Yukon Zinc Corporation
Monday, October 8th, 2007
Yukon Zinc Corporation is pleased to announce that it has filed a preliminary prospectus in certain provinces of Canada for a brokered, best-efforts offering of securities (the â€œOfferingâ€) with a syndicate lead by Haywood Securities Inc., co-lead by Paradigm Capital Inc., and including Blackmont Capital Inc. (â€œthe Agentsâ€).
Dr. Harlan Meade, President and CEO of the Company said:”We are very pleased to announce this additional financing to complete the project financing for the Wolverine Project. The completion of the Offering will allow us to move on to mine development at Wolverine, which will advance the process of extracting the value out of Wolverine for our shareholders “.
The net proceeds will be used to fund the balance of the required Wolverine Project capital funding requirements and for general corporate purposes. The net proceeds of the Offering, less $15 million, will be held in escrow and will be released to the Company in order for it to be able to meet the additional funding requirements of the previously-announced Barclays Capital US$140 million underwritten senior debt facility (see August 27, 2007 News Release).
The completion of the Offering, together with the Barclays Facility, will enable the Company to proceed with construction at the Wolverine Project. In addition, completion of the Offering will enable the Company to consider certain corporate initiatives, which could include applying to the Toronto Stock Exchange for the listing of the Companyâ€™s securities and a consolidation of the share capital of the Company.
The Offering consists of three components: Debt Units, Convertible Note Units and Equity Units (â€œthe Securitiesâ€). The Debt Units will be comprised of unsecured notes and common shares, the Convertible Note Units will be comprised of unsecured notes convertible into common shares and common shares and the Equity Units will consist of one common share and common share purchase warrants, or a fraction thereof, exercisable to purchase common shares.
The three components will aggregate, in total, C$140 million, plus a 10 per cent over allotment option on each component of the Offering. The Agents may also arrange for the sale of the Securities in certain foreign jurisdictions pursuant to applicable securities laws. The Offering is subject to receipt of regulatory approvals and other standard conditions.
The pricing and terms of the Securities will be determined in the context of the market with the closing date expected to be near the end of October, 2007. The Agents will receive a 3.75 per cent selling commission on proceeds from the sale of Debt Units and Convertible Note Units and will receive a 6.00 per cent commission on proceeds from the sale of Equity Units. In addition, the Agents will receive compensation options equal to 6.00 per cent of the number of Equity Units sold. The compensation warrants will have a term of 24 months from the closing date and have an exercise price equal to the issue price of the Common Shares under the Offering.