North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Northern Dynasty Minerals Ltd. Aug. 11 reported plans to raise up to C$20 million by issuing C$10-C$15 million of special warrants exercisable into the company's listed common shares at a price of C39.9 cents per warrant together with acquisition of Cannon Point Resources, an inactive TSX Venture Exchange-listed company whose primary asset is C$4.7 million cash.

The special warrants will be privately placed with accredited investors, management and insiders of the company.

The warrants will convert on voluntary or automatic exercise into common shares of Northern Dynasty on a one-for-one basis.

To acquire Cannon Point, Northern Dynasty has agreed to issue about 12.9 million common shares.

During the merger process, Cannon Point has agreed to make a secured credit facility for C$4.25 million available to Northern Dynasty.

The amounts borrowed would be repayable after 30 days if Northern Dynasty breaches the deal and 180 days from termination if the merger is not completed for any other reason.

Holders of about 21 percent of Cannon Point shares have agreed to support the merger transaction, including shareholders associated with Fiore Management & Advisory Corp. The placement of special warrants is not conditional on the Cannon Point acquisition, but the Cannon Point acquisition is conditional on at least C$10 million of the warrants being sold.

The warrants offering is expected to close by mid-August and the Cannon Point acquisition within 120 days.

The proceeds of the financings will be used for working capital and to advance the Pebble Project by implementing Northern Dynasty's legal and environmental strategies.

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Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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