Lero Gold arranges $40-million bought-deal financing

2008-04-18 09:23 ET - News Release

See News Release (C-LER) Lero Gold Corp

Dr. Sergey Kurzin of Lero reports

LERO GOLD CORPORATION: CDN$40 MILLION BOUGHT DEAL PRIVATE PLACEMENT

Lero Gold Corp., further to today's news issued in Stockwatch with European Minerals Corp., has entered into an agreement with Canaccord Adams Ltd. to sell, on a bought-deal, private placement basis, a total of 47,058,824 common shares of the company at a price of 85 cents per common share for gross proceeds of $40-million to qualified investors under the applicable regulations in Canada, the United Kingdom, certain jurisdictions in Europe and the United States. Canaccord is the sole underwriter and bookrunner. Lero will grant to Canaccord the option to increase the offering by up to a total amount of common shares equal to proceeds of $20-million. In addition, Lero will also grant to Canaccord an overallotment option to purchase up to an additional 15 per cent of the number of offering shares at the issue price, exercisable for a period of up to 30 days following the closing of the offering.

The net proceeds from the offering will be used primarily to finance a $25-million loan from Lero to EMC in connection with the proposed acquisition by EMC of all of the outstanding common shares of Lero in exchange for common shares of EMC on a one-share-for-one-share basis (see today's joint announcement of Lero and EMC in Stockwatch for further details), to finance continued exploration and drilling on Lero's Taldybulak Talas (Kazakhstan) and Karchiga (Kyrgyzstan) projects, with the remainder being used for working capital and potential acquisitions. EMC plans to use the net proceeds of the loan financing to finance advancement of its mineral projects and for general corporate purposes.

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