Farallon Resources Ltd.

Farallon Resources Ltd.

November 21, 2006 08:26 ET

Farallon Announces Public Offering in Canada

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 21, 2006) -


Farallon Resources Ltd. ("Farallon" or the "Company") (TSX:FAN) announces that it has filed a preliminary short form prospectus with the securities regulatory authorities in certain of the provinces of Canada in connection with a public equity offering (the "Offering"), which is expected to raise gross proceeds of up to approximately C$55 million. Proceeds are to be used to advance work on the G-9 deposit at the Company's Campo Morado project in Mexico, and for working capital purposes. Paradigm Capital Inc. will be lead agent of a syndicate, which includes Canaccord Capital Corporation and MGI Securities Inc. (collectively, the "Agents").

The Offering will consist of Subscription Receipts of Farallon with a targeted price of $0.50 per Subscription Receipt, as determined within the context of recent market prices. Each Subscription Receipt will entitle the holder to acquire, for no additional consideration, one common share and one-half of one common share purchase warrant of Farallon (each whole such warrant a "Warrant"). Each Warrant shall entitle the holder to acquire an additional common share of Farallon for a period of 24 months for an exercise price at a targeted price of $0.70.

In addition, the Agents have been granted an Over Allotment Option for up to 15% of the number of Subscription Receipts sold pursuant to the Offering exercisable at any time prior to 5:00 p.m. PST on the 30th day following closing of the Offering, which is expected to be on or around December 15, 2006.

Upon completion of the offering, it is expected that up to C$15 million of the gross proceeds plus one-half of the Agents' commission and all of the Agents' expenses shall be released to the Company and the Agents, respectively. The balance of such gross proceeds will be held in escrow pending satisfaction of certain release conditions (the "Release Conditions"), including principally the signing of definitive agreements for revolving credit for variable credit requirements and working capital, and a non revolving component for equipment purchases and project work. The proceeds not subject to escrow will be used for long lead time capital items required for the work program at Campo Morado.

If the Release Conditions are satisfied within 90 days from completion of the offering, the Subscription Receipts will automatically convert into common shares and Warrants and the escrowed portion of the offering funds will be released to the Company. If the Release Conditions are not met, each holder of Subscription Receipts shall receive a refund of such Subscription Receipts equal to that amount of the escrowed funds attributable to such holder's subscription. Unrefunded Subscription Receipts will be exchanged for common shares and Warrants of the Company. The common shares and shares issuable on exercise of the Warrants will not be subject to resale restrictions in Canada.

The prospectus and the offering of subscription receipts are subject to regulatory approvals including the Toronto Stock Exchange. The securities being offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States in the absence of registration or an applicable exemption from the registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to purchase securities in the United States.

Farallon Resources Ltd. is an international exploration and development company, listed on the Toronto Stock Exchange.

Dick Whittington, President and CEO

Forward-Looking Information

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future financings, production, reserve potential, exploration drilling, exploitation activities and events or developments that the company expects are forward-looking statements. Although the company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, and continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements.

No regulatory authority has either approved or disapproved of the contents of the news release.

Contact Information

  • Farallon Resources Ltd.
    Shawn Wallace
    Investor Relations
    (604) 684-6365 or Toll Free: 1-800-667-2114
    (604) 684-8092 (FAX)
    Website: www.farallonresources.com