Ontex Resources closes $5-million financing

2009-08-24 17:32 ET - News Release

Mr. Patrick Sheridan reports

ONTEX RESOURCES LIMITED COMPLETES PRIVATE PLACEMENT

Ontex Resources Ltd. completed today its previously announced non-brokered private placement for gross proceeds of $5-million, through the sale of 12.5 million flow-through (FT) common shares of the company at a price of 20 cents per FT share and 12.5 million non-flow-through (NFT) units of the company at a price of 20 cents per unit. Each unit comprised one common share and one common share purchase warrant. Each warrant is exercisable for one common share at a price of 35 cents per warrant for a period of 18 months.

Gross proceeds from the sale of the FT shares will be used for further exploration of the company's properties and the proceeds from the sale of the units will be used for general working capital purposes.

"We are pleased to have completed this financing with a broad range of significant support from institutional and retail investors," said J. Patrick Sheridan Jr., the company's president and chief executive officer. "The company continues to aggressively explore the Brookbank deposit and currently has two drills operating. In addition, a stripping and trenching program has been completed on an area east of the Brookbank gold property, which, up until this point, has been unrecognized as a potential exploration target. An initial drill program is being designed for this area. The company will continue to explore areas of known mineralization, as well as areas outside of known gold resources."

Insiders of the Ontex purchased approximately 4.9 per cent of the private placement. The company issued 500,000 finder's warrants to Primary Capital Inc. in connection with the private placement. Each finder's warrant is exercisable for one unit at a price of 20 cents per finder's warrant. In addition, the company paid a cash finder's fee of $150,000 to Primary and $3,100 to Octagon Capital Corp.

The securities issued in connection with the private placement are subject to a hold period which expires on Dec. 25, 2009.