Carlyle closes $2.85-million first tranche of placement

Executive Summary

• Carlyle Commodities Corp. has closed the first tranche of its previously announced non-brokered private placement, raising gross proceeds of $2,855,000.
• The financing is conducted in connection with Carlyle's proposed business combination with Silver Pony Resources Corp., which includes a 20-for-1 share consolidation.
• The company anticipates closing the balance of the private placement in the following week, with net proceeds held in escrow until the transaction closes.

Key Details

• Transaction Structure: Non-brokered private placement closed in Tranche 1.
• Gross Proceeds: $2,855,000.
• Securities Issued: 285.5 million subscription receipts.
• Price: One cent (1¢) per subscription receipt (equivalent to 20¢ on a post-consolidation basis).
• Share Consolidation: 20 pre-consolidation shares for one post-consolidation share.
• Conversion Terms: Subscription receipts automatically convert into one unit of Carlyle (one common share + one-half of one common share purchase warrant) upon satisfaction or waiver of all closing conditions for the transaction.
• Warrant Terms:
  • Each unit contains one-half of one warrant.
  • Exercise Price: 1.5 cents (30¢ post-consolidation) per warrant share.
  • Term: 18 months following the date the escrow release condition is satisfied.
  • Acceleration Clause: If the share price equals or exceeds 2.5 cents (50¢ post-consolidation) for five consecutive trading days, Carlyle may accelerate expiry by issuing a news release; warrants would then expire 30 calendar days after that release.
• Use of Proceeds: Net proceeds held in escrow pending the escrow release condition. Upon closing, funds will be used for exploration work on Silver Pony Resources' Trout Lake projects and general working capital.
• Escrow Conditions: If the escrow release condition is not satisfied or waived within 180 days of the private placement closing date, net proceeds will be returned to subscribers.
• Finder’s Fees:
  • Cash Commission: $128,000 paid to eligible finders.
  • Warrants Issued: 12.8 million finders' warrants.
  • Finder’s Warrant Terms: Exercisable into one unit at 1¢ per unit (18-month term). Each finder's unit consists of one share and one-half of one warrant. Each full finder's unit warrant is exercisable into one share at 1.5¢ per share (18-month term).
• Hold Period: All securities issued are subject to a statutory hold period of four months and one day from the date of issuance.

Notable Quotes

• "We are pleased to have successfully completed this initial tranche of our financing in support of the proposed transaction with Silver Pony," commented Morgan Good, president and chief executive officer of Carlyle. "This funding begins to provide us with the resources in order to rapidly advance the Trout Lake projects, subject to closing of the transaction, and well positions the company to move forward with a focused exploration program and an enhanced treasury."