Pan Terra Industries Inc.
TSX VENTURE : PNT

Pan Terra Industries Inc.

February 08, 2012 16:05 ET

Pan Terra Industries Announces Up to $10,000,000 Subscription Receipts Offering

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 8, 2012) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES

Pan Terra Industries Inc. ("Pan Terra" or the "Company") (TSX VENTURE:PNT) is pleased to announce that it has engaged Dundee Securities Ltd. ("Dundee" or the "Agent") to act as agent on a reasonable commercial efforts basis in connection with a private placement of up to 20,000,000 non-transferable subscription receipts (the "Subscription Receipts") at a price of $0.50 per Subscription Receipt (the "Offering Price"), for gross proceeds of up to $10,000,000 (the "Offering"). Each Subscription Receipt, upon exercise, will entitle the holder thereof to acquire one unit of the Company (each, a "Unit"), each Unit being comprised of one common share of the Company (a "Share") and one half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will be exercisable for a period of 36 months from the closing date of the Offering (the "Closing Date") for one common share of the Company (a "Warrant Share") at an exercise price of $0.75 per Warrant Share. The Company has also granted to Dundee an agent's option exercisable in whole or in part, to offer for sale up to an additional 4,000,000 Subscription Receipts at the Offering Price.

The Company intends to use the net proceeds of the Offering to fund the cash component of the consideration payable by Pan Terra for its previously announced acquisition (the "Kombat Transaction") of 80% of the issued and outstanding shares of Manila Investments (PTY) Ltd. ("Manila"), and for general corporate purposes. Manila's principal asset is its agreement with Grove Mining Namibia (Proprietary) Limited and others in respect of the proposed acquisition of the Kombat Mine and related assets, including all mining surface infrastructure and equipment, prospecting licenses, and intellectual property related thereto. For further details on the Kombat Transaction see the Company's news release dated December 28, 2011.

Each Subscription Receipt issued in connection with the Offering will be deemed to be exercised, without payment of any additional consideration and without further action on the part of the holder thereof, for one Unit on the Escrow Release Date (as defined below) following satisfaction or waiver of the escrow release conditions (the "Escrow Release Conditions"), which will include, among other things, (i) satisfaction or waiver of all conditions to the completion of the Kombat Transaction (other than payment of the purchase price therefor), and (ii) the Company's receipt of the necessary regulatory and other material approvals in connection with the Kombat Transaction, including certain Namibian regulatory approvals (the "Namibian Regulatory Approvals"). The gross proceeds of the Offering, less Dundee's costs and expenses payable by the Company on the Closing Date, will be held in escrow by an escrow agent (the "Escrow Agent") until such date (the "Escrow Release Date") which is two business days following the delivery of a joint notice by the Company and Dundee to the Escrow Agent confirming that the Escrow Release Conditions have been satisfied. Subject to extension (if applicable) if the Escrow Release Conditions are not satisfied prior to 5:00 p.m. (Toronto time) on May 31, 2012 (the "Escrow Deadline"), the Escrow Agent will return to each holder of Subscription Receipts the aggregate Offering Price paid by that holder together with accrued interest earned thereon less any applicable withholding tax. Subject to certain conditions and abridgement, the Company may extend the Escrow Deadline for an initial period of two months, if any or all of the Escrow Release Conditions cannot be satisfied or waived before the Escrow Deadline solely because the Namibia Regulatory Approvals are not received before the Escrow Deadline. Following the initial period of extension, the Escrow Deadline may be extended for a further two months, subject to abridgement and the same conditions as the initial extension, with the prior written consent of Dundee.

As compensation for acting as agent under the Offering, Dundee will receive a cash commission (the "Agency Fee") equal to 7% of the gross proceeds from the Offering, to be paid on the Escrow Release Date, and compensation options (the "Compensation Options") entitling Dundee to acquire that number of common shares of the Company equal to 7% of the aggregate number of Subscription Receipts sold pursuant to the Offering, exercisable for a period of 24 months from the date of issue thereof at an exercise price of $0.50 per share. The Compensation Options will not be exercisable until the earlier of (i) four months and one day after the Closing Date, and (ii) the Escrow Release Date.

All securities issued in connection with the Offering will be issued under exemptions from the prospectus requirement and will be subject to a statutory hold period of four months and a day from the date of issuance.

The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, which include, but are not limited to, the approval of the TSX Venture Exchange.

The Subscription Receipts and the underlying securities 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 unless registered under the Act or unless an exemption from registration is available.

ON BEHALF OF THE BOARD OF DIRECTORS

PAN TERRA INDUSTRIES INC.

Alexander Helmel, President

The TSXV has in no way passed upon the merits of the proposed Kombat Transaction or the Offering and has neither approved nor disapproved the contents of this press release.

This news release contains forward-looking statements regarding the future success of the business of the Company that is subject to risk and uncertainties. Examples of such forward- looking statements including, but are not limited to, statements concerning the Company's acquisition of the interest in the Manila, the Company's intended use of the proceeds from the Offering and the Company's intention to raise additional capital and financing. These forward-looking statements involve known and unknown risk and uncertainties that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in these forward-looking statements. These risks include risks related to dependence on key personnel, competition, risks related to newly acquired businesses, uncertainty and dilution of additional financing and ability to service debt, as well as the risk factors described in the Company's Management Discussion and Analysis filed on SEDAR at www.sedar.com, and the risks to be described in any Management Information Circular. The forward-looking statements contained herein are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions or circumstances on which any such forward-looking statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

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

Contact Information

  • Pan Terra Industries Inc.
    Alexander Helmel
    (604) 495-8792

    Pan Terra Industries Inc.
    Suite 830 - 1100 Melville Street
    Vancouver, British Columbia V6E 4A6