CGX yesterday announced a US$2.9M non-brokered private placement following an agreement with Sprott Asset management. The money is to be realised from the sale of 4.1 M units at a price of US$0.73.
CGX and its local subsidiary On-Energy are exploring for oil reserves in the Berbice area.
A release from the CGX Toronto office issued Friday said Sprott Asset Manage-ment had purchased the units on behalf of various funds that it manages. It said the closing would take place on receipt of regulatory approval. Once approval is received, CGX's issued capital will consist of 62,715,595 common shares and 74,293,663 common shares on a fully diluted basis.
The release explained that each unit will consist of one common share and one-half common share purchase warrant.
Also it said, "each common purchase share warrant will be exercisable into one common share at a price of US$1.10 for a period of eighteen months from the date of the closing of the financing."
On Tuesday, CGX and its Guyana subsidiary ON Energy announced the commencement of the 2-D onshore seismic survey and hope to have preliminary interpretation by the summer.
Kerry Sully, CGX's President and Chief Executive Officer is quoted in the release as saying that the company has begun the logistics for an onshore drilling programme that could commence by this fall.
He said that the financing being realised through the private placement "will ensure that we can continue this accelerated pace of exploration,"
GCX has already raised locally through a public offering US$542,000 when around 20 investors took a 14 per cent stake in ON Energy. In a release earlier this week, CGX says that the seismic programme will be providing employment for 150 people, 80 of whom would be hired directly by its sub-contractors and the rest through support services.