By Devika Patel
Knoxville, Tenn., Oct. 15 - KFG Resources Ltd. announced that it has raised C$1.8055 million in the first tranche of a previously announced private placement of units. The C$2 million deal priced on Sept. 7.
In the first trance, the company sold 18,055,000 units. As previously reported, it intends to sell a total of 20,000,000 units at C$0.10 apiece. Each unit consists of one common share and one warrant. Each whole warrant is exercisable at C$0.20 for two years.
There is a greenshoe for up to 5,000,000 units, or C$500,000, which must be exercised within five business days after closing and closed within ten business days after closing.
Union Securities Ltd. is the agent. KFG paid Union a work fee of C$10,000 plus expenses for the first tranche and an 8% commission. Union also received options to purchase up to 1,805,500 units at C$0.10 per unit for two years. The agent's units have the same terms as the units sold in the placement.
The company expects the second and final tranche of the deal to close in late October.
Proceeds will be used for exploration and development of the company's property in Mississippi and for general working capital purposes.
KFG, through its wholly owned subsidiary KFG Petroleum Corp., drills for and produces crude oil and natural gas in Mississippi, Kansas and Texas. It is based in Natchez, Miss.
| Issuer: | KFG Resources Ltd.
|
| Issue: | Units of one share and one warrant
|
| Amount: | C$2 million
|
| Greenshoe: | 5,000,000 units for C$500,000
|
| Units: | 20,000,000
|
| Price: | C$0.10
|
| Warrants: | One warrant per unit
|
| Warrant expiration: | Two years
|
| Warrant strike price: | C$0.20
|
| Placement agent: | Union Securities Ltd.
|
| Pricing date: | Sept. 7
|
| Stock symbol: | TSX Venture: KFG
|
| Stock price: | C$0.12 at close on Sept. 7
|
|
|
| First tranche
|
| Amount: | C$1.8055 million
|
| Units: | 18,055,000
|
| Fees: | 8%; C$10,000; options to buy 1,805,500 units
|
| Settlement date: | Oct. 11
|
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