONTO, ONTARIO--(Marketwire - Oct. 19, 2010) - Great Harvest Canadian Investment Company Limited ("Great Harvest") has today acquired 40,000,000 Units of Adex Mining Inc. ("Adex") by way of a private placement at a price of $0.12 per Unit, with each Unit consisting of one common share of Adex ("Common Share") and one Series A common share purchase warrant ("Warrant"). Each Warrant entitles the holder to acquire one Common Share at a price of $0.18 at any time prior to the earlier of (i) October 19, 2011, and (ii) the 30th day following the delivery by Adex of the report of the results of a definitive feasibility study (the "Feasibility Study") on the commencement of mining operations at either or both of the North Zone or the Fire Tower Zone of the Mount Pleasant Mine property of Adex.

As a result of the issuance of the common shares forming part of the Units, Great Harvest owns and controls 40,000,000 Common Shares, representing 29.3% of the outstanding Common Shares. Upon exercise of all of the Warrants, Great Harvest would own 45.3% of the outstanding Common Shares (without giving effect to any other Common Shares that may be issued in the future).

Great Harvest acquired the Units for investment purposes. Great Harvest may increase or reduce its investment in Adex according to market conditions or other relevant factors, and as described below.

Pursuant to the subscription agreement under which the Units were issued (the "Subscription Agreement"), and subject to (i) the results of the Feasibility Study being satisfactory to Great Harvest and (ii) the then capital requirements of Adex as determined at the relevant time by the board of directors of Adex, Great Harvest shall provide for or arrange for the provision to Adex of loan financing in an aggregate amount of up to $50,000,000, whether in a lump sum or in multiple tranches, upon terms and conditions to be determined. Great Harvest has the right (the "Share Purchase Right"), to the extent that such loans in an aggregate minimum amount of $10 million are made available by Great Harvest or a third party financier(s) arranged for by Great Harvest to be drawn down by Adex on or before the date which is 180 days following the delivery to Great Harvest by Adex of the report of the results of the Feasibility Study, to purchase 1.2 common shares of Adex by way of private placement for each dollar made available for drawdown under such loan(s) on the relevant Drawdown Date (as defined below) to the extent that the Drawdown Date is on or before the date which is one year following the delivery to Great Harvest by Adex of the report of the results of the Feasibility Study. The Share Purchase Right shall be exercisable by Great Harvest giving notice in writing to Adex within 40 calendar days of the date on which any of the aforesaid debt financing is made available to be drawn down by Adex (each a "Drawdown Date").
The maximum number of Common Shares issuable pursuant to the Share Purchase Right shall be 60,000,000. The Common Shares issuable pursuant to the Share Purchase Right shall be issuable at a price per Common Share (the "Discounted Exercise Price") equal to the weighted average trading price of the Common Shares on the TSX Venture Exchange (the "Exchange") for the five consecutive trading days ending on the last trading day immediately prior to the relevant Drawdown Date (in the event that no Common Shares are traded on the Exchange during such five-day period, the exercise price per Common Share pursuant to the exercise of the Share Purchase Right will be determined based on the average of the closing bid and ask prices for the Common Shares on the Exchange for each day in such five-day period), less the maximum discount therefrom permitted by the definition of Discounted Market Price as set forth in Policy 1.1 of the Exchange (or such provision of the Policies of the Exchange which is enacted from time to time in replacement or amendment of such definition). If the Exchange will not accept the listing thereon of the Common Shares underlying the Share Purchase Right if such Common Shares are to be issued at such discount to the said weighted average trading price, the Common Shares issuable pursuant to the exercise of the Share Purchase Right shall be issuable at such higher price which represents the lowest price permitted by the Exchange. For this purpose, the "closing price" referred to in the definition of Discounted Market Price shall be deemed to be the weighted average trading price of the Common Shares on the Exchange for the five consecutive trading days referred to above. Any issuance of Common Shares pursuant to the exercise of the Share Purchase Right shall be subject to the prior approval of the Exchange.

Pursuant to a condition in the Subscription Agreement, each of Errol Farr, the President and Chief Executive Officer of Adex, and William Burton, a director of Adex, has provided to Great Harvest an undertaking that he will not, prior to October 19, 2011, dispose of, or enter into an agreement that could result in his disposition of, Common Shares owned or controlled by him as of August 18, 2010, the date of the Subscription Agreement, as disclosed in the management information circular of Adex dated June 24, 2010, subject to certain exceptions.

Contact Information

  • Great Harvest Canadian Investment Company Limited
    Lau Ying Kit, Joseph or Yau Chuen Leung
    (852) 2836-6801