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GBG - Great Basin Gold - Great Basin Gold Announces C$110 Million Bought Deal
Public Offering Of Convertible Debentures
GREAT BASIN GOLD LIMITED
(Incorporated in Canada and registered as an External Company in South Africa)
(Registration No. 2006/021304/10)
Share Code: GBG ISIN Number: CA3901241057
("Great Basin Gold" or "the Company")
Not for distribution to U.S. news wire services or dissemination in the United
States
GREAT BASIN GOLD ANNOUNCES C$110 MILLION BOUGHT DEAL PUBLIC OFFERING OF
CONVERTIBLE DEBENTURES
October 29, 2009, Vancouver, BC - Great Basin Gold Ltd. ("Great Basin Gold" or
the "Company"), (TSX: GBG; NYSE Amex: GBG; JSE: GBG) announces that it has
entered into an agreement with a syndicate of underwriters led by RBC Capital
Markets and including, BMO Capital Markets, Raymond James Ltd. and Thomas
Weisel Partners Canada Inc., pursuant to which the underwriters will purchase
C$110 million principal amount of senior unsecured convertible debentures (the
"Debentures") at a price of C$1,000 per Debenture (the "Offering"), by way of
a short form prospectus. The Company has granted the underwriters an over-
allotment option to purchase up to an additional 15% of the Offering, for a
period of 30 days following the closing.
Net proceeds from the Offering will be used for repayment of amounts drawn
down on the Company`s project finance facility, development of the Company`s
Burnstone project (replacing the proposed Burnstone project finance facility)
and general corporate purposes.
The Debentures will mature on November 30, 2014 and will accrue interest at
the rate of 8.0% per annum payable on a semi-annual basis. At the holder`s
option, the Debentures may be converted into common shares of Great Basin Gold
at any time up to the maturity date. The conversion price will be C$2.15 for
each common share, representing a premium of approximately 25% to the closing
price on October 29, 2009, subject to adjustment in certain circumstances.
The Debentures will be senior unsecured obligations of Great Basin Gold, will
rank pari passu with all other existing and future senior unsecured
indebtedness of the Company, and will be effectively subordinated to all
existing and any future secured debt of Great Basin Gold to the extent of the
assets securing such debt. The Debentures will be guaranteed, on a senior
unsecured basis, by each subsidiary through which Great Basin Gold holds title
to the Burnstone project.
The Debentures will not be redeemable before November 30, 2012. From November
30, 2012 through to the maturity date, Great Basin Gold may, at its option,
redeem the Debentures, in whole or in part, at par plus accrued and unpaid
interest provided that the weighted average trading price of the common shares
on the Toronto Stock Exchange for the 20 consecutive trading days ending five
trading days prior to the date on which notice of redemption is provided is at
least 135% of the conversion price.
Great Basin Gold will repay the outstanding principal amount of the
Debentures, on maturity or redemption, in cash.
The Offering is scheduled to close on or about November 17, 2009 and is
subject to certain conditions including, but not limited to, the receipt of
all necessary approvals including the approval of the Toronto Stock Exchange.
Under the terms of the agreement, the Company is required to file a
preliminary short-form prospectus and obtain a receipt from the securities
regulatory authorities in all provinces of Canada by November 4, 2009. The
securities offered have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the
United States absent registration or an applicable exemption from the
registrations requirements of such Act. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy the
securities in any jurisdiction in which such offer, sale or solicitation would
be unlawful.
Ferdi Dippenaar, President and CEO, commented:
"We have been reviewing funding alternatives given the long timeline and
restrictions that project debt facilities require. Due to the extended time
it has taken to finalise the facility, as well as the costs and constraints,
including high upfront equity contribution and complex associated hedging
structures, the Company has been evaluating alternative funding options. The
sale of convertible debentures is the preferred option with fewer encumbrances
on Great Basin Gold`s balance sheet, no requirements to hedge gold production
and, on a relative basis, comes at a lower cost of capital in a rising gold
price environment. As we are making good progress with the delivery of the
project, we are pleased that we could complete this convertible debenture
offering on an equally timely basis."
Copies of the preliminary prospectus may be obtained from RBC Capital Markets,
Attention: Distribution Centre, 277 Front St. W., 5th Floor, Toronto, Ontario
M5H 2X4 (tel: 416-842-5349).
For additional details on Great Basin Gold and its gold properties, please
visit the Company`s website at www.grtbasin.com or contact Investor Services:
Tsholo Serunye in South Africa 27 (0) 11 301 1800
Michael Curlook in North America 1 (888) 633 9332
Barbara Cano at Breakstone Group in the USA (646) 452 2334
No regulatory authority has approved or disapproved the information contained
in this news release.
Cautionary and Forward Looking Statement Information
This release includes certain statements that may be deemed "forward-looking
statements". All statements in this release, other than statements of
historical facts, that address financing events or technical developments that
Great Basin Gold expects to occur are forward-looking statements. Although the
Company believes the expectations expressed in such forward-looking statements
are based on reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ materially
from those in the forward-looking statements. Factors that could cause actual
results to differ materially from those in forward-looking statements include
financial market conditions, metals prices, exploitation and exploration
successes, continuity of mineralization, uncertainties related to the ability
to obtain necessary permits, licenses and title and delays due to third party
opposition, geopolitical uncertainty, changes in government policies regarding
mining and natural resource exploration and exploitation, continued
availability of capital and financing, and general economic, market or
business conditions. Investors are cautioned that any such statements are not
guarantees of future performance and actual results or developments may
differ materially from those projected in the forward-looking statements. For
more information on the Company, Investors should review the Company`s annual
Form 40-F filing with the United States Securities and Exchange Commission and
its home jurisdiction filings that are available at www.sedar.com.
Date: 30/10/2009 09:25:01 Supplied by www.sharenet.co.za
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