Mega Precious Metals Inc.
TSX VENTURE : MGP

February 29, 2012 16:02 ET

Mega Announces $15 Million Private Placement Financing

THUNDER BAY, ONTARIO--(Marketwire - Feb. 29, 2012) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Mega Precious Metals Inc. (TSX VENTURE:MGP) ("Mega") is pleased to announce that it has entered into an agreement with Jennings Capital Inc., as lead agent on behalf of a syndicate of agents including Fraser Mackenzie Limited and PowerOne Capital Markets Limited (collectively, the "Agents"), in connection with a best efforts private placement offering of up to 8,196,722 units ("Units") of Mega at a price of $0.61 per Unit and up to 12,965,340 flow-through units ("Flow-Through Units") of Mega at an average price of $0.77 per Flow-Through Unit for aggregate gross proceeds of up to $15 million (the "Offering"). Each Unit will be comprised of one common share and one-half of one common share purchase warrant of Mega, and each Flow- Through Unit will be comprised of one common share that is a "flow-through share" within the meaning in the Income Tax Act (Canada) and one-half of one common share purchase warrant of Mega. Each whole common share purchase warrant will be exercisable to purchase one common share of Mega for a period of 24 months from the date of closing of the Offering at a price of $0.85. The Corporation has granted to the Agents an option to increase the size of the Offering by up to an additional 1,229,508 Units and 1,944,801 Flow-Through Units at the respective offering prices, exercisable in whole or in part, for a period of up to 48 hours prior to the closing of the Offering. The Units and Flow-Through Units will be offered by way of private placement exemptions from prospectus requirements.

As consideration for the services of the Agents in connection with the Offering, the Agents will receive a commission equal to 7% of the aggregate gross proceeds of the Offering and compensation warrants, exercisable at any time for a period of 24 months following the closing of the Offering, to purchase common shares of Mega for an amount equal to 7% of the total number of Units and Flow Through Units issued pursuant to the Offering, at an exercise price equal to the offering price for the Units (being $0.61 per common share).

The net proceeds from the sale of Units are expected to be used to fund Mega's exploration and development activities, and for general corporate and working capital purposes. The proceeds from the sale of Flow-Through Units are expected to be used by Mega to incur Canadian Exploration Expenses (as defined in the Income Tax Act (Canada)) ("Qualifying Expenditures") on the continued exploration of Mega's mineral properties prior to December 31, 2013. Mega will specifically budget $8 million for Qualifying Expenditures for its Monument Bay project in Manitoba and $2 million for Qualifying Expenditures for its projects in Ontario. Mega will renounce the Qualifying Expenditures to subscribers of the Flow-Through Units effective on or prior to December 31, 2012.

The Offering is expected to close on or about March 22, 2011 and is subject to certain conditions typical for a transaction of this nature and the receipt of all necessary regulatory approvals including the approval of the TSX Venture Exchange.

Mega Precious Metals Inc. is a Canadian-based mineral exploration company with several projects in Northwestern Ontario, Manitoba and Nunavut. The Company is committed to an accelerated growth strategy and is backed by a team of experienced mining experts. Mega is poised for rapid expansion through quick response to new opportunities and changes in the market. Mega's common shares trade on the TSX Venture Exchange under the symbol MGP.

Forward-looking Information

This news release includes certain information that may constitute "forward-looking information" under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about the expected closing of the Offering, the use of proceeds from the Offering and the other terms of the Offering, strategic plans, spending commitments, future operations, future work programs and objectives. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information, including the fact that regulatory approvals required in connection with the Offering will not be received, or that the other conditions of closing of the Offering will not be met, and the risks identified in Mega's annual information form under the heading "Risk Factors". There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. Mega disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

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

Contact Information

  • Mega Precious Metals Inc.
    Jim Rogers
    President & Chief Executive Officer
    807-766-3380
    TF: 877-592-3380
    info@megapmi.com