Choice Resources Corp.

Choice Resources Corp.

April 04, 2006 07:57 ET

Choice Announces a Bought Deal Private Placement Financing

CALGARY, ALBERTA--(CCNMatthews - April 4, 2006) - Choice Resources Corp. ("Choice" or the "Corporation")(TSX VENTURE:CZE) announces that it has entered into a bought-deal financing agreement with Research Capital Corporation to raise $8.0 million through a private placement offering of 4,210,526 units at $0.95 per unit and 3,636,364 "flow-through" common shares at $1.10 per share. Each unit consists of one common share and one-half of one warrant to purchase an additional common share at a price of $1.35 per share for a period of 12 months. The size of the unit offering can be increased by up to 25% at the option of Research Capital and the size of the flow-through share offering can be increased by up to 25% at the option of the Corporation. Choice currently has outstanding 58,606,222 common shares, as well as warrants and options entitling the holders to acquire an aggregate of up to a further 8,409,812 common shares. Closing of the placement is scheduled for April 25, 2006.

Proceeds from the private placement will be used to fund the continued exploration and development of the Corporation's oil and natural gas properties.

Research Capital will receive a cash fee equal to 7.0% of the gross proceeds from the unit offering and 6% of the gross proceeds from the flow-through share offering, as well as brokers' warrants, exercisable for a period of 12 months, to purchase a number of common shares equal to 7% of the units issued under the private placement at a price of $0.95 per share.

In addition, the Corporation proposes to separately offer and issue on or before April 28, 2006, by private placement at the same prices, up to an additional 10% of the units and the flow-through shares issued at closing of the Research Capital private placement. Some or all of these securities may be sold to insiders and employees.

All shares and warrants issued through the private placements are subject to a hold period of four months from the applicable closing date.

Completion of the private placements is subject to certain conditions, including satisfactory due diligence by Research Capital and receipt of all necessary regulatory approvals.

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

Contact Information

  • Choice Resources Corp.
    Gordon Harris
    President and Chief Executive Officer
    (403) 216-5821
    Choice Resources Corp.
    Steve Austin
    Chief Financial Officer
    (403) 216-5821
    (403) 216-5828 (FAX)