U.S. Gold Corporation announces closing of private placement for US$75.15 Million (February 22, 2006)
For Immediate Release
Denver, Colorado (February 22, 2006) - U.S. Gold Corporation
(OTCBB: USGL) is pleased to announce that it has closed
the previously announced private placement of 16,700,000
subscription receipts (the "Subscription Receipts"),
including an over-allotment, at a price of US$4.50
for aggregate gross proceeds of US$75.15 million.
Each Subscription Receipt is automatically convertible
into one Unit, subject to adjustment and dilution penalties
in certain instances, upon the satisfaction of certain
stated conditions (the "Escrow Conditions").
Each Unit is comprised of one share of the Company's
common stock (a "Common Share") and one-half
of one Common Share purchase warrant (a "Warrant").
Each whole Warrant will entitle the holder thereof
to purchase one Common Share (a "Warrant Share")
for a period of 5 years at a price of US$10.00. The
Escrow Conditions include, among other items, the filing
and effectiveness of a resale registration statement
in the United States, a receipt for a (final) prospectus
in Canada qualifying the securities underlying the
Subscription Receipts and the listing of the Common
Shares on the Toronto Stock Exchange.
The net proceeds from the Offering will be used for
the exploration of the Tonkin Springs gold project
in Nevada and for general corporate and working capital
purposes. 50% of the net proceeds of the offering are
being held in escrow pending the satisfaction of the
Escrow Conditions. In the event that the Escrow Conditions
are not satisfied within 12 months of the closing of
the Offering, the escrowed proceeds shall be returned
to the holders of the Subscription Receipts in exchange
for the 50% of the outstanding Subscription Receipts
held by each holder. The remaining 50% of the Subscription
Receipts will be converted into Units not later than
18 months after the closing of the offering.
If all the Subscription Receipts are converted into
Units and all Warrants and securities issued or to
be issued as compensation in the offering are exercised,
a total of 26,553,000 Common Shares will be issued
in this transaction.
The securities have not been registered under the Securities
Act of 1933, as amended, or applicable state securities
laws, and may not be offered or sold in the United
States absent registration or an applicable exemption
from the registration requirements of the Securities
Act of 1933, as amended, and applicable state laws.
This press release shall not constitute an offer to
sell or the solicitation of an offer to buy the securities
nor shall there be any sale of the securities in any
state in which such offer, solicitation or sale would
be unlawful.
Certain statements contained herein and subsequent
oral statements made by and on behalf of the Company
may contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform
Act of 1995. Such forward-looking statements are sometimes
identified by words such as "intends," "anticipates," "believes," "expects" and "hopes" and
include, without limitation, statements regarding the
Company's plan of business operations, potential contractual
arrangements, receipt of working capital, anticipated
revenues and related expenditures and involve a number
of risks and uncertainties that could cause actual
results to differ materially from projected results.
Such factors include, among others, the willingness
and ability of third parties to honor their contractual
obligations, the decisions of third parties over which
the Company has no control, commodity prices, environmental
and government regulations, availability of financing,
judicial proceedings, force majeure events, and other
risk factors as described from time to time in the
Company's filings with the Securities and Exchange
Commission. Many of these factors are beyond the Company's
ability to control or predict. Investors are cautioned
not to put undue reliance on forward-looking statements.
Except as otherwise required by applicable securities
statutes or regulations, the Company disclaims any
intent or obligation to update publicly these forward
looking statements, whether as a result of new information,
future events or otherwise.
For future information, contact:
William F. Pass
Vice President and Chief Financial Officer
Tel: (303) 238-1438
Fax: (303) 238-1724
bill@usgold.com
2201 Kipling Street, Suite 100
Lakewood, Colorado 80215
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