|May 19, 2006|
Silver Spruce announces: $4.69 million Financing Approved
BRIDGEWATER, NS, CANADA -- May 19 2006 - Silver Spruce Resources Inc. (the Corporation") (TSX-V: SSE), a junior mineral exploration company, has announced that it closed late yesterday with Pacific International Securities Inc. its previously announced brokered private placement raising gross proceeds of $4,690,000. The offering consisted of the issuance of 4,800,000 flow-through units ("FT Units") and 3,620,000 non-flow-through units (the "Units") of the Corporation.
Each FT Unit was offered at a price of $0.60 and consisted of one flow-through common share and one common share purchase warrant, with each warrant exercisable at a price of $0.65 per common share for a period of 18 months following the close of the offering.
Each Unit was issued at a price of $0.50 and consisted of one non-flow-through common share and one common share purchase warrant, with each warrant exercisable at a price of $0.65 per common share for a period of 18 months following the closing of the offering. As consideration for acting as agent, the Corporation has paid to the Agent a commission of 7% of the aggregate gross proceeds of the offering payable in a combination of cash and units having the same terms as the Units of the offering. In addition, the Corporation has paid the Agent compensation options in aggregate equal to 9 per cent of the total number of Units and FT Units sold under the offering, which will entitle the Agent the right to purchase, at an exercise price equal to $0.65 each one common share for a period of 18 months following the closing.
The funds raised from the issuance of the FT Units will be used for general exploration expenditures on the Corporation's Newfoundland and Labrador projects, which will constitute Canadian exploration expenses (as defined in the Income Tax Act (Canada)) and will be renounced for the 2006 taxation year. Proceeds arising from the sale of the Units will be used for exploration on the Corporation's Newfoundland and Labrador properties and for general working capital purposes.
All securities issued in connection with this offering will be subject to a four-month hold period in accordance with applicable securities requirements. The offering is subject to fulfillment of the post closing requirements of the TSX Venture Exchange. The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") and were offered and sold within the United States only to Accredited Investors (as defined in Rule 501(a) of Regulation D under the U.S. Securities Act). Prospective subscribers of the Units in the United States are hereby notified that the seller of the Units is relying upon the exemption from the provisions of Section 5 of the U.S. Securities Act provided in Section 4(2) of the U.S. Securities Act for non-public offerings. The Securities offered hereby are not transferable except in accordance with the restrictions described herein.
On behalf of the Board of the Corporation, Gordon Barnhill Telephone: (902) 527-5700, Fax: (902) 527-5711.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this Release.
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