Auracle Resources Ltd.

Auracle Resources Ltd.

November 30, 2010 18:33 ET

Auracle Resources Ltd. Announces Closing of $3,343,000 Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 30, 2010) - Auracle Resources Ltd. (the "Company") –

Escrow Share Transfer

The Company wishes to announce that on November 23, 2010 a private sale and transfer of common shares in the capital stock of the Company ("Shares") was completed between certain of its shareholders and Elgin Mining Inc. ("Elgin") of Toronto, Ontario, pursuant to which Elgin acquired 1,800,000 Shares at a price of $0.02 per share. The remaining Shares of the selling shareholders, and the Shares acquired by Elgin, are held in escrow pursuant to an escrow agreement dated November 25, 2010 ("Escrow Agreement"), which will make them subject to TSX Venture Exchange ("Exchange") escrow release provisions, upon the anticipated acceptance of the Company's common shares for trading on the Exchange.

Non-Brokered Private Placement

On November 25, 2010, the Company also closed a non-brokered private placement of 10,315,000 units (the "Units") in the capital stock of the Company, at a price of $0.20 per Unit, each Unit consisting of one Share and one share purchase warrant ("Warrant") entitling the holder to acquire one additional Share of the Company at a price of $0.30 per Share until November 25, 2011. The Company realized $2,063,000 on closing of this private placement and paid a finder's fee of $60,000 and 500,000 Agent's Warrants to Haywood Securities Inc. for introducing certain of the placees to the Company.

Elgin, one of the subscribers of the Units, acquired 10,000,000 Units. These Shares, any Shares issued to Elgin on exercise of the Warrants, and the 1,800,000 escrow transfer shares held by Elgin pursuant to the Escrow Share Transfer described above, will result in Elgin holding 35.31% in the Company's issued and outstanding share capital after the closing of the brokered private placement disclosed below if no Warrants are exercised.

Brokered Private Placement

On November 26, 2010, the Company closed a brokered private placement of 6,400,000 subscription receipts ("Subscription Receipts") for proceeds to the Company of $1,280,000. Each Subscription Receipt is exercisable, for no additional consideration, into one unit ("Unit") of the Company comprised of one Share and one Warrant. Each Warrant entitles the holder to acquire one Share ("Warrant Share") of the Company until November 26, 2011 at a price of $0.30 per Warrant Share.

MOI Escrow Services Ltd. will act as Escrow Agent (the "Agent") for the Subscription Receipts offering. Upon the date the Subscription Receipts are exercised the Company will pay the Agent a commission equal to 8% of the gross proceeds from the sale of Subscription Receipts. In addition, the Agent will receive that number of Agent's Warrants as is equal to 10% of the aggregate number of Subscription Receipts sold. Each Agent's Warrant will entitle the Agent to purchase one Unit until November 26, 2012 at a price of $0.20 per Unit. The Agent also received a corporate finance fee of 200,000 Shares at closing, and a work fee of $15,000 (plus applicable taxes).

In addition to the above, the Company will pay an introduction fee to Zuri-Invest A.G. of Zurich, Switzerland, of $32,000, being 8% of the gross proceeds received by the Company in connection with one of the subscribers to the private placement, upon the date the Subscription Receipts are exercised. The Company also paid the sum of $4,000 to the Agent in consideration of the introduction to Zuri-Invest A.G.

Use of Private Placement Proceeds

The proceeds from the brokered and non-brokered private placements will be used primarily to finance exploration of the Company's Mexican Hat Property, located in Arizona, and for general working capital purposes.

ON BEHALF OF THE BOARD OF DIRECTORS,

Robin Forshaw, President

Cautionary Note: This news release contains forward-looking statements regarding the Company's intended use of proceeds from its private placement. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. There is no assurance that the Company will expend the proceeds of the private placement in the manner contemplated. Actual results may differ materially from those currently anticipated in such statements.

Contact Information

  • Auracle Resources Ltd.
    Robin Forshaw
    President
    604-682-1845