VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 07/05/10 -- Premium Exploration Inc. (TSX VENTURE: PEM) ("Premium" or the "Company") is pleased to announce the completion of a brokered private placement and the merger of its subsidiary with Clearwater Mining Corporation ("Clearwater").
Del Steiner, President commented, "I am pleased that the agents have been committed to the financing during the complex merger with Clearwater and we look forward to using the funds efficiently while advancing our gold projects through the ongoing drilling."
Effective as of July 2, 2010, Premium fulfilled its escrow closing conditions for the completion of its $10 million brokered private placement (the "Private Placement") and on July 5th, 2010 it closed the first tranche of its Private Placement with the issuance of 32,000,000 Units at a price of $0.25 per Unit for gross total proceeds of $8,000,000.
Premium expects that the second tranche of 8,000,000 Units at a price of $0.25 per Unit for gross proceeds of $2,000,000 will close on or about July 6th, 2010 after the holiday in the United States and the Company will issue a follow-up press release to confirm once that second tranche has closed. Each Unit consists of one common share and one-half of a common share purchase warrant, each whole warrant entitling the holder to acquire an additional common share at a price of $0.35 per share for an eighteen month period following closing. The placement was led by Industrial Alliance Securities Inc., in a syndicate which included Dundee Securities Corporation and Byron Securities Limited. The placement was previously announced on April 19, 2010 and amended June 9, 2010.
The funds raised include a 7% cash commission payable upon closing and 7% broker's warrants (issuable upon closing). Each broker's warrant allow the holder thereof to purchase a Unit at an exercise price of $0.25 per Unit, exercisable for a period of 18 months after the closing date. Each such Unit has the same terms and conditions as those offered under the private placement and is also each comprised of one common share and one-half of a common share purchase warrant, with each whole warrant entitling the holder to acquire an additional common share at a price of $0.35 per share for an eighteen month period following closing. The securities issued are subject to a four-month hold period from the date of issuance and to final acceptance from the TSX Venture Exchange (the "Exchange"). The Exchange has confirmed its final acceptance in respect of the Private Placement in its bulletin dated July 2, 2010.
Proceeds from the private placement will be used for ongoing exploration and development of the Company's projects, including the on-going Phase-Three drill program on the Friday/Petsite project, and for general working capital.
Concurrent with the Private Placement and effective as of July 2, 2010, Premium USA, a wholly owned subsidiary of Premium Exploration Inc., has taken over Clearwater via a Plan of Merger. Clearwater is the 100% owner of three advanced gold projects: Buffalo Gulch, Friday-Petsite, Deadwood and one exploration stage project, Dixie Project, all located on the Orogrande Shear Zone in central Idaho. Additional information about these properties is disclosed in the Company's technical report dated January 22, 2008 and revised May 27, 2010, which was filed on SEDAR and is available at www.sedar.com.
In exchange for agreeing to merge Clearwater into Premium USA, the shareholders of Clearwater received an aggregate total of 3,000,000 common shares of the Company (subject to a 4-month hold period) along with a 1% Net Smelter Returns royalty ("NSR") on the Friday-Petsite Project as well as 60 ounces of gold from initial production (the "Transaction"). The NSR is payable quarterly on commencement of commercial production of gold from the Friday-Petsite Project up to a total of US$3,000,000 in royalty payments. Since the completion of the Transaction, Premium USA continues as the sole surviving corporation of the merger.
As a condition of the approval for the merger, the Company has signed an undertaking to provide an updated independent Technical Report in compliance with National Instrument 43-101 and the policies of the Exchange, within two months after the Exchange issues its final acceptance of the Transaction.
About Premium Exploration Inc.
Premium Exploration Inc. (TSX VENTURE: PEM) explores and develops North American gold, silver, Platinum and Palladium. Our team is committed to unlocking mineral wealth for our shareholders by discovering, developing, and permitting precious metals assets to production. The Company's portfolio includes one of the largest land packages in Idaho which includes an NI 43-101 gold resource, as well as a PGM exploration project in Montana. For additional information, please visit us at www.premiumexploration.com.
This press release contains certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Security Exchange Act of 1934, and involves a number of risks and uncertainties. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time with the TSX Venture Exchange and the British Columbia Securities Commission. All statements, other than of historical fact, included herein are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements.
Neither the 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.
Contacts:
Premium Exploration Inc.
Mr. Del Steiner
President
(604) 682-0243
(604) 682-2499 (FAX)
dsteiner@premiumexploration.com
www.premiumexploration.com
Opes Capital Inc
Ms. Christine Kopr
Corporate Communications
(604) 682-0243
(604) 682-2499 (FAX)
ckopr@opescapitalinc.com
www.opescapitalinc.com