Kootenay announces strategic investment by Agnico-Eagle Mines Limited
Vancouver, British Columbia: Kootenay Silver Inc. has announced that Agnico-Eagle Mines Limited has entered into a subscription agreement to make an investment of $4,750,000 in Kootenay through a non-brokered private placement of units. As a result of the transaction, Agnico-Eagle will own 9.96 per cent of Kootenay's issued and outstanding shares on a non-diluted basis.
Under the terms of the subscription agreement, Agnico-Eagle will purchase a total of 6,250,000 units at a price of $0.76 per unit. Each unit is comprised of one common share and one-half of one common share purchase warrant. Each whole share purchase warrant will entitle Agnico-Eagle to acquire one common share of the company at a price of $1.08 for a period of two years from the date of issuance. In the event that all warrants are exercised, an additional $3,375,000 will be raised.
James McDonald, president and CEO of Kootenay said, "We are very pleased that Agnico-Eagle has committed to become a strategic investor in Kootenay Silver. Agnico's investment provides us with a substantial alternative source of capital to the open market from a recognized world leader in precious metals mining, development and exploration. Agnico's commitment to exploration and mining in Mexico directly coincides with our own commitment to the exploration and development of Promontorio. This investment recognizes the quality and near-term potential of our flagship Promontorio Silver project and our other principal exploration targets in Sonora, Mexico."
Sean Boyd, president and CEO of Agnico-Eagle said, "We are pleased to be involved with the advancement of Promontorio, a project that will continue to benefit from Kootenay's capable exploration team. This investment is also consistent with our desire to increase our presence in Sonora State."
The company intends to use the net proceeds of the offering for the advancement of the Promontorio Silver project and general working capital.
The closing of the private placement is expected to occur on or about April 26, 2013 and is subject to all necessary regulatory approvals. The common shares issuable pursuant to the offering (including the common shares issuable upon the exercise of the warrants) are subject to a four-month hold period. Upon closing of the private placement, subject to certain conditions, Agnico-Eagle will have the right to participate in any future equity offerings by the Company in order to maintain its pro rata investment in the Company.
The securities being offered have not been, nor will they be registered under the United States Securities Act of 1933, as amended, or state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. federal and state registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.
About Kootenay
Kootenay Silver Inc. is actively developing mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada. Its flagship property is the former producing Promontorio Silver mine in Sonora State, Mexico. Kootenay's objective is to develop near term discoveries and long-term sustainable growth. Its management and technical team are proven professionals with extensive international experience in all aspects of mineral exploration, operations and venture capital markets. Multiple, ongoing J/V partnerships in Mexico and Canada maximize potential for additional, new discoveries while maintaining minimal share dilution.
