Company to use funds to repurchase debt
By Stephanie N. Rotondo
Portland, Ore., Oct. 13 - Vista Gold Corp.'s president and chief operating officer offered new details about the company's recently increased private placement of special warrants.
The deal originally priced Sept. 30 for $30 million and was increased to $33.76 million on Oct. 12.
Vista will sell approximately 14.68 million of the warrants at $2.30 each, with each five-year warrant exercisable at $3.50 in the first year, $4.00 in the second year, $4.50 in the third year and $5.00 thereafter.
The price per warrant reflects a 10.51% discount to the Sept. 29 closing share price of $2.57. The warrants' strike price represents premiums of 36.19%, 55.64%, 75.1% and 94.55%, respectively, to the Sept. 29 closing share price.
The increase in the size of the deal was "entirely related to demand," Frederick H. Earnest said in an interview with Prospect News. The private placement is "way oversubscribed."
Earnest noted that investors had previously been clamoring for Vista Gold securities about a year ago, when the company did a public offering. That transaction also garnered "excessive demand," resulting in a 10% increase.
The funds will be used to repurchase $23 million of 10% convertible notes, which come due March 4, 2011. The funds will be placed in escrow until shareholder and regulator approval is secured.
The remaining funds will be used "for the advancement of our Mount Todd project," earnest said, as the company readies to start a feasibility study. Some of the cash might also be used for the Concordia project, which is in the permitting process.
Earnest said Vista Gold has "no immediate plans for a follow-on financing" but added that the company might come back to the market once all permits for the Concordia project have been approved. He estimated the permits would be acquired by the end of the first quarter.
Vista Gold is a Denver-based gold exploration company.
| Issuer: | Vista Gold Corp.
|
| Issue: | Special warrants convertible into units of one common share and one warrant
|
| Amount: | $33,756,602
|
| Special warrants: | 14,676,740
|
| Price: | $2.30
|
| Warrants: | One warrant per unit upon conversion
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $3.50 in first year, $4.00 in second year, $4.50 in third year and $5.00 thereafter
|
| Agent: | Sprott Private Wealth LP and Wellington West Capital Markets Inc.
|
| Pricing date: | Sept. 30
|
| Upsized: | Oct. 12
|
| Stock symbol: | NYSE Amex: VGZ
|
| Stock price: | $2.75 at close Oct. 12
|
| Market capitalization: | $133.88 million
|
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