SASKATOON, SASKATCHEWAN--(Marketwire - April 5, 2012) -
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Great Western Minerals Group Ltd. ("GWMG" or the "Company") (TSX VENTURE:GWG) (OTCQX:GWMGF) today announced the closing of its previously announced offering (the "Offering") of US$80 million of secured convertible bonds (the "Bonds"). In addition, GMP Securities L.P. and ISM Capital LLP, as co-lead agents, together with Byron Capital Markets Ltd. (collectively the "Agents"), exercised an over-allotment option of US$10 million, resulting in the issuance of Bonds in the aggregate principal amount of US$90 million.
The Bonds bear interest at the rate of 8.0% per annum, are payable semi-annually, mature on April 6, 2017, and are convertible into common shares of the Company ("GWMG Shares") at a conversion rate of C$0.66 per share. The Bonds are secured obligations of the Company that have a first charge against the Company's shareholdings in its various operating subsidiaries in the United Kingdom, the United States and South Africa.
The net proceeds raised from the Offering will be used: (i) to complete a technical report on the Company's Steenkampskraal property in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects; (ii) to advance the development of the Company's Steenkampskraal development project; (iii) for the construction of the Company's monazite processing facility; (iv) for the construction of the Company's separation facility; (v) for equipment purchases and expansion of Less Common Metals Limited; and (vi) for general working capital purposes.
The Agents were paid a cash commission of US$3.6 million. The Bonds and any GWMG shares issuable upon the conversion thereof are subject to a four month hold period, under applicable Canadian securities legislation, which expires on August 6, 2012.
The TSX Venture Exchange (the "TSXV") has conditionally accepted the listing of the GWMG Shares issuable upon the conversion of the Bonds pursuant to the Offering. Listing of the GWMG Shares issuable upon the conversion of the Bonds is subject to, inter alia, the Company fulfilling the standard final requirements of the TSXV.
GWMG President and Chief Executive Officer Jim Engdahl said, "Successfully closing the US$90 million Offering is an immensely important step in the GWMG story. Even moreso, the fact that the Offering was fully subscribed, including the full exercise of the over-allotment option, speaks volumes about the interest of investors in GWMG and the confidence they have in our company being one of the most fully integrated 'first movers' in the global rare earth business."
Great Western Minerals Group Ltd. is an integrated Rare Earths processor. Its specialty alloys are used in the battery, magnet and aerospace industries. Produced at the Company's wholly owned subsidiaries Less Common Metals Limited in Birkenhead, U.K. and Great Western Technologies Inc. in Troy, Michigan, these alloys contain aluminum, nickel, cobalt and Rare Earth Elements. As part of the Company's vertical integration strategy, GWMG also holds 100% equity ownership in Rare Earth Extraction Co. Limited, which owns a 74% equity interest in the Steenkampskraal development project. In addition to an exploration program at Steenkampskraal, GWMG also holds interests in four active Rare Earth exploration and development properties in North America.
The securities described in this press release have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. This press release is for information purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Certain information set out in this News Release constitutes forward-looking information. Forward-looking statements (often, but not always, identified by the use of words such as "expect", "may", "could", "anticipate" or "will" and similar expressions) may describe expectations, opinions or guidance that are not statements of fact and which may be based upon information provided by third parties. Forward-looking statements are based upon the opinions, expectations and estimates of management of GWMG as at the date the statements are made and are subject to a variety of known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Those factors include, but are not limited to, the construction, commissioning and operation of the proposed monazite processing facility and separation facility, mine refurbishment activities, reliance on third parties to meet projected timelines, the results of the exploration program at Steenkampskraal, completion of a resource estimate and commencement of production at Steenkampskraal, risks related to the receipt of all required approvals including those relating to the commencement of production at the Steenkampskraal mine, delays in obtaining permits, licenses and operating authorities in South Africa,environmental matters, water and land use risks, risks associated with the industry in general, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans, risks associated with the uncertainty of reserve or resource estimates, health and safety risks, uncertainty of estimates and projections of production, costs and expenses, risks that future Steenkampskraal and region exploration results may not meet exploration or corporate objectives, the availability of additional financing on reasonable terms or at all, political risks inherent in South Africa, risks associated with the relationship between GWMG and/or its subsidiaries and communities and governments in South Africa, radioactivity and related issues, dependence on one mineral project, loss of key personnel, the factors discussed in the Company's public disclosure record, and other factors that could cause actions, events or results not to be as anticipated.
In light of the risks and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although GWMG believes that the expectations reflected in the forward-looking statements set out in this press release or incorporated herein by reference are reasonable, it can give no assurance that such expectations will prove to have been correct. Except as required by law, GWMG does not assume any obligation to update forward looking statements as set out in this news release. The forward-looking statements of GWMG contained in this News Release, or incorporated herein by reference, are expressly qualified, in their entirety, by this cautionary statement and the risk factors contained in GWMG's current annual information form available at www.sedar.com
CUSIP: 39141Y 10 3