CALGARY, Aug. 29 /CNW/ -- Trading Symbol: TSX-V: IG
CALGARY, Aug. 29 /CNW/ - Infinito Gold Ltd. (the "Company") announces that it has completed the non-brokered private placement of an aggregate of CDN$18 million principal amount of convertible notes (the "Notes") with Exploram Enterprises Ltd. ("Exploram") and Auro Investments Ltd. ("Auro") announced on August 27, 2008. The Notes mature on August 29, 2013, bear interest at 11% per year, payable monthly, and are convertible at any time up to maturity into common shares of the Company at $0.635 per share. The Company has the right to prepay the Notes, in whole or in part, at any time after 30 months after their date of issue, subject to the holders' rights to convert before prepayment. The Notes include negative covenants, positive covenants and conversion right adjustment provisions that are typical for transactions of this nature. The Notes also contain events of default typical to transactions of this nature, including a breach of the terms of the Notes, cross-defaults with other indebtedness, bankruptcy, insolvency or receivership proceedings, a change of control of the Company, a change of business of the Company's Costa Rican subsidiary and relating to securing a standard regulatory approval within a certain time frame. Cash structuring fees aggregating $540,000, or 3% of the aggregate principal amount of the Notes, were be paid to Exploram and Auro, in proportion to their respective subscriptions. The Company has also agreed to secure the Notes by a fixed and floating charge over all of the assets of the Company, if requested over the term of the Notes by Exploram or Auro.
The proceeds will be used to advance the ongoing construction of the Company's Crucitas mine in Costa Rica as well as for general corporate purposes. The Company completed the financing promptly as the funds were needed urgently to pay certain expenses.
The Notes and the shares issuable upon conversion of the Notes are subject to a hold period expiring on December 30, 2008.
Exploram is the controlling shareholder of the Company and acquired CDN$12,500,000 principal amount of Notes and Auro is a company associated with Steven Dean, the Chairman of the Company, and acquired CDN$5,500,000 principal amount of Notes; therefore, the transaction is a related party transaction for the purposes of TSX Venture Exchange Policy 5.9. A special committee of independent directors of the Company was struck to consider and negotiate the terms of the transaction.
Caution Regarding Forward-Looking Information and Statements
Certain statements in this press release 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. These factors include, among others, the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, the possibility that all necessary governmental and regulatory approvals will not be received, and the availability of a qualified workforce and third party contractors necessary for the development and operation of a mine. The Company undertakes no obligation to update these forward-looking information or statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking information or statements.
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INFINITO GOLD LTD.
John Morgan
President
"The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release."
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