/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN./
TORONTO, April 21 /CNW/ - (TSX: SCP) - Sprott Resource Corp. ("SRC") is pleased to announce that Stonegate Agricom Ltd. ("Stonegate"), a subsidiary of SRC, has obtained a receipt for its final prospectus filed with the securities regulatory authorities in each of the provinces of Canada, other than Quebec, and has entered into an underwriting agreement for its initial public offering of 45,000,000 units (the "Units") of Stonegate at a price of $1.00 per Unit (the "Offering"). Each Unit will consist of one common share (a "Common Share") of Stonegate and one-half of one common share purchase warrant (each whole common share purchase warrant, a "Warrant").
Each Warrant will entitle the holder to acquire one common share of Stonegate at an exercise price of $1.50 for a period of three years following the closing of the Offering. The Offering will generate gross proceeds of $45,000,000. Stonegate has granted to the underwriters an over-allotment option, exercisable for a period of 30 days from the date of closing of the Offering, to cover over-allotments, if any, and for market stabilization purposes. If such option is exercised in full, gross proceeds of the Offering will be $51,750,000. Closing of the Offering is scheduled for April 28, 2010, subject to customary closing conditions.
SRC owns 63,662,000 Common Shares or approximately 73% of the issued and outstanding Common Shares (on a non-fully-diluted basis). SRC has indicated that it will purchase 12,000,000 Units under the Offering. Assuming the Offering closes and assuming SRC purchases 12,000,000 Units under the Offering, SRC will own 75,662,000 Common Shares on closing of the Offering or approximately 57% of the issued and outstanding Common Shares (on a non-fully-diluted basis).
The underwriting syndicate for the Offering is led by GMP Securities L.P. and includes BMO Capital Markets, Canaccord Financial Ltd., Wellington West Capital Markets Inc., CIBC World Markets Inc., Dahlman Rose & Company, LLC, Global Maxfin Capital Inc. and Toll Cross Securities Inc.
Stonegate has received conditional approval for the listing of the Common Shares and the Warrants, and the common shares of Stonegate issuable upon exercise of the Warrants, on the Toronto Stock Exchange ("TSX") under the symbols "ST" and "ST.WT", respectively. Listing is subject to Stonegate fulfilling all of the requirements of the TSX on or before July 7, 2010, including distribution of the Common Shares and the Warrants to a minimum number of public holders.
A copy of Stonegate's final prospectus is available on SEDAR at www.sedar.com under Stonegate's profile.
The offer and sale of the securities referred to in this press release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an exemption from the registration requirements of the U.S. Securities Act. This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities in the United States.
About Sprott Resource Corp.
SRC is a Canadian based company, the primary purpose of which is to invest, directly and indirectly, in natural resources. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting Limited Partnership ("SCLP"), of which Sprott Inc. (TSX:SII) is the sole limited partner. Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services.
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable law relating to SRC's intention to purchase Units, the scheduled closing of the Offering and the proposed TSX listing of the Common Shares and Warrants. All forward-looking statements and forward-looking information are based on reasonable assumptions, including assumptions that the closing conditions to the Offering will be met and that the TSX listing requirements in respect of the Common Shares and the Warrants will be met. These forward-looking statements and forward-looking information are subject to known and unknown risks, uncertainties and other factors that may cause results to be materially different from those expressed or implied by such forward-looking statements and forward-looking information, including but not limited to: risk that the closing conditions to the Offering are not met and that the TSX listing requirements are not met. Although SRC has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements and forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or forward-looking information. The forward-looking statements and forward-looking information contained in this press release are included for the purpose of providing investors with information to assist them in understanding the Offering. SRC does not undertake to update any forward-looking statement or forward-looking information that is included herein, except in accordance with applicable securities laws.
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