TORONTO, May 11 /CNW/ - CARPATHIAN GOLD INC. (TSX-V: CPN) (the "Company") is pleased to announce that it has entered into an agreement to issue, on a "best efforts" agency basis with Jennings Capital Inc. as lead agent and Wellington West Capital Markets Inc. as agent (collectively the "Agents"), a private placement offering (the "Offering") of 11,666,666 Units of the Company at a price of $0.60 per Unit to raise gross proceeds of $7,000,000. Each Unit comprises one common share and one-half of one transferable common share purchase warrant. Each warrant will entitle the holder, upon exercise, to acquire one common share for a period of 24 months after the closing of the Offering at a price of $0.90. The Company will pay the Agents, subject to a President's List exclusion, a cash commission equal to 7% of the gross proceeds, and will issue upon closing broker's warrants equal to 7% of the units issued under the Offering.
At the option of the Agents, prior to closing the Offering, the Offering may be increased by up to 5,000,000 units at a price of $0.60 per Unit for further gross proceeds of $3,000,000, which would increase the Offering to $10,000,000 if fully subscribed.
The securities issued in the Offering will be subject to a hold period of four months plus one day from the closing. After the expiration of the hold period the Company has the right to accelerate the expiry date of the warrants if the closing price of the Company's common shares exceeds $1.25 for a period of 20 consecutive trading days.
The financing is scheduled to close on or about May 31, 2006 and is subject to regulatory approval and completion of definitive documentation.
Proceeds from the Offering will be used to fund ongoing exploration and development activities on the Company's Rovina License in central Romania, which includes the Colnic Gold Porphyry Project and Rovina Copper Gold Porphyry Project, and for working capital purposes.