MONTREAL, March 02, 2012 – Geomega Resources Inc. (TSX.V: GMA) (“GéoMégA” or the “Company”) has entered into an agreement with Industrial Alliance Securities Inc. to proceed, together with National Bank Financial Inc. (collectively, the « Agents »), for a brokered private placement on a « best efforts » basis for aggregate gross proceeds of up to $5 million (the « Offering »).
The Offering consists of the issuance of a maximum 2,857,143 units (the « Units ») at a price of $0.70 per Unit and 3,000,000 flow-through shares at a price of $1.00 per flow-through share.
Each Unit will consist of one common share at a price of $0.70 and one-half of one common share purchase warrant (each whole warrant, a « Warrant »). Each Warrant shall entitle its holder thereof to subscribe for one additional common share at a price of $1.25 for a period of eighteen (18) months following the closing of the Offering.
The net proceeds from the Offering will be used to fund the development of Montviel through the Preliminary Economic Assessment, exploration on the Company’s graphite properties and for working capital purposes.
At the closing of the Offering, the Agents will receive a cash commission equal to 6.5% of the gross proceeds raised under the Offering. In addition, the Agents shall receive non-transferable broker warrants at an exercise price of $0.70 per share exercisable for a period of eighteen (18) months from the date of closing to acquire such number of common shares of the Company that is equal to 4% of the aggregate number of units and flow-through shares issued under the Offering.
The Offering is scheduled to close on or about March 23, 2012 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange. All securities issued pursuant to the Offering will be subject to a four month and one day hold period from the date of closing of the Offering.
This press release is not an offer or a solicitation of an offer of securities for sale in the United States. The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.
About the Montviel Rare Earths/Niobium Project
The Montviel Rare Earths/Niobium Project is located approximately 45 km west of the Cree First Nation of Waswanipi and 100 km north of Lebel-sur-Quévillion in the southern, developed, part of Quebec’s « Plan Nord » (49th parallel). The Plan Nord is an $80 billion economic, social and environmental development plan of Northern Quebec over a period of 25 years. Montviel’s initial NI 43-101 compliant resource calculation at a base cut-off grade of 1% total rare earths oxides (TREO), released on September 29, 2011, totalled 183.9 Mt averaging 1.45% TREO in the Indicated resources category and 66.7 Mt averaging 1.46% TREO in the Inferred resources category. Montviel, the 4th largest TREO resource outside China, has the potential for a significant near term role in the growing magnet sector due to its proximity to infrastructure and available labour.
About GéoMégA (ressourcesgeomega.ca)
GéoMégA, which owns 100% of the Montviel Rare Earths/Niobium project, is a Québec mineral exploration company focused on finding economically viable deposits of Minor Metals in Québec. GéoMégA is committed to meeting Canadian mining industry standards and distinguishing itself with its expertise, know-how and its support and respect for local communities and the environment.
29,274,113 common shares of GéoMégA are currently issued and outstanding.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
/s/ « Simon Britt »
Chief Executive Officer
For more information contact:
President and CEO
Cautions Regarding Forward-Looking Statements
This news release contains forward-looking statements regarding our intentions and plans. The forward-looking statements that are contained in this news release are based on various assumptions and estimates by the Company and involve a number of risks and uncertainties. As a consequence, actual results may differ materially from results forecast or suggested in these forward-looking statements and readers should not place undue reliance on forward-looking statements. We caution you that such forward-looking statements involve known and unknown risks and uncertainties, as discussed in the Company’s filings with Canadian securities agencies. Various factors may prevent or delay our plans, including but not limited to, contractor availability and performance, weather, access, mineral prices, success and failure of the exploration and development carried out at various stages of the program, and general business, economic, competitive, political and social conditions. The Company expressly disclaims any obligation to update any forward- looking statements, except as required by applicable securities laws.