TORONTO, Ontario, February 24, 2010 — Gleichen Resources Ltd.. (the “Company”) (TSX:GRL) has completed its previously announced Cdn$50 million bought deal equity financing. An underwriting syndicate, led by Macquarie Capital Markets Canada Ltd. and co-led by BMO Nesbitt Burns Inc. and GMP Securities L.P. and including Dundee Securities Corporation and Jones Gable & Company Limited, has purchased 50 million common shares of the Company at a price of Cdn$1.00 per share for gross proceeds of Cdn$50,000,000.
The Company has granted to the Underwriters an over-allotment option to purchase up to an additional 7,500,000 common shares at the offering price, exercisable in whole or in part, at any time on or prior to the date that is 30 days following the date hereof. If this option is exercised in full, an additional Cdn$7,500,000 will be raised pursuant to the offering and the aggregate gross proceeds of the offering will be Cdn$57,500,000.
The Company plans to use the net proceeds from the offering to fund its previously announced acquisition from Desarrollos Mineros San Luis, S.A. de C.V. (“DMSL”), a wholly-owned subsidiary of Goldcorp Inc., of all of the shares in the capital of Minera Media Luna, S.A. de C.V. (“MML”) held by DMSL, representing 21.2% of the issued and outstanding shares of MML. The Company, through its direct and indirect subsidiaries, currently holds the other 78.8% of the issued and outstanding shares of MML. MML holds a 100% interest in the Morelos gold project in Mexico (the “Morelos Project”).
The Company is also pleased to announce that the common shares under the offering, together with the Company’s previous issued and outstanding common shares and common share purchase warrants, commenced trading on the Toronto Stock Exchange at the open of trading today, and have been delisted from the TSX Venture Exchange.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Gleichen Resources Ltd., is a well funded, growth oriented Canadian mining company engaged in the exploration and development of precious metal resources with a focus on gold. It owns 78.8% of the Morelos Project, an advanced stage gold exploration property, located 180km southwest of Mexico City. The Company’s Board of Directors has approved a change of the Company’s name to Torex Gold Resources Inc., pending approval at its next annual and special meeting of shareholders.
For further information, please contact:
GLEICHEN RESOURCES LTD.
President and CEO
Tel. (647) 260-1502
Gabriela M. Sanchez
Vice President Investor Relations
Tel. (647) 260-1503
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation and United Stated federal securities laws. Forward-looking information includes, but is not limited to, information with respect to the Company’s proposed acquisition of the remaining 21.2% indirect interest in the Morelos Project, intended use of proceeds of the net proceeds from the equity financing transaction, future exploration and development plans, the adequacy of the Company’s financial resources, business plans and strategy and other events or conditions that may occur in the future. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “does not anticipate”, or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, or “will be taken”, “occur”, or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including risks associated with the exploration, development and mining industry such as economic factors as they effect exploration, future commodity prices, obtaining financing, market conditions, changes in interest rates, actual results of current exploration activities, government regulation, political or economic developments, environmental risks, insurance risks, capital expenditures, operating or technical difficulties in connection with development activities, personnel relations, the speculative nature of gold exploration and development, including the risks of diminishing quantities of grades of resources and reserves; contests over title to properties, and changes in project parameters as plans continue to be refined. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. Assumptions have been made regarding, among other things: the Company’s ability to successfully complete the acquisition of the remaining 21.2% indirect interest in the Morelos Project, carry on its exploration and development activities, the timely receipt of any required approvals, the price of gold, the ability of the Company to obtain qualified personnel, equipment and services in a timely and cost-efficient manner, the ability of the Company to operate in a safe, efficient and effective manner, the ability of the Company to obtain financing on acceptable terms, the accuracy of the Company’s resources estimates and geological, operational and price assumptions on which these are based and the regulatory framework regarding environmental matters. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.