Santa Fe Metals Corp. Announces Further Terms of Proposed Transactions
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 5, 2012) - Santa Fe Metals Corp. (the "Company") (TSX VENTURE:SFM) is pleased to announce further details regarding the proposed $400,000 private placement it previously announced by news release dated October 29, 2012 (the " Initial Financing"). The Company now expects that the Initial Financing will involve the issuance of 16,000,000 units of the Company (the "Financing Units") at a price of $0.025 per Financing Unit, on a pre-Share Consolidation (as defined below) basis, which is expected to represent a price of $0.50 per Financing Unit, on a post-Share Consolidation basis. Each Financing Unit will be comprised of one common share of the Company on a post-Consolidation basis (the "Post-Consolidation Shares") and one-half of one common share purchase warrant (each such whole warrant, a "Financing Warrant"). Each Financing Warrant will entitle the holder thererof to purchase one Post-Consolidation Share at a price of $0.70 for a period of two years following the issue date of the Financing Warrant. The Company will have the right to shorten the exercise period of the Financing Warrants to 20 days in the event that the closing price of the Post-Consolidation Shares on the TSX Venture Exchange (the "Exchange") exceeds $1.00 for a 20 trading day period.
The Initial Financing will take the form of an issuance of subscription receipts (the "Financing Subscription Receipts"), which will be converted into Financing Units only after the Share Consolidation is completed. The Company anticipates that the issuance of the Financing Units on conversion of the Financing Subscription Receipts will be qualified by a prospectus. The Financing Subscription Receipts will be subject to a 4-month hold period under applicable securities laws.
The Company intends to use the net proceeds of the Initial Financing to fund expenses in relation to its previously announced proposed acquisition of 100% of the shares of La Muriel Mining Corporation from Gold Plata Mining International Corporation ("Gold Plata") (announced by news release dated October 29, 2012) (the "Proposed Transaction") and for general corporate purposes.
As announced by the Company in a news release dated October 29, 2012, the Company intends to complete a share consolidation of its outstanding common shares on a 20:1 basis (the "Share Consolidation"). The Share Consolidation will require the approval of at least 66 2/3% of the Company's shareholders at a meeting of the shareholders.
The Company also announces that it intends to pay a finder's fee (the "Finder's Fee") to Xystus Holdings Corporation Ltd. in connection with the Proposed Transaction. The Finder's Fee will be equal to 4% of the total consideration (including cash consideration) to be paid by the Company to Gold Plata under the terms of the Proposed Transaction and will be satisfied by the issuance of common shares and warrants of the Company on the same terms as those issued to Gold Plata.
The Company also announces revisions to the terms of the shares-for-debt settlement (the "Debt Settlement") it previously announced by news release dated October 30, 2012. Under the revised terms, the Company intends to settle outstanding loans with several individuals totalling approximately $243,859 (the "Loans"). The Loans will be satisfied by the issuance by the Company of of subscription receipts which will be convertible into units of the Company (the "Debt Settlement Units") after the Share Consolidation is complete at a deemed issue price of $0.025 per Debt Settlement Unit, on a pre-Share Consolidation basis, which is expected to represent a price of $0.50 per Debt Settlement Unit on a post-Share Consolidation basis. Each Debt Settlement Unit will be comprised of one Post-Consolidation Share and one-half of one common share purchase warrant (each such whole warrant, a "Debt Settlement Warrant"). The terms of the Debt Settlement Units and Debt Settlement Warrants will be substantially similar to those of the Financing Units and the Financing Warrants, respectively.
The Debt Settlement is not expected to result in a new Control Person (as such term is defined in the Policies of the Exchange) of the Company. Of the $243,859 of the Loans, an aggregate of $80,159 is owed to Ian Smith (the CEO and a Director of the Company) and $73,700 is owed to Stuart Angus (the Chairman of the Board of Directors of the Company).
This news release contains forward-looking statements, including statements relating to the Company's future plans and objectives with respect to the Initial Financing, Share Consolidation, Finder's Fee and Debt Settlement. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in resource exploration and development. There can be no assurance that the Initial Financing, Share Consolidation, Finder's Fee or Debt Settlement will be completed as proposed or at all.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transactions and has neither approved nor disapproved the contents of this news release.
SANTA FE METALS CORP.
IAN SMITH, President & CEO
FOR FURTHER INFORMATION PLEASE CONTACT:
Santa Fe Metals Corp.
President & CEO
604.678.8823 ext. 1