Balloch Resources Ltd.
TSX VENTURE : BAH

October 19, 2005 17:08 ET

Balloch Resources Announces Closing of $17.5 Million Private Placement Financing

TORONTO, ONTARIO--(CCNMatthews - Oct. 19, 2005) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES

Balloch Resources Ltd. (TSX VENTURE:BAH) is pleased to announce today that it completed the previously announced private placement of 14 million subscription receipts of the Company, at a price of $1.25 per subscription receipt for gross proceeds of $17.5 million. Each subscription receipt will entitle the holder to receive one common share of the Company without payment of any additional consideration, subject to adjustment in certain events. GMP Securities Ltd. and Quest Securities Corporation, as co-lead agents, together with a syndicate that included Haywood Securities Inc, acted as agents on a best efforts basis in connection with the private placement.

The gross proceeds of the offering less the agents' estimated out-of-pocket expenses will be held in escrow and will be released to Balloch upon satisfaction of certain escrow release conditions. If the escrow release conditions are not satisfied prior to December 31, 2005, the escrowed proceeds will be used by Balloch, together with other funds on hand, to repurchase the subscription receipts.

Balloch has paid the agents a commission equal to 6.0% of the gross proceeds of the offering. In addition, Balloch has issued to the agents compensation warrants to purchase in aggregate 560,000 common shares of Balloch. The compensation warrants will be exercisable for 12 months following the closing of the offering at an exercise price of $1.45 per share.

The net proceeds of the offering will be used to fund the completion of a feasibility study in respect of the Kamoto joint venture assets and to fund the purchase of the 23.33% ownership interest in KFL from Kinross Gold Corporation pursuant to an agreement with Kinross entered into on September 2, 2005.

Balloch is a mineral exploration company with a 10% net profits interest in the El Molino mining concession owned by Lumina Copper Corp. The El Molino project lies contiguous to Lumina's El Galeno mining concessions in the Yanacocha district in Peru.

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. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.



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

Contact Information

  • Balloch Resources Ltd.
    Thomas Pladsen
    President and CEO
    (647) 287-3778