Shear Minerals Ltd. has successfully closed its marketed private placement equity offering (the “Offering”) and the completion of its purchase of the Jericho diamond mine and related assets in Nunavut (the “Jericho Acquisition”).
The Offering
Under the Offering, 139,451,000 conventional units (“Conventional Units”), each consisting of one common share (a “Common Share”) and one Common Share purchase warrant (a “Conventional Unit Warrant”), and 62,300,350 flow-through units (“Flow-Through Units”), each consisting of one flow-through Common Share (a “Flow-Through Share”) and one-half of one Common Share purchase warrant (each whole warrant, a “Flow-Through Unit Warrant”) were issued. The gross proceeds of the Offering were $13,113,838. The Conventional Units and Flow-Through Units were priced at $0.065 each.
Each Conventional Unit Warrant entitles the holder thereof to acquire one additional Common Share at a price of $0.075 for a period of 48 months following the date of issuance. Each Flow-Through Unit Warrant entitles the holder thereof to acquire one additional Common Share at a price of $0.080 for a period of 24 months following the date of issuance.
The agents (“Agents”) for the Offering included RBC Capital Markets, which acted as lead agent, and Macquarie Capital Canada Ltd.
The Agents’ compensation in respect of the Offering was comprised of a 6% cash commission and broker warrants entitling the Agents to purchase up to an aggregate of 12,105,081 Common Shares (being 6% of the aggregate number of Conventional Units and Flow-Through Units issued under the Offering) and which are exercisable for four years at an exercise price of $0.075 per share.
In accordance with applicable securities laws, there will be a four (4) month hold from the date of issuance on the securities comprising the Conventional Units and the Flow-Through Units.
The Jericho Acquisition
Concurrently with the completion of the Offering, Shear Minerals completed its previously announced acquisition of the Jericho diamond mine and related assets in Nunavut. As consideration for the Jericho Acquisition, Shear Minerals issued an aggregate of 80,000,000 Common Shares, made a payment of $1,500,000 and issued a promissory note for $500,000 payable on the first anniversary of the date of closing of the Jericho Acquisition.
As previously announced, as a result of the significant increase in its issued and outstanding share capital which has resulted from the completion of the Jericho Acquisition and the Offering, it is intended that at the next annual meeting of its shareholders Shear Minerals will propose a consolidation of its then issued and outstanding Common Shares. While the specific consolidation ratio to be proposed will be determined in due course, the ratio is not expected to exceed 10:1. The meeting is expected to be held on or about November 29, 2010, and with the record date in respect of the meeting expected to be on or about October 25, 2010.
About Shear Minerals Ltd.
Shear Minerals is a Canadian-based exploration company focused on diamond exploration in the Canadian North, where it explores established diamond districts and has discovered new ones. In addition to the Jericho diamond project it has now acquired through the Jericho Acquisition, Shear Minerals has a portfolio of eight other diamond projects, seven of which are drill-ready. Shear Minerals has advanced its 62.3% ownership of Churchill Diamond Project into an expanding diamond district hosting 88 kimberlites in the Kivalliq region of Nunavut.
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