Northern Dynasty Minerals Planning to Raise $20 Million

Northern Dynasty Minerals Ltd. (TSX:NDM,NYSEMKT:NAK) announced plans to raise up to $20 million through issuing $10 to $15 million worth of special warrants and acquiring Cannon Point Resources Ltd. (TSXV:CNP), an inactive company whose main asset is $4.7 million in cash.
The special warrants will be exercisable into Northern Dynasty’s listed common shares at a price of $0.399 each. Both transactions are subject to the execution of definitive agreements within 15 business days, plus other approvals.
As quoted in the press release:

The Special Warrants will be privately placed with accredited investors, management and insiders of the Company. The Special Warrants will convert on voluntary or automatic exercise into common shares of Northern Dynasty on a one-for-one basis. The Company will file a prospectus in applicable Canadian provinces to qualify the exercise of the Special Warrants in Canada and will concurrently file a registration statement in the United States to qualify the resale of common shares in the United States by certain U.S. investors. The Company will use commercial efforts to clear both the Prospectus and Registration Statement (the “Resale Filings”) within 90 days from the Closing Date and has agreed to maintain the Registration Statement effective for a period of up to 24 months. There are no share bump-up or other penalties if clearance of the Resale Filings is delayed. Additional details of the Special Warrant terms will be contained in the Resale Filings along with general prospectus disclosure about Northern Dynasty.
Based on a letter agreement dated today, the Company expects to acquire 100% of Cannon Point for approximately 12.9 million Northern Dynasty common shares, subject to the approval of a special 2/3 majority vote of Cannon Point shareholders as well as customary regulatory and judicial approvals. The acquisition is not subject to Northern Dynasty shareholder approval. During the merger process, which will be by conventional statutory plan of arrangement, Cannon Point has agreed to make a secured credit facility for $4.25 million available to Northern Dynasty. The amounts borrowed would be repayable after 30 days if due to a Northern Dynasty breach and 180 days from termination if the merger does not complete for any other reason. Holders of approximately 21% of Cannon Point Shares have agreed to support the merger transaction, including shareholders associated with Fiore Management & Advisory Corp. The acquisition of Cannon Point is subject to negotiation of a definitive agreement, which will be filed on SEDAR.com when executed which is anticipated to occur within the next 30 days. The private placement of Special Warrants is not conditional on the Cannon Point acquisition, but the Cannon Point acquisition is conditional on at least $10 million of Special Warrants being sold.

Click here to read the full Northern Dynasty Minerals Ltd. (TSX:NDM,NYSEMKT:NAK) press release.