St Andrew Goldfields Ltd.
TSX : SAS

St Andrew Goldfields Ltd.

July 07, 2010 16:00 ET

SAS Announces $20 Million Private Placement to Advance its Exploration Program and Offers to Repurchase its Senior Secured Gold Notes

TORONTO, ONTARIO--(Marketwire - July 7, 2010) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

St Andrew Goldfields Ltd. (TSX:SAS), ("SAS" or the "Company") is pleased to announce that it intends to complete a $20 million brokered private placement (the "Offering") consisting of 6,666,667 flow through units (the "FT Units") at a price of $1.50 per FT Unit and 8,000,000 common share units (the "Units") at a price of $1.25 per Unit. Each FT Unit will consist of one flow-through common share and one-half of one common share purchase warrant and each Unit will consist of one common share and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one additional common share of SAS at a price of $1.70 per share for a period of 18 months from the date of closing of the Offering. The Company has also provided an over-allotment option of $2 million for each of the FT Units and the Units. The Offering will be placed by a syndicate of investment dealers, led by NCP Northland Capital Partners Inc. (formerly Sandfire Securities Inc.) and will include Stonecap Securities Inc., D&D Securities Inc., and Octagon Capital Corporation. Closing of the Offering is anticipated to occur on or about July 28, 2010.

Proceeds from the Offering will be used to accelerate the Company's surface exploration programs in the Timmins Mining Camp, to advance the underground exploration development at the Holloway Mine's Smoke Deep Zone and for general working capital purposes.

Repurchase of Senior Secured Gold Notes

The Company is offering to repurchase its Senior Secured Gold Notes ("Notes") by issuing non flow-through Units on the same terms as to be issued on the Offering (the "Repurchase Offer"). For each US$100,000 face amount of the US$16.2 million of Notes issued, the Company is offering to the note holders 119,413 Units at a price of $1.25 per Unit. This transaction is also expected to close on or about July 28, 2010. Holders of a majority of the Notes have expressed interest in the Repurchase Offer. Assuming the Notes are repurchased in full, the Company will be required to issue 19,344,957 Units for a value of approximately $24.2 million. 

The securities to be issued pursuant to the Offering and the Repurchase Offer will be subject to a four-month hold period. Completion of the Offering and the Repurchase Offer are subject to the approval of the Toronto Stock Exchange. 

"We have been very pleased with the success of our recent exploration programs, and the positive results justify an increased level of effort," said Jacques Perron, President & CEO of SAS. "The timing is right for this influx of funds in order to advance our exploration activities in the Timmins camp. The repurchase of the Senior Gold Notes is in line with our efforts to strengthen our balance sheet, and receive the full benefit of our gold production revenue."

About SAS

SAS (operating as "SAS Goldmines"), is a gold mining and exploration company with an extensive land package in the Timmins mining district, northeastern Ontario, which lies within the Abitibi greenstone belt, the most important host of historical gold production in Canada. SAS is focussed on developing its assets in the Timmins Camp which includes current and near-term gold production, and exploration activities.

FORWARD-LOOKING INFORMATION

This news release contains forward-looking information and forward-looking statements (collectively, "forward-looking information") under applicable securities laws, concerning the Company's business, operations, condition and prospects, as well as management's objectives, strategies, beliefs and intentions. Forward-looking information is frequently identified by such words as "may", "will", "plan", "expect", "estimate", "anticipate", "believe", "intend" and similar words referring to future events and results, including with respect to the Company's intent to complete the Offering, the timing thereof and the use of proceeds therefrom and its intent to complete the repurchase of the senior secured gold notes and the timing thereof. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, changes in general economic conditions or conditions in the financial markets, fluctuations in gold prices and currency exchange rates, uncertainties relating to the interpretation of the geology, continuity, grade and size estimates of its mineral reserves and resources and unanticipated operational or technical difficulties . Such forward looking information is based on a number of assumptions, including but not limited to, the availability of financing, no significant decline in existing general business and economic conditions, the level and volatility of the gold price, the accuracy of our reserve and resource estimates and of the geological, metallurgical, price and other assumptions on which the estimates are based and receipt of the approval of the Toronto Stock Exchange. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking information and accordingly, readers are cautioned not to place undue reliance on this forward-looking information. SAS does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.

Contact Information

  • St Andrew Goldfields Ltd.
    Suzette N Ramcharan
    Manager, Investor Relations
    1-800-463-5139 or (416) 815-9855
    (416) 815-9437 (FAX)
    sramcharan@sasgoldmines.com
    or
    St Andrew Goldfields Ltd.
    Jacques Perron
    President & CEO
    1-800-463-5139 or (416) 815-9855
    (416) 815-9437 (FAX)
    jperron@sasgoldmines.com
    or
    St Andrew Goldfields Ltd.
    Ben Au
    CFO, VP Finance & Administration
    1-800-463-5139 or (416) 815-9855
    (416) 815-9437 (FAX)
    bau@sasgoldmines.com
    www.sasgoldmines.com