Solvista Gold Corporation

Solvista Gold Corporation

May 09, 2011 15:13 ET

Solvista Announces Non-Brokered Private Placement

TORONTO, ONTARIO--(Marketwire - May 9, 2011) -

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

Solvista Gold Corporation ("Solvista") is pleased to announce a non-brokered private placement (the "Financing") to raise gross proceeds of CDN$2,735,297 through the issuance of 3,647,063 units (each, a "Unit") at a price of CDN$0.75 per Unit. Each Unit will consist of one common share and one half of one common share purchase warrant (each whole such warrant, a "Warrant"). Each Warrant will entitle the holder to acquire an additional common share at a price of CDN$1.10 for a period of 24 months following the date of issuance of the Warrants.

The Financing is expected to be completed prior to the commencement of trading of the common shares of Solvista on the TSX Venture Exchange (the "TSX-V") and, updating its press release dated April 27, 2011, Solvista expects its common shares to commence trading on the TSX-V upon completion of the Financing, which is expected to be completed prior to May 13, 2011. Solvista will disclose the date that the shares will commence trading when such date is determined.

Kinross Gold Corporation (TSX:K)(NYSE:KGC) ("Kinross") has agreed to purchase all 3,647,063 Units, which shall represent approximately 9.9% of Solvista's issued and outstanding share capital on a partially diluted basis. Solvista has also agreed to grant Kinross the right to maintain its percentage ownership during future financings for a period of two years following completion of the Financing.

The board of directors of Solvista is very pleased that Kinross is providing a vote of confidence in Solvista's management team, exploration properties and approach, by making such an investment in Solvista, and looks forward to adding a supportive, long-term shareholder committed to gold exploration in Colombia. The board is also pleased to begin a relationship with Kinross and its sophisticated exploration and operating teams.

Solvista's President and CEO Michael Johnson commented "We are very happy to have attracted the interest of a company such as Kinross at this early stage of Solvista's development and look forward to a long and mutually beneficial relationship with Kinross as we develop our Caramanta and Guadalupe projects."

It is intended that the proceeds raised pursuant to the Financing will be used by Solvista for the exploration of the Caramanta property and the Guadalupe property and for general working capital. All securities issued pursuant to the Financing will be subject to a four-month hold period from the date of closing. The Financing remains subject to the approval of the TSX-V.

Update to Certain Disclosure in Information Circular

The following section is intended to update certain disclosure set out in the joint information circular of Alpha One Corporation and Solvista Gold Corporation dated March 22, 2011 (the "Circular"), which disclosed the terms and effects of the amalgamation transaction involving Alpha One Corporation and Solvista Gold Corporation that was effected on April 27, 2011 (the "Amalgamation"), in order to include the addition of the Financing.

Pro-forma Capitalization

Designation of Security
Amount Authorized
or to be
Authorized
Amount Outstanding as
at April 29, 2011
After Giving Effect to the
Solvista Gold Corporation
Amalgamation (1)
Amount Outstanding
Upon Completion of
the Financing
Solvista SharesUnlimited49,787,93453,434,997
Solvista WarrantsN/A9,999,99011,823,521
Solvista Stock OptionsN/A2,959,9983,322,998(2)
Solvista Compensation OptionsN/A1,192,2321,192,232
Notes:
(1)The amalgamation involving Alpha One Corporation and Solvista Gold Corporation (as described in the Circular) was effected on April 27, 2011, as disclosed in Solvista's press release dated such date.
(2)This figure includes 363,000 stock options granted as disclosed below in this press release.

Fully Diluted Share Capital

In addition to the information set out in the Pro-forma Capitalization table above, the following table sets out the fully diluted share capital of Solvista immediately following completion of Financing:

Number of
Solvista
Shares
Percentage
of Total
Outstanding
Solvista shares issued to shareholders of Alpha One Corporation in connection with the Amalgamation1,599,9912.3%
Solvista shares issued to holders of shares of pre-amalgamation Solvista Gold Corporation in connection with the Amalgamation28,000,00040.1%
Solvista shares issued to holders of Solvista subscription receipts(1)20,000,00028.7%
Solvista shares issued to certain finders as part of their compensation with respect to the subscription receipt financing(1)187,9430.3%
Shares reserved by Solvista for issue pursuant to outstanding warrants and compensation options issued pursuant to the subscription receipt financing (1)(2)11,192,22216.0%
Shares reserved by Solvista for issue pursuant to stock options under Solvista's stock option plan3,322,998(3)4.8%
Solvista shares issuable pursuant to the Financing3,647,0635.2%
Shares issuable by Solvista pursuant to warrants issuable pursuant to the Financing1,823,5312.6%
TOTAL69,773,748100%
Notes:
(1)Concurrently with the Amalgamation, Solvista completed a subscription receipt financing (the "Subscription Receipt Financing") as disclosed in the Circular and Solvista's press release dated April 27, 2011.
(2)This figure includes shares reserved for issue pursuant to 9,999,990 warrants issued as a part of the Subscription Receipt Financing, 1,192,232 compensation options issued in connection with the Subscription Receipt Financing, and 1,823,531 warrants issuable pursuant to the Financing.
(3)This figure includes 363,000 stock options granted as disclosed below in this press release.

Principal Purposes of Funds

The following budgeted amounts are estimates of the principal purposes to which the estimated working capital of Solvista will be applied:

Principal PurposeBudgeted
Amount
(US$)
Exploration budget (for the 24 month period subsequent to completion of the Amalgamation) (includes both phases of the recommended program on the Caramanta property):1,457,500
Exploration budget (for the 24 month period subsequent to completion of the Amalgamation) (includes both phases of the recommended program of on the Guadalupe property):1,435,000
Administrative expenses (for the 24 month period subsequent to completion of the Amalgamation):1,000,000
Management fees (for the 24 month period subsequent to completion of the Amalgamation):1,400,000
Estimated legal and accounting fees (for the 24 month period subsequent to completion of the Amalgamation):300,000
Estimated fees associated with the Amalgamation:1,113,952
Related party payable owed to Norvista in respect of advances made to Solvista and its subsidiaries (1)346,540
Unallocated working capital (for the 24 month period subsequent to completion of the Amalgamation):10,222,714 (2)
TotalUS$17,275,706
Notes:
(1)Norvista funded additional costs and expenses of the Solvista and Solvista Colombia during the year ended December 31, 2010. These additional advances are repayable to Norvista by Solvista. The advances from Norvista are non-interest bearing and unsecured and will be repaid by Solvista upon completion the Amalgamation.
(2)This figure includes US$2,828,934 raised pursuant to the Financing which was converted from CDN$2,735,297 using the noon rate of exchange as reported by the Bank of Canada on May 5, 2011 for conversion of United States dollars into Canadian dollars ($US1.00 = CDN$0.9669).

Option Grant

Solvista also announces the grant today of an aggregate of 363,000 stock options to certain directors, at an exercise price of CDN$0.75 per share for a period of five years.

About Solvista

Solvista is an early-stage exploration company with two gold projects covering approximately 75,000 hectares in the Antioquia province of Colombia. Solvista is well funded and led by a management team with over 45 years of exploration and mining experience, principally in South and Central America. Solvista's head office is located in Toronto with its Colombian headquarters located in Medellín. For further details on Solvista, its management team and its projects, please refer to Solvista's web site (www.solvistagold.com). Solvista's Canadian regulatory filings can be found on SEDAR at www.sedar.com.

CAUTIONARY STATEMENT: This news release contains forward-looking information which is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, Solvista's objectives, goals or future plans, the timing and the of completion of the Financing, the receipt of TSX-V approval in respect of the Financing, the timing of the commencement of trading of Solvista's shares on the TSX-V, statements regarding the estimation of mineral resources, exploration results, potential mineralization, exploration and mine development plans, timing of the commencement of operations and estimates of market conditions. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, failure to convert estimated mineral resources to reserves, capital and operating costs varying significantly from estimates, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and the other risks involved in the mineral exploration and development industry, and those risks set out in Solvista's public documents filed on SEDAR. Although Solvista believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Solvista disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

Contact Information

  • Solvista Gold Corporation
    Donald Christie
    Chief Financial Officer and Corporate Secretary
    +1 416 504 4171
    dchristie@solvistagold.com