By Devika Patel
Knoxville, Tenn., Oct. 13 - American Sierra Gold Corp. arranged a $10 million line of credit with Tobermory Holding Ltd. on Oct. 12, according to an 8-K filed Tuesday with the Securities and Exchange Commission. Tobermory may increase the amount to $12 million.
Tobermory has committed to purchase up to $6 million of the company's units until Dec. 31, 2011. The advances may be drawn in increments of up to $1 million. Each unit consists of one common share and one warrant. They will be sold at 75% of the volume weighted average price of the company's stock for the 10 business days preceding each advance notice.
The two-year warrants are exercisable at 175% of the unit price.
Proceeds will be used for operating expenses, acquisitions, working capital and general corporate activities.
The gold explorer is based in Reno, Nev.
Issuer: | American Sierra Gold Corp.
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Issue: | Equity line of credit
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Amount: | $10 million
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Tenor: | Dec. 31, 2011
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Price: | 75% of volume weighted average price for the 10 business days preceding each advance notice
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Warrants: | One per unit
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Warrant expiration: | Two years
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Warrant strike price: | 175% of unit price
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Investor: | Tobermory Holding Ltd.
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Pricing date: | Oct. 12
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Stock symbol: | OTCBB: AMNP
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Stock price: | $1.13 at close Oct. 9
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Market capitalization: | $103 million
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