Mr. Steve Smith reports
OTISH ENERGY ANNOUNCES CONSOLIDATION, ACQUISITION AND PRIVATE PLACEMENT
Otish Energy Corp will be proceeding with the consolidation of its issued share capital on a 1:4 basis. The company received shareholder approval to the consolidation at its annual and special meeting held on Feb. 26, 2009. Following completion of the consolidation, the company will have 14,447,942 shares outstanding.
The company has also entered into a property purchase and sale agreement with Nicolas Lavoie and Martin Neron, both of Chicoutimi, Que., to acquire a 100-per-cent interest in nine mineral claims forming the Lac du Raton property in the Quesnel township, Lac St-Jean area of Quebec. In consideration for the acquisition, the company has agreed to pay to the vendors the sum of $30,000 and issue 120,000 post consolidated common shares in its capital stock, over a period of two years. The property is subject to a 2-per-cent NSR in favour of the vendors. The company will have the option to reduce the NSR, at any time, to one per cent for a cash payment of $1-million to the vendors.
The Lac du Raton property comprises felsic and alkaline intrusive rocks with stockwerk of magnetite Matoush Northhosted by charnockitic and felsic gneisses. Three grab samples from outcrops yielded total rare earth elements (TREE) values up to 1.22 per cent with Nd (neodymium) content as high as 0.19%. Neodymium is the prime metal in the manufacturing of special magnets for the automotive industry. Results are as follows:
Sample No. Rock type TREE Nd one
93451 felsic breccia 0.85 per cent 0.13 per cent
193456 felsic breccia 0.74 per cent 0.12 per cent
193470 felsic gneiss 1.22 per cent 0.19 per cent
In order to fund the initial acquisition costs and exploration commitments of the acquisition, the company has negotiated a private placement totalling $1-million. These funds will be raised by the Company issuing a combination of up to 7.5 million post consolidated flow-through common shares at a post consolidated price of 10 cents per share, and up to 2.5 milion non-flow-through units at a post-consolidated price of 10 cents per unit, each unit consisting of one post consolidated common share and one share purchase warrant. Each warrant will entitle the holder thereof to acquire one additional post-consolidated common share of the company at a post consolidated price of 15 cents for the first year and 20 cents for the second year; provided however, that in the event the closing price of the company’s shares on the TSX Venture Exchange exceeds 40 cents for 20 consecutive trading days, the Company shall have the right to accelerate the exercise period of the warrants to a date that is not less than 30 days from the date of the company provides notice of its election to accelerate the exercise period.
Finder’s fees may be payable on a portion of the private placement, in accordance with the policies of the TSX Venture Exchange.
A portion of the net proceeds of the private placement will also be used to further exploration on the company’s Matoush North and Tonka properties and for working capital purposes.
