Geomega Resources Inc.

TSX VENTURE : GMA


Geomega Resources Inc.

December 03, 2013 17:29 ET

Geomega Resources Inc.: Second Tranche Closing of a Private Placement

MONTREAL, QUEBEC--(Marketwired - Dec. 3, 2013) - Geomega Resources Inc. ("GéoMégA" or the "Company") (TSX VENTURE:GMA) announces, pursuant to its news release dated November 5, 2013, a second tranche closing (the "Second Tranche") of a private placement consisting of 328,000 units (the "Units") at a subscription price of $0.16 per Unit and 3,123,500 flow-through units ("Flow-Through Units") at a subscription price of $0.17 per Flow-Through Unit for gross proceeds of $583,475 with an Institutional Fund, accredited investors and a director.

The proceeds from the placement will be used to fund exploration on the Montviel project and working capital purposes.

Each Unit consists of one common share (a "Common Share") and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each whole Unit Warrant entitles the holder thereof to acquire one additional common share at a price of $0.21 per share for a period of 36 months from December 3, 2013 (the "closing date"). Each Flow-Through Unit consists of one common share and one-half of one common share purchase warrant (each whole warrant, a "Flow-Through Unit Warrant"). Each whole Flow-Through Unit Warrant entitles the holder thereof to acquire one additional common share at a price of $0.25 per share for a period of 12 months from the closing date.

In connection with the flow-through portion of the private placement, the Company paid a finder's fees of $41,208 and has issued 242,400 non-transferable warrants. Each warrant entitles the finder to purchase one common share at a price of $0.17 per share for a period of 18 months from the closing date.

The Common Shares and the Warrants acquired by the subscribers are subject to a hold period of four months plus one day expiring on April 4, 2014 except as permitted by applicable securities legislation and the rules of TSX Venture Exchange.

One director of the Company subscribed to an aggregate of 15,500 Units and 73,500 Flow-Through Units distributed pursuant to the private placement (the "Insider's Participation"). The Insider's Participation is exempt from the formal valuation and shareholder approval requirements provided under Regulation 61-101 respecting Protection of Minority Holders in Special Transactions ("Regulation 61-101") in accordance with sections 5.5(a) and 5.7(a) of said Regulation 61-101. The exemption is based on the fact that the market value of the Insider's Participation or the consideration paid by such insider does not exceed 25% of the market value of the Company. The Company did not file a material change report at least 21 days prior to the completion of the private placement since the Insider's Participation was not determined at that moment.

Preliminary economic assessment of the Montviel Rare Earths Elements/Niobium deposit

The Montviel project benefits from permanent access, public infrastructure and available labour in the immediate area. The mine design uses an underground approach via ramp access with paste backfill minimizing the environmental impacts. An initial annual production in the range of 2,000 tonnes of neodymium oxides is targeted. Anticipated project energy would be provided by the Hydro-Québec distribution grid using an average power line. A preliminary economic assessment produced by G Mining Services Inc. is expected during the Company's third fiscal quarter of 2014.

About GéoMégA (www.geomega.ca)

GéoMégA, which owns 100% of the Montviel rare earth elements/niobium project located in Québec, is a mineral exploration and development company focused on the discovery and sustainable development of economic deposits of metals, such as rare earth elements, niobium and graphite, in Québec. GéoMégA is committed to meeting Canadian mining industry standards and distinguishing itself with its innovative engineering, stakeholders engagement and its dedication to local transformation benefits.

GéoMégA currently has 42,825,238 common shares issued and outstanding.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautions Regarding Forward-Looking Statements

This news release contains forward-looking statements regarding our intentions and plans. The forward-looking statements that are contained in this news release are based on various assumptions and estimates by the Company and involve a number of risks and uncertainties. As a consequence, actual results may differ materially from results forecast or suggested in these forward-looking statements and readers should not place undue reliance on forward-looking statements. We caution you that such forward-looking statements involve known and unknown risks and uncertainties, as discussed in the Company's filings with Canadian securities agencies. Various factors may prevent or delay our plans, including but not limited to, contractor availability and performance, weather, access, mineral prices, success and failure of the exploration and development carried out at various stages of the program, and general business, economic, competitive, political and social conditions. The Company expressly disclaims any obligation to update any forward- looking statements, except as required by applicable securities laws.

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