By Devika Patel
Knoxville, Tenn., Nov. 5 - Keegan Resources Inc. said it has entered into a letter of engagement with Dundee Securities Corp. and a syndicate of underwriters, including Cormark Securities Inc., for a C$12.3 million private placement of units.
Keegan will sell 3 million units at C$4.10 apiece on a bought-deal basis. Each unit comprises one common share and one half-share warrant. Each whole transferable warrant is exercisable at C$5.25 for 18 months.
The warrants may expire sooner if the company's shares trade at C$6.00 or higher for 20 consecutive trading days. In that case, the warrants will expire 30 days after Keegan notifies holders.
The underwriters have an over-allotment option to purchase an additional 300,000 units for C$1.23 million. They will receive a 5% cash commission plus broker warrants equal to 10% of the number of units sold. The broker warrants will be exercisable at C$4.25 for18 months.
The units will have a four-month hold period.
Closing is expected on or around Nov. 27.
Proceeds will be used to drill and advance the company's Esaase and Asumura gold properties in Ghana.
Keegan is a Vancouver, B.C.-based gold exploration and development company.
| Issuer: | Keegan Resources Inc.
|
| Issue: | Units of one share and one half-share transferable warrant
|
| Amount: | C$12.3 million
|
| Units: | 3 million
|
| Greenshoe: | 300,000 units, or C$1.23 million.
|
| Price: | C$4.10
|
| Warrants: | One half-share warrant per unit
|
| Warrant expiration: | 18 months
|
| Warrant strike price: | C$5.25
|
| Underwriters: | Dundee Securities Corp., Cormark Securities Inc.
|
| Fees: | 5% in cash, 10% in broker warrants
|
| Pricing date: | Nov. 5
|
| Settlement date: | Nov. 27
|
| Stock symbol: | TSX Venture: KGN
|
| Stock price: | C$4.25 at close Nov. 2
|
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