Angkor Resources Corp. has closed a non-brokered private placement of units with Sorbie Bornholm LP for gross proceeds of $3.5 million, the company announced on NEWMEDIAWIRE. The financing, originally announced earlier, consists of 14 million common shares priced at $0.25 per share, 2.87 million warrants exercisable at $0.32, and 11.13 million additional warrants that will be issued in monthly tranches over 24 months at a 5% premium to the volume-weighted average price of the shares over the preceding 20 trading days. All warrants carry a three-year maturity.
The structure of the deal is notable for its unusual escrow and sharing arrangements. The subscription proceeds have been deposited by Sorbie under an ISDA Credit Support Annex in the form of a portfolio of UK government bonds with a fair market value of at least $3.5 million. The common shares have been placed in escrow with Olympia Trust Company. Under a sharing agreement and escrow agreement, the proceeds, shares, and additional warrants will be released in 24 equal monthly tranches beginning 30 days after closing.
The sharing agreement introduces a performance-based element to the financing. At each monthly settlement, Angkor's economic interest will be measured against a benchmark price of $0.3144. If the volume-weighted average price is below the benchmark, Angkor will receive less than 100% of the monthly release amount on a pro-rata basis. If the volume-weighted average price is above the benchmark, Angkor will receive more than 100% of the monthly release amount, with no upper limit on the additional proceeds. However, the maximum number of common shares Sorbie can receive at each settlement is fixed.
Angkor has paid Sorbie a corporate finance fee of $210,000 in the form of 840,000 common shares at $0.25 and 840,000 warrants exercisable at $0.32, both subject to escrow. A finder's fee was also paid to an arm's length party, consisting of a $175,000 cash fee payable in monthly tranches over 24 months and 700,000 finder warrants exercisable at $0.32 that vest equally over the same period.
All warrants and additional warrants include an equity blocker preventing exercise if it would result in Sorbie owning more than 9.99% of Angkor's issued and outstanding common shares. Angkor Resources is a Canadian public company engaged in mineral and hydrocarbon exploration and development in Cambodia and other strategic jurisdictions, according to its website at resources.com.
For investors, the financing provides Angkor with capital while aligning a portion of the proceeds with share price performance. The monthly release structure means Angkor will not receive the full $3.5 million upfront, but the arrangement could yield more than the initial amount if the share price rises above the benchmark. Conversely, a lower share price would reduce the proceeds Angkor receives. The full details of the financing are available in the original release at www.newmediawire.com.
