Patriot Gold Corp (PGOL)

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This is great news for PGOL. $1.6B Hecla makes a strategic investment in PGOL's partner Canamex. PGOL sits backs while these two on bringing the mine into production (fingers crossed)...

Canamex arranges $2.52-million financing with Hecla

2012-11-19 08:37 ET - News Release

CANAMEX RESOURCES CORP. ANNOUNCES $2,520,000 STRATEGIC INVESTMENT FROM HECLA MINING COMPANY

Canamex Resources Corp. has entered into an agreement pursuant to which Hecla Canada Ltd., a wholly owned subsidiary of Hecla Mining Company, has agreed to acquire 14 million common shares of Canamex to be issued at a price of 18 cents per share for gross proceeds of $2.52-million. The issue price is equal to the 20-day volume-weighted average trading price of the Company's shares at the time pricing was negotiated by the parties.

Greg Hahn, the President and COO of Canamex, stated: "A $1.5 billion+ NYSE-listed company, Hecla Mining Company is one of the largest and lowest-cost silver producers in the United States with over a century of experience building and operating mines. We are delighted Hecla has chosen to enter into a strategic relationship with Canamex. Hecla brings a wealth of exploration, development and operating history to the relationship, which will be invaluable as we move our Bruner Gold Project forward."

On closing of the Financing, Hecla will own 14.84% of the Company's outstanding shares based on the number of shares outstanding on the date hereof. Pursuant to the subscription agreement entered into between the Company and Hecla and the terms of an ancillary rights agreement required to be entered into between the parties at the closing of the Financing, Hecla's investment in the Company will be subject to various rights and restrictions, the principal terms of which are set forth below:

-- Board Representation: For so long as Hecla holds more than 10% of Canamex's outstanding shares (on an undiluted basis), Hecla will have the right to nominate one person to the board of directors of Canamex, and Canamex's board must consist of no more than 7 members.

-- Voting Agreement: For a period of one year after the closing of the Financing, Hecla will vote all its shares in favour of management's proposals of routine business at any meeting of shareholders (namely, the election of directors, appointment of auditors and approval of the stock option plan).

-- Resale Restriction: Hecla will be restricted from selling any of its Canamex shares for a period of 12 months following closing of the Financing, except as may otherwise be approved by Canamex or in relation to any takeover bid made by a third party not acting in concert with Hecla.

-- Pre-emptive Right: For so long as Hecla holds more than 10% of Canamex's outstanding shares (on an undiluted basis), Hecla shall have the right to participate in future equity offerings of Canamex, including in respect of common shares of Hecla issued on exercise of outstanding common share purchase warrants, in order to maintain Hecla's pro-rata equity interest in Canamex.
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