VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Feb. 15, 2007) - True North Gems Inc. (TSX VENTURE:TGX) ("True North") announces that it has engaged Dundee Securities Corporation (the "Agent") to complete a $5.5 million brokered private placement on a commercially reasonable efforts basis, subject to regulatory approval. Under the private placement, the Company will offer up to 10,000,000 units at a price of $0.55 per unit. Each unit will consist of one common share and one-half of one non-transferable common share purchase warrant, each whole such warrant entitling the holder to purchase an additional common share for a period of two years from closing, at a price of $0.70 per share during the first year and at a price of $1.00 per share during the second year. If the trading price of the common shares of the Company closes above $1.10 per share in the first year or $1.65 in the second year for a period of 20 consecutive trading days at any time after four months and one day after closing the private placement, the Company will have the right to accelerate the expiry date of all unexercised warrants.
The Company has also granted the Agent an over-allotment option to place up to an additional 2,500,000 units at a price of $0.55 per unit, exercisable prior to the closing of the private placement.
The Agent will be paid a cash commission equal to 8% of the gross proceeds of the private placement and will be issued broker warrants exercisable for common shares equal in number to 8% of the number of units sold in the private placement, each such broker warrant exercisable on the same terms as the private placement warrants (except that they will not be subject to the acceleration provision).
The Company intends to use the proceeds from the private placement for exploration on its Greenland ruby property and for general working capital purposes.
This news release does not constitute an offer to sell or the solicitation of an offer to buy any units within the United States. The units have not been offered and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws. Accordingly, the units may not be offered or sold in the United States or to U.S. persons (as such terms are defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws or an exemption from such registration is granted.
Some statements in this news release contain forward-looking information. These statements include, but are not limited to, statements with respect to the completion of transactions, the timing and amount of issuances of securities and the uses of proceeds. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the ability to complete contemplated transactions and securities issuances and the uses of proceeds.
FOR FURTHER INFORMATION PLEASE CONTACT:
True North Gems Inc.
Greg Fekete
President
(604) 687-8055 or 1-800-399-8055
Website: www.truenorthgems.com
