Breakwater Resources Ltd.

Breakwater Resources Ltd.

April 03, 2009 16:02 ET

Breakwater Resources Ltd. Announces Entering Into Underwriting Agreement for $20 Million Unit Offering

TORONTO, ONTARIO--(Marketwire - April 3, 2009) -


Breakwater Resources Ltd. (the "Company") (TSX:BWR) announces that it has entered into an underwriting agreement for a $20 million public offering of units with a syndicate of underwriters co-led by Cormark Securities Inc. and Dundee Securities Corporation and including GMP Securities L.P., Scotia Capital Inc., TD Securities Inc., Canaccord Capital Corporation, Octagon Capital Corporation and Toll Cross Securities Inc.

As previously announced, the offering will be for 200 million units (the "Units") offered at a price of $0.10 per Unit, with each Unit being comprised of one common share and one-half of a warrant (a "Warrant"). Each whole Warrant will have a term of five years and entitle the holder to purchase one common share at a price of $0.12 per share.

In connection with entering into the underwriting agreement, the Company filed a final short form prospectus with the Ontario Securities Commission and the securities regulatory authority in each of the other provinces of Canada.

The offer and sale of the Units is subject to obtaining all required approvals and the satisfaction of all terms and conditions of the underwriting agreement. The offering is expected to close on or about April 9, 2009.

The Company has granted to the underwriters an over-allotment option, exercisable in whole or in part at the discretion of the underwriters for a period of 30 days from the closing date to purchase up to 30,000,000 additional Units at a price of $0.10 for each additional Unit on the same terms and conditions of the offering or, alternatively, up to 15,000,000 additional Warrants at a price of $0.02 per additional Warrant (or a combination of additional Units and additional Warrants that, in the aggregate, will not be comprised of more than 30,000,000 common shares and 15,000,000 Warrants), in whole or in part to cover over-allotments, if any, and for market stabilization purposes.

Dundee Corporation has advised us of its intention to purchase a number of units at closing of the offering equal to 25.2% of the total number of Units that may be issued under the offering (calculated on the basis of the Units to be issued at closing plus the underwriters' over allocation position at closing) to maintain its approximate 25.2% equity interest in the Company.

Further details of the offering, including the anticipated use of proceeds, are set out in the prospectus of the Company dated April 3, 2009 available on or from one of the members of the underwriting syndicate.

The Units will be offered by way of a short form prospectus in all provinces of Canada and in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended and internationally pursuant to available exemptions.

Forward-Looking Statements

This press release contains forward-looking statements regarding the proposed offering and the use of proceeds. The words "expected", "intends", "will" and similar words and expressions identify the forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results or developments to differ materially from those expressed by the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: our financial condition and operations, market metal prices, current global financial conditions, and regulatory approvals. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at the date of such statements, are inherently subject to significant business, economic, social, political and competitive uncertainties and contingencies. The material factors and assumptions that were applied in making the forward-looking statements in this press release include but are not limited to: the offering being completed on the terms of the underwriting agreement and being able to obtain all necessary regulatory approvals and the offering being completed. For additional information with respect to risks, uncertainties and assumptions, please also refer to the "Risk Factors" in the short form prospectus dated April 3, 2009 filed on SEDAR at under the Company's profile. These forward-looking statements are made as of the date of this press release only and the Company does not assume any obligation to update or revise them to reflect new information, estimates or opinions, future events or results or otherwise, except as required by applicable law.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

Breakwater is a mining, exploration and development company which produces and sells zinc, copper, lead and gold concentrates to customers around the world. The Company's concentrate production is derived from three mines in Chile, Honduras and Canada. Breakwater's Langlois mine in Quebec, Canada is currently on temporary care and maintenance.

Contact Information

  • Breakwater Resources Ltd.
    Ann Wilkinson
    Vice President, Investor Relations
    (416) 363-4798 Ext. 277