VANCOUVER, Oct. 20, 2016 - Eureka Resources Inc. ("Eureka" or the "Company") (TSXV: EUK) announced today that it has closed the first tranche of its non-brokered $350,000 private placement of 3,500,000 units (the "Units") at $0.10 per Unit (the "Offering"). Each Unit will consist of one common share (a "Share") and one half of one common share purchase warrant (each whole warrant a "Warrant"). Each Warrant will entitle the holder to purchase one common share at $0.15 for a period expiring 24 months following the closing date of the Offering.
Eureka placed 1,325,000 Units in the first tranche of the Offering for gross proceeds of $132,500. In connection with closing the first tranche of the Offering, the Company paid finder's fees of 6% cash totaling $4,200 and issued 42,000 finder's warrants (each a "Finder's Warrant") representing 6% of the Units placed by the finders. Each Finder's Warrant will entitle the holder thereof to purchase a Unit in Eureka at $0.10 per Unit, exercisable for 24 months following issuance.
All share purchase warrants issued under the Offering, including those issued as finder's fees, will be subject to an acceleration clause which will cause the warrants, if unexercised, to expire on the date which is 30 days after the date that the volume weighted average trading price of the Company's common shares on the TSX Venture Exchange exceeds $0.35 per share over a period of 10 consecutive trading days.
All securities issued in the Offering will be subject to a four‐month hold period, during which time the securities may not be traded. For securities issued in the first tranche of the Offering, the hold period will expire on February 21, 2017. The securities described herein have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States unless registered under the Act or unless an exemption from registration is available. The Offering is subject to regulatory approval.
Proceeds from the Offering will be used for exploration on the Company's Gemini property located in the western Lida Valley, Nevada, USA. Gemini is located in Esmeralda County in south central Nevada, approximately 40 kilometres (26 miles) from North America's only producing lithium mine at Silver Peak, and for working capital. The exploration program has a budget estimated at approximately US$400,000, Eureka's share being 50% or US$200,000.
The Company anticipates closing the balance of the $350,000 private placement next week.
