Not for distribution to United States newswire services or for dissemination in the United States
TORONTO, Canada – Aura Gold Inc. (the “Company” or “Aura Gold”) (TSX:ORA) is pleased to announce that it has entered into an agreement with a syndicate led by Canaccord Capital Corporation (the “Underwriters”), which have agreed to purchase, on an underwritten private placement basis, 87,500,000 subscription receipts (the “Subscription Receipts”) at a price of Cdn$0.80 per Subscription Receipt for aggregate gross proceeds of Cdn$70,000,000 (the “Base Offering”).
Each Subscription Receipt shall be deemed to be exchanged, without payment of any additional consideration and subject to adjustment, for one (1) common share of the Company (each an “Underlying Share”) on the earlier to occur of: (i) the Escrow Release Time (as defined below); and (ii) the Final Escrow Deadline (as defined below), in respect of the Subscription Receipts which remain outstanding after giving effect to the return of the Escrowed Funds (as herein defined) provided for below.
The Company also has agreed to grant to the Underwriters an option (the “Underwriters’ Option”) to purchase up to an additional 37,500,000 Subscription Receipts, at the issue price per Subscription Receipt and on the same terms and conditions as under the Base Offering, exercisable any time, in whole or in part, up to 48 hours prior to the Closing Date (as defined below) (together with the Base Offering, the “Offering”). If the Underwriters’ Option is exercised in full, the total additional gross proceeds to the Company will be Cdn$100,000,000.
Aura Gold plans to use the net proceeds of the Offering to advance the Arapiraca Project located in Brazil, for the exploration and development of the Company’s mineral projects, including the Arapiraca Project, and for general corporate working capital purposes. The acquisition of the Arapiraca Project by the Company (the “Acquisition”) is described in more detail in the press release of the Company dated April 3, 2007.
Upon the closing of the Offering, 25% of the gross proceeds of the Offering shall be delivered to the Company, with the remaining 75% (the “Escrow Ratio”) of the gross proceeds of the Offering to be deposited in escrow (the “Escrowed Funds”).
The Escrowed Funds will be released from escrow to the Company (after deducting the applicable Underwriters’ commission) contemporaneously with the closing of the Acquisition (the “Escrow Release Time”), provided that the following conditions (the “Escrow Release Conditions”) have been satisfied before the Escrow Release Time:
a) all conditions precedent to the closing of the Acquisition shall have been satisfied or waived to the satisfaction of the Underwriter, acting reasonably; and
b) to the extent required in accordance with the rules of the Toronto Stock Exchange (the “TSX”), the Acquisition and the issuance of the Underlying Shares pursuant to the Offering, shall have been approved by the shareholders of the Company.
In the event that either (i) the Escrow Release Conditions are not satisfied by the Escrow Release Time, or (ii) the closing of the Acquisition does not occur on before 115 days after the Closing Date (the “Final Escrow Deadline”), the Escrowed Funds, plus any accrued interest earned thereon, shall be returned pro rata to each holder of the Subscription Receipts in exchange for that number of Subscription Receipts held by such holder multiplied by the Escrow Ratio.
The Subscription Receipts will be offered in each of the provinces of Canada, offshore jurisdictions, and in the United States on a private placement basis pursuant to an exemption from the requirements of the United States Securities Act of 1933, as amended. Subject to restrictions in respect of sales from control blocks, the Subscription Receipts and the Underlying Shares will be subject to a four month hold period in Canada.
The Offering is scheduled to close on or about May 1, 2007 (the “Closing Date”) and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX.
This news release is intended for distribution in Canada only and is not intended for distribution to United States newswire services or dissemination in the United States. The securities being offered have not, nor will they be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.
About Aura Gold Inc.
Aura Gold Inc. (TSX:ORA) is a Canadian exploration company focused on the acquisition and development of mineral deposits in Brazil and South America. Aura Gold’s current projects are the Cumaru, the Inaja Greenstone Belt and the North Carajas Claims, which total approximately 600,000 hectares in the Carajas Metallogenic Province of north central Brazil. The planned acquisition and development of the Arapiraca gold/copper/iron ore project is part of an ongoing strategy to build Aura Gold into a mid-tier producer in the near term.
For further information, please visit the Aura Gold web site at www.auragoldinc.com or contact:
President & CEO
Vice President, Corporate Development
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This news release includes certain “forwardlooking statements”. All statements other than statements of historical fact included in this release, including without limitation, statements regarding potential mineralization and reserves, exploration results, future plans and objectives of Aura Gold, 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. Important factors that could cause actual results to differ materially from Aura Gold’s expectations are the risks detailed herein and from time to time in the filings made by Aura Gold with securities regulators.