Angkor Resources Corp. has closed a non-brokered private placement of units with Sorbie Bornholm LP, raising gross proceeds of $3.5 million, according to a release distributed via NEWMEDIAWIRE. The financing is notable not only for its size but for its unusual structure, which ties the company's economic interest to a benchmark price and releases proceeds in monthly tranches over two years.
The units comprise 14,000,000 common shares priced at $0.25, 2,870,000 warrants exercisable at $0.32 with a three-year maturity, and 11,130,000 additional warrants whose exercise price will be set at a 5% premium to the 20-day volume weighted average price. The additional warrants will be issued in monthly tranches over 24 months. The subscription proceeds have been deposited by Sorbie under an ISDA Credit Support Annex in the form of UK government bonds with a fair market value of at least $3.5 million.
Under a Sharing Agreement and a Securities Escrow Agreement, the common shares have been placed in escrow with Olympia Trust Company. Each month starting 30 days after closing, for 24 equal tranches, subscription proceeds will be released to Angkor, common shares will be released to Sorbie, and additional warrants will be issued to Sorbie. Angkor's economic interest at each monthly settlement is measured against a benchmark price of $0.3144. If the VWAP is below the benchmark, Angkor receives less than 100% of the monthly release amount on a pro-rata basis; if the VWAP is above the benchmark, Angkor receives more than 100%. There is no upper limit on additional proceeds Angkor may receive, but the maximum number of common shares Sorbie can receive each month is fixed.
The implications of this structure are significant. For Angkor, a Canadian public company engaged in mineral and hydrocarbon exploration in Cambodia and other strategic jurisdictions, the deal provides $3.5 million in committed capital while retaining upside exposure to its own share price. If the company's shares trade above the benchmark price at settlement dates, Angkor could receive more than the nominal $3.5 million, providing a potential boost to its treasury. Conversely, if shares trade below the benchmark, Angkor receives less, aligning the investor's return with the company's market performance. The equity blocker prevents Sorbie from exercising warrants if it would own more than 9.99% of issued and outstanding shares, limiting dilution control concerns.
Angkor paid Sorbie a corporate finance fee of $210,000 through 840,000 common shares at $0.25, subject to escrow, and 840,000 warrants exercisable at $0.32 for three years. A finder's fee to an arm's length party includes $175,000 in cash payable monthly over 24 months and 700,000 finder warrants exercisable at $0.32, vesting equally over 24 months with a three-year expiry. The transaction remains subject to final acceptance by the TSX Venture Exchange. Additional details are available through the company's website at resources.com and the original release on www.newmediawire.com.
