Morgain Minerals Inc.
TSX VENTURE : MGM

Morgain Minerals Inc.

December 07, 2006 08:30 ET

Morgain Announces Closing of Brokered Private Placement and Negotiation of a Non-Brokered Private Placement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 7, 2006) - Morgain Minerals Inc. (the "Company") (TSX VENTURE:MGM) announces that on December 4, 2006 it issued 2,325,000 units of the Company (the "Units") at a purchase price of CDN$0.30 per Unit, raising gross proceeds to the Company of CDN$697,500 pursuant to its previously announced brokered private placement. Canaccord Capital Corporation acted as the agent for this offering.

Each Unit consists of one common share of the Company and one common share purchase warrant (a "Warrant"). Each Warrant entitles the holder to acquire, at any time within two years from the closing of the offering, one common share of the Company at a purchase price of CDN$0.50 per share.

Proceeds from the private placement will be applied primarily to advance the Company's Castillo Gold Project in Mexico and will be used for working capital purposes.

In consideration for its services, the Agent received a cash commission equal to 8% of the gross proceeds of the offering (CDN$55,800), and agent's warrants exercisable into that number of units equal to 15% of the number of units sold pursuant to the offering (348,750 agent's warrants in total). Each Agent's Warrant entitles the holder at any time during the period of two years following the closing of the offering to acquire one common share at a purchase price of CDN$0.50 per share. The Agent also received an administration fee of $10,000 and 100,000 units in payment of a corporate finance fee, such units having the same terms as the units offered in the private placement.

All securities issued under the private placement are subject to a four-month hold period under applicable Canadian securities laws expiring on April 5, 2007.

Non-Brokered Private Placement

The Company also wishes to announce a non-brokered private placement of up to 2,000,000 units of the Company (the "Non-Brokered Units") at a purchase price of CDN$0.30 per Non-Brokered Unit, for total gross proceeds of up to CDN$600,000 (the "Non-Brokered Offering"). Each Non-Brokered Unit will consist of one common share and one common share purchase warrant (a "Non-Brokered Warrant"). Each Non-Brokered Warrant entitles the holder to purchase one additional common share at a purchase price of CDN$0.50 for a period of two years from the closing. The financing is subject to regulatory acceptance.

Morgain has agreed to pay a finder's fee and other compensation in connection with the Non-Brokered Offering, subject to the approval of the TSX Venture Exchange.

Use of Proceeds

The proceeds from the Non-Brokered Offering, which is subject to regulatory acceptance, will be used to advance the Company's Castillo Gold Project in Mexico, for a 43-101 compliant mineral resource estimate for the Company's La Fortuna Gold Project in Mexico and for working capital purposes.

About Morgain Minerals Inc.

Morgain Minerals Inc. is a resource exploration company with a number of precious and base metal properties in Mexico. Its corporate strategy is to acquire properties with known resources that can be further developed to production status. Visit Morgain's website www.morgainminerals.com for the latest corporate information.

The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.

Contact Information

  • Morgain Minerals Inc.
    Richard Adams
    Director and VP Corporate Development
    (905) 466-8008
    (604) 643-1726 (FAX)
    Email: morgain@telus.net
    Website: www.morgainminerals.com
    or
    Coal Harbor Communications Inc.
    Dale Paruk
    (604) 662-4505 or Toll-free 1-877-642-6200