Ram Power closes offering for proceeds of $70.6m

Ram Power closes offering for proceeds of $70.6m ThermaSource drilling rig on project site at San Jacinto, Nicaragua (source: Ram Power)
Alexander Richter 21 May 2011

Ram Power completes offering with a group of underwriters, for total proceeds of $70.6 million, to be used primarily to fund remaining equity requirements for its San Jacinto-Tizate project in Nicaragua and working capital purposes.

In a release, “Ram Power, Corp. (TSX:RPG) announces that it has completed its previously announced offering of 127,272,727 units. The Offering was made pursuant to an underwriting agreement between the Company and a syndicate of underwriters led by Cormark Securities Inc., and including Raymond James Ltd., Jacob Securities Inc., National Bank Financial Inc. and Wellington West Capital Markets Inc..

The Units were offered at a price of $0.55 per Unit. Each Unit is comprised of one common share of the Company and one common share purchase warrant. Each Warrant will be exercisable for one Common Share for a period of 36 months from the completion of the Offering at the price of $0.72 per Warrant, subject to earlier termination in the event that the 20 trading day volume weighted average trading price of the Common Shares is equal to or greater than $1.08.

Pursuant to the Underwriting Agreement, Ram Power has also granted to the Underwriters an option, exercisable for a period of 30 days following the closing of the Offering, to purchase up to an additional 9.8 million Units for the purposes of satisfying over-allotments, if any, and for market stabilization purposes. Concurrently with the closing of the Offering, the Underwriters partially exercised this over-allotment option for an additional 1,145,373 Units. As a result, the gross proceeds raised today by the Company was $70,629,955.

The net proceeds from the Offering will be primarily used to fund the remaining equity requirements for the construction of the Company’s San Jacinto-Tizate project site near Leon, Nicaragua and for working capital purposes.

Of these net proceeds, US$10 million was used today to repay an additional bridge loan that the Company borrowed earlier this week from Newberry International Holdings Inc., Exploration Capital Partners 2000 Limited Partnership and Helmsdale Bank Corp. This additional bridge loan was put into place by the Company in order for it to pay for critical path items associated with the construction of the Phase I expansion at the Company’s San Jacinto-Tizate project and to continue resource development at San Jacinto-Tizate for the Phase II expansion.

The Warrants will trade on the Toronto Stock Exchange under the symbol “RPG.WT””

Source: Company release via CNW