Zenyatta Ventures Ltd. Common Shares Listed on TSX Venture Exchange in Contemplation of Completion of Initial Public Offering.
Toronto, Ontario (December 22, 2010): Zenyatta Ventures Ltd. (TSXV: ZEN) (“Zenyatta”) is pleased to announce that the common shares of the company commenced trading on the TSX Venture Exchange (“TSXV”) under the symbol “ZEN”, after trading on the TSXV closed on December 22, 2010.
The listing of the common shares is in contemplation of completion of Zenyatta’s Initial Public Offering (the “Offering”) which is scheduled to be completed prior to commencement of trading on the TSXV on December 23, 2010. If the Offering is not completed prior to commencement of trading on the TSXV, the trading of the common shares of Zenyatta will be halted until completion of the Offering.
On December 15, 2010, Zenyatta filed a final prospectus with the securities commissions and applicable regulatory bodies in each of the provinces of Canada other than Quebec, and had earlier received conditional approval to list Zenyatta’s common shares on the TSXV. A copy of Zenyatta’s prospectus can be viewed on SEDAR (www.sedar.com).
The Offering will raise total gross proceeds of $9,926,459 through a syndicate of agents led by Jennings Capital Inc. and including GMP Securities L.P. (collectively, the “Agents”). Pursuant to the Offering, Zenyatta will issue 11,197,600 common shares at a price of $0.60 per share for gross proceeds of $6,718,560, and 4,582,713 flow-through common shares at a price of $0.70 per share for gross proceeds of $3,207,899. A cash commission of $587,695 equal to 6.5% of the gross proceeds (other than proceeds from the subscription by Cliffs NRE, discussed below) will be paid, and 929,845 Agents’ Warrants equal to 6.5% of the shares to be sold (other than shares issued to Cliffs NRE, discussed below) will be issued to the Agents. Each such Agents’ Warrant will entitle the holder to purchase one common share at $0.60 per share until December 23, 2012. The Agents will also receive $57,000 plus applicable HST and warrants to acquire 95,000 common shares as an advisory fee in connection with the Offering. Each such warrant will entitle the holder to purchase one common share at $0.60 per share until December 23, 2012. Zenyatta will also pay an aggregate cash fee of $148,897 equal to 1.5% of the gross proceeds, and will issue 236,704 Compensation Warrants equal to 1.5% of the shares sold to Fox Collins Securities Inc., who acted as a financial advisor to Zenyatta in connection with the IPO. Each such Compensation Warrant will entitle the holder to purchase one common share at $0.60 per share until December 23, 2012.
Cliffs Natural Resources Exploration Inc., a wholly-owned subsidiary of Cliffs Natural Resources Inc. (NYSE:CLF), an international mining and natural resource company, will acquire 1,475,000 shares of Zenyatta for an aggregate purchase price of $885,000 pursuant to the Offering, and will hold 4,675,000 shares of Zenyatta representing 11.8% of Zenyatta’s outstanding shares after completion of the Offering.
Net proceeds from the Offering will be used to conduct an extensive two-phase exploration program on Zenyatta’s Albany Project located in the “Arc of Fire” region within the Porcupine Mining District of northern Ontario (north of Lake Superior and west of James Bay) over the next twenty four months, and for general working capital. The Albany Project is currently owned 25% by Zenyatta and 75% by Cliffs Natural Resources Exploration Canada Inc., another wholly-owned subsidiary of Cliffs Natural Resources Inc. Pursuant to an Option Agreement between Zenyatta, Cliffs Natural Resources Exploration Inc. and Cliffs Natural Resources Exploration Canada Inc., Zenyatta has the right to earn an additional 55% of the Albany Project.
The recommended two-phase exploration program on the Albany Project is to include geophysical modeling and a minimum of 22,000 metres of diamond drilling to test airborne magnetic and electro-magnetic anomalies. The proposed two-phase budget for exploration on the Albany Project is estimated to cost a total of $8,507,446; $5,083,263 in respect of the Phase I and $3,424,183 in respect of the Phase II.
The securities described herein 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 accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the company's securities in the United States.
For further information please contact:
Zenyatta Ventures Ltd.
President and CEO
Tel: (807) 346-1660
Fax: (807) 345-4412 (fax)
Web site: www.zenyatta.ca
NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE SERVICES
CAUTIONARY STATEMENT: Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release contains forward-looking information which is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, Zenyatta's objectives, goals or future plans, the completion of the Offering and the timing thereof, and the estimated timing and cost of the exploration of the Albany Project. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, those risks set out in Zenyatta's public documents filed on SEDAR. Although Zenyatta believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Zenyatta disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.