Bought Deal Financing

27 Feb 2006 12:40

European Minerals Corporation27 February 2006 Not for Distribution to U.S. Newswire Services or for Dissemination in theUnited States EUROPEAN MINERALS CORPORATION ANNOUNCES BOUGHT DEAL FINANCING London, UK, February 27, 2006 - European Minerals Corporation ("EMC") (TSX: EPM,AIM: EUM) is pleased to announce that it has entered into an agreement with asyndicate led by Canaccord Adams Limited. ("Canaccord Adams") and includingPacific International Securities Inc. (the "Underwriters"), pursuant to whichCanaccord Adams has agreed to purchase for resale to the public, on a boughtdeal basis, an aggregate of 55,000,000 units (the "Units") of EMC at a price ofC$1.05 (or £0.53) per Unit (the "Issue Price"), resulting in gross proceeds ofapproximately C$57.7 million (approximately US$50.0 million or £29.2 million).Each Unit will consist of one Common Share and one-half of one Common Sharepurchase warrant. Each whole warrant is exercisable at a price of C$1.55 (percommon share for five years from the closing of the offering. The terms of theoffering provide for an option (the "Underwriter's Option") pursuant to whichthe Underwriters may purchase up to an additional 12,000,000 Units at the IssuePrice, which if fully exercised would result in additional gross proceeds ofapproximately C$12.5 (approximately US$10.8 million or £6.4 million). Inaddition, Canaccord will be entitled to a greenshoe option to purchase up to 15%of the Units offered in the bought deal including the underwriters option (up to10,050,000 Units), at the Offering Price (the "Greenshoe"). The greenshoe optionwill be exercisable in whole or in part, at the sole discretion of Canaccord,for a period of 45 days from the closing of the offering. If the Underwriter'sOption and the Greenshoe are fully exercised, the gross proceeds raised pursuantto the offering, including the Underwriter's Option and the Greenshoe, will beapproximately C$81.0 million (approximately US$70.0 million or £40.8 million) inaggregate. The offering is subject to certain conditions including normal regulatoryapprovals. The Units will be offered in the provinces of Alberta, BritishColumbia, and Ontario by way of a Short Form Prospectus and on a privateplacement basis in the United Kingdom and Europe, and to accredited investors inthe United States under Rule 144A. Closing is anticipated to occur on or aboutMarch 21, 2006. EMC intends to use the proceeds of the offering for the construction of theVarvarinskoye gold deposit in north-central Kazakhstan, and for general workingcapital. EMC is listed on the TSX, trading under the symbol EPM, and on AIM, tradingunder the symbol EUM. On behalf of the Board of Directors, "Anthony J. Williams"Chairman For further information, please contact: EuropeBert KennedyPresident & CEOTel: +44 (0) 20 7529 7508 North AmericaKeith SchaeferVanguard Shareholder Solutions Inc.Tel: +1 866 448 0780Email: ir@vanguardsolutions.ca This news release shall not constitute an offer to sell or the solicitation ofan offer to buy the securities in any jurisdiction. The common shares will notbe and have not been registered under the United States Securities Act of 1933,as amended, and may not be offered or sold in the United States absentregistration or an applicable exemption from the registration requirements.The Toronto Stock Exchange has not reviewed and does not accept responsibilityfor the adequacy or accuracy of this release. The foregoing information maycontain forward-looking statements relating to the future performance ofEuropean Minerals Corporation. Forward-looking statements, specifically thoseconcerning future performance, are subject to certain risks and uncertainties,and actual results may differ materially. These risks and uncertainties aredetailed from time to time in the Company's filings with the appropriatesecurities commissions. END The Toronto Stock Exchange has not reviewed and does not accept responsibilityfor the adequacy or accuracy of this release. This information is provided by RNS The company news service from the London Stock Exchange