Dec 28 2010
California Gold Corp. (OTC Bulletin Board: CLGL) announced it has completed a closing of a private placement offering pursuant to which the Company sold to various institutional and accredited investors and non-U.S. persons 58,478,258 units of its securities for gross proceeds of $1,461,956.45, at an offering price of $0.025 per Unit.
36,478,258 of the Units consist of one share of the Company's common stock, par value $0.001 per share (the "Common Stock"), and a warrant to purchase one-half share of Common Stock at an exercise price of $0.125 per whole share (the "Warrants"). Another 22,000,000 of the Units each consist of one share of the Company's Series A convertible Preferred stock, par value $0.001 per share (the "Series A Preferred Stock"), and Warrants to purchase one half of one share of Common Stock. The Warrants will be exercisable from issuance until eighteen months after the closing of the Offering. The Company plans to apply the net proceeds of this closing towards the AuroTellurio Acquisition, certain outstanding accounts payable and working capital.
As previously reported, the Company signed a binding letter of intent (the "LOI") with Mexivada Mining Corp. ("Mexivada") to acquire up to an 80% interest in Mexivada's La Viuda and La Viuda-1 concessions comprising its AuroTellurio tellurium-gold-silver property south of the city of Moctezuma, Sonora, Mexico (the "AuroTellurio Acquisition"). The AuroTellurio project directly adjoins a tellurium project now in active development as a tellurium mine by First Solar, Inc. (NASDAQ: FSLR), the multi-billion solar manufacturing firm.
The Company has completed its due diligence on the AuroTellurio property, and has determined to proceed with the AuroTellurio Acquisition. It expects a definitive purchase agreement and joint venture agreement to be negotiated and signed by the parties within a reasonable time period.
James Davidson, Chief Executive Officer of the Company, stated: "We are very excited about closing our private placement offering which now enables us to complete our agreement with Mexivada to acquire up to an 80% interest in Mexivada's AuroTellurio tellurium-gold-silver mining project in Mexico. The fact that First Solar, Inc. is now developing a directly adjacent tellurium mining project next to this property holds great promise for significant discovery by California Gold Corp.
"We see this joint venture project as uniquely suited for the times. The "rare-earth" tellurium has important uses in alternative energy, while gold and silver, we believe, are likely to continue to rally due to macroeconomic conditions. As Nobel Prize-winning economist Robert Mundell, 'the father of the Euro,' recently warned, 'We are living in the worst monetary instability in the last 3,000 years.' The prospect for precious metals has seldom been more promising."