Gensource Potash closes $3-million private placement

Gensource Potash (TSXV:GSP) has completed its previously announced non-brokered private placement financing. The offering consisted of the sale of 27,272,648 units at 11 cents per unit for aggregate gross proceeds of $3-million. Each unit consisted of one common share in the capital stock of the company and one-half of one common share purchase warrant. Each warrant entitles the holder thereof to acquire an additional common share at a price of 17 cents for a period of 24 months from the date of issuance.
The net proceeds from the offering will be used to initiate geological and engineering study work toward a second project module in the Vanguard project area. Proceeds will also be used for matters relating to the completion of the proposed joint venture signed with Essel Group ME as detailed in the memorandum of understanding announcement of Nov. 28, 2016, as well as for general working capital purposes.
The company also paid a total of $122,109.37 in finders’ fees and issued 1,110,085 broker warrants to eligible finders in connection with the offering. Each broker warrant will entitle the holder thereof to purchase one unit at an exercise price of 11 cents for a period of 24 months following the closing date of the offering.
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All securities issued in connection with the offering are subject to a statutory four-month-and-one-day hold period.
As part of the offering, certain officers of Gensource purchased an aggregate of 420,489 units. Participation by the insiders in the offering was considered a related-party transaction pursuant to Multilateral Instrument 61-101. Gensource was exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the insiders’ participation in the offering in reliance of sections 5.5(b) (issuer not listed on specified markets) and 5.7(a) (fair market value not more than 25 per cent of market capitalization) of MI 61-101. The company was not in a position to file a material change report more than 21 days in advance of the closing of the offering as the details of participation by the insiders was not known at such time.
Mike Ferguson, president and chief executive officer of Gensource, commented: “We are very pleased with the interest in this financing and the speed with which the placement was sold out. Gensource will use the proceeds to advance the definition of the Vangard projects as identified in our news release of Jan. 13, 2017. We are gratified with the support received from our shareholders, both existing and new, and are excited to move ahead aggressively with project development.”
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