$5 Million Bought Deal Financing
Calgary, Alberta, January 20, 2005: Corridor Resources Inc. (CDH - TSX-V) (the "Corporation") is pleased to announce today that it has entered into an agreement with Jennings Capital Inc. to issue on a "bought deal" basis, 3,225,807 Units of the Corporation (the "Units") at a price of $1.55 per Unit for aggregate gross proceeds of approximately $5,000,000 (the "Offering"), to be issued by way of private placement exemptions as provided for in the Securities Act (Alberta) and comparable provisions in other provinces in Canada. Each Unit comprises one common share (the "Common Shares") and one half of one common share purchase warrant (the "Warrants"). Each full warrant is exercisable for a period of one year from Closing at a price of $1.90 per Common Share.
In addition, the Corporation has granted Jennings an over allotment or "green shoe" option, to be sold on a "best efforts" agency basis, exercisable on or prior to closing, of up to 1,290,323 Units of the Corporation at a price of $1.55 per Unit and up to 1,764,706 Flow-Through Common Shares of the Corporation at a price of $1.70 per Flow-Through Common Share, which would increase the size of the Offering to approximately $10,000,002 if fully exercised.
The private placement financing is scheduled to close by mid-February 2005 and is subject to regulatory approval and completion of definitive documentation. The proceeds of the offering will be used to fund the Corporation's ongoing exploration and development programs in Eastern Canada, including further exploration and development on the McCully property in New Brunswick in 2005 and for general corporate purposes. In the event that the Corporation reaches an agreement in respect of a farmout of its McCully property, the proceeds may be used to fund exploration on the Corporation's other prospects in Eastern Canada.
This press release contains certain forward looking statements relating to, but not limited to, Corridor's operations, anticipated financial performance, business prospects and strategies, including expectations relating to production levels; capital expenditure programs; the quantity of natural gas reserves; projections of market prices; projections of costs; supply and demand for natural gas; expectations regarding the ability to raise capital and to continually add to reserves through exploration and development; and treatment under governmental regulatory regimes. These statements are based on current expectations that involve numerous assumptions regarding factors and risks that could cause actual results to vary materially, including, without limitation to, the following factors: risks associated with oil and gas exploration, financial risks, substantial capital requirements, bank financing, government regulation, environmental, prices, markets and marketing, dependence on key personnel, dependence on Potash Corporation of Saskatchewan, Inc., availability of drilling equipment and access, risks may not be insurable, management of growth, expiration of licenses and leases, reserves estimates, seasonality, competition, conflicts of interest, Kyoto Protocol, issuance of debt, title to properties and hedging. There is no representation by Corridor that actual results achieved will be the same in whole or in part as those set out in the forward looking information. Furthermore, the forward looking statements contained in this press release are made as of the date hereof, and Corridor undertakes no obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events or otherwise.
