Cornerstone Capital Resources Inc.

Cornerstone Capital Resources Inc.

July 07, 2005 16:15 ET

Cornerstone Private Placement Completed

MOUNT PEARL, NEWFOUNDLAND--(CCNMatthews - July 7, 2005) - Cornerstone Capital Resources Inc. (TSX VENTURE:CGP) confirms completion of the $738,000 private placement announced June 15, 2005. The company is pleased to announce that the offering was fully subscribed, including the $150,000 over-allotment provided for in the agreement with Leede Financial Markets Inc., for total proceeds of $888,000.

Under the financing, 680,000 flow-through units and 2,166,667 non-flow-through units were sold. Each flow-through unit was priced at $0.35 per unit and comprised one flow-through common share and one-half share purchase warrant. Each non-flow-through unit was priced at $0.30 per unit and comprised one non-flow-through common share and one whole share purchase warrant. Each whole warrant entitles the holder to acquire one additional common share at a price of $0.40 per share for a period of one year after closing of the offering, and thereafter at $0.50 per share for one additional year. The Company will have the right to accelerate the expiry date of the warrants to thirty (30) days from the date of the exercise of such acceleration right by providing holders of the warrants with written notice of such reduction in the exercise period. The right to accelerate will be triggered in the event that the closing price of the Company's common shares is $0.60 or more per share over a period of twenty (20) consecutive trading days during the first twelve months after the closing of the offering, or $0.75 or more per share over a period of twenty (20) consecutive trading days during the second twelve months.

As agent, Leede Financial is receiving a commission of 8% of the gross amount raised, paid from the proceeds of the offering. As additional consideration, Leede Financial was granted non-transferable options (the "Agent's Compensation Options") entitling Leede Financial to purchase 355,833 units, representing 12.5% of the number of units sold under the offering. The Agent's Compensation Options may be exercised at the offering price for a period of 12 months from closing of the offering.

All shares issued pursuant to the placement will bear a legend restricting transfer until November 6, 2005.

Participants in the private placement comprise non-Canadian investors (49.2%) plus funds and accredited investors in British Columbia and Ontario. Cornerstone wishes to welcome the new shareholders and to express appreciation to all shareholders for their continued trust and confidence.

The proceeds of the issuance will be used to advance existing properties and to provide working capital to the Corporation.

On Behalf of the Board of Directors

Glen H. McKay, President

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

Contact Information

  • Cornerstone Capital Resources Inc.
    Glen H. McKay
    (709) 745-8377 or Toll Free: 1-877-277-8377
    Cornerstone Capital Resources Inc.
    109 Clyde Avenue
    Mount Pearl, NL A1N 4R9
    (709) 745-8377 or Toll Free: 1-877-277-8377