North Arrow Minerals Inc. (TSXV-NAR) announced on August 5th, 2011 that it has arranged, subject to regulatory approval, a $1,000,000 private placement of a convertible note with Anglo-Celtic Exploration Ltd. ("Anglo-Celtic" or the "Lender"), a private company controlled by D. Grenville Thomas, who is a director of North Arrow. As a result of the private placement, Mr. Thomas, through Anglo-Celtic, may become a "Control Person" (as defined in the TSX Venture Exchange's policies) of North Arrow. The creation of a new Control Person requires disinterested shareholder approval, which North Arrow will seek from shareholders at the next Annual General Meeting.
The private placement will consist of a convertible note, structured as an unsecured, interest-bearing loan of $1,000,000. The term of the loan will be for one-year, following receipt of all required regulatory approvals. The Lender may convert at any time all or a portion of the principal amount outstanding under the promissory note into common shares of North Arrow at a conversion price of $0.25 per common share, resulting in the issuance of up to 4,000,000 common shares if the entire principal amount is converted.
Anglo-Celtic will not receive any warrants when the convertible note is issued. If however North Arrow fails to repay the loan in full by the due date or if North Arrow and Anglo-Celtic amend or re-negotiate the terms of the loan in future, Anglo-Celtic will have the right to convert the principal amount of the note into both shares and an equal number of warrants. Each warrant will entitle Anglo-Celtic to purchase one common share exercisable at a price of $0.25 for two years from the date of issuance of the warrant. If the entire $1 million loan principal was converted and if any warrants were issued on conversion and were exercised in full, then up to 8,000,000 common shares would be issued to Anglo-Celtic.
Subject to the prior acceptance of the Exchange, Anglo-Celtic also has the right to convert accrued and unpaid interest on the outstanding principal under the note into both shares and possibly an equal number of warrants, with each warrant entitling Anglo-Celtic to purchase one additional share exercisable at the then market price for two years from the date of issuance of the warrant. North Arrow will pay interest to Anglo-Celtic at the prime rate charged by the Royal Bank plus 400 basis points. The loan will accrue interest to the date of repayment and will be calculated monthly on the last day of the month.
Proceeds from the loan will be used to continue to fund North Arrow's exploration activities and for working capital purposes.
About North Arrow Minerals
North Arrow Minerals is a well-established junior exploration company with a diversified portfolio of gold, base metal and diamond projects. Most of the North Arrow's 2011 field programs on Canadian properties are funded through option or joint venture agreements, allowing the Company to focus its resources on the acquisition and development of advanced exploration properties in South America. North Arrow has signed a letter of intent to acquire the Agua Grande gold-copper project in Chile and is currently conducting a due diligence program.
North Arrow Minerals Inc.
/s/ "Brian McEwen"
Brian McEwen
President and COO
For further information, please contact:
Julie Hajduk
Corporate Communications
Tel: 604-681-5543/ Cell : 778-240-7077
Email: [email protected]
Website: www.northarrowminerals.com
Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements The information in this press release includes certain "forward-looking statements". All forward-looking statements and information are based on the Company's current beliefs as well as assumptions made by and information currently available to the Company concerning anticipated financial performance, business prospects, strategies, regulatory developments, development plans, exploration, development and mining activities and commitments. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. The Company's forward looking statements reflect the beliefs, opinions and projections of management on the date the statements are made. These forward-looking statements are made as of the date of this press release and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law.
