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Energizer Resources Announces Closing of Private Placement Financing of US$6,500,000

Posted at 6:16 a.m. on January 1, 2010

Toronto, March 17, 2010 - Energizer Resources Inc., (formerly Uranium Star Corp.)(OTCBB:URST)(FWB:YE5) ("Energizer” or the "Company") announces the closing of a brokered and non-brokered financing consisting of 21,666,667 units issued at U.S. $0.30 per unit ("Unit") for total proceeds of U.S. $6,500,000 (the "Offering").

Dundee Corporation (TSX:DC.A), together with a merchant banking firm and certain other purchasers subscribed for total gross proceeds of U.S. $4,350,000 in the brokered portion of the private placement. Two agents (the "Agents") acted in connection with the brokered private placement pursuant to an agency agreement dated March 15, 2010.

Consolidated Thompson Iron Mines Limited (TSX: CLM) and a private investor subscribed for total gross proceeds of U.S. $2,150,000 in the non-brokered portion of the private placement.

In connection with the strategic investments by Dundee Corporation and Consolidated Thompson, the Company has granted each of them with certain pre-emptive rights to participate in future financings and the right to appoint a nominee to the Company’s board of directors.

Private Placement Details

Each Unit consisted of one common share of the Company (a “Unit Share”) and one common share purchase warrant (a "Warrant"). Each Warrant entitles the holder to purchase one common share (a "Warrant Share") at an exercise price of U.S. $0.50 for a period of three years following the later of March 15, 2010 and the date of listing on the TSX Venture Exchange ("TSX-V"). The expiry of the warrants may be accelerated by the Company if the common shares trade at a price greater than U.S. $0.75 at any time after 9 months from the date hereof for a period of 21 consecutive days on the OTC Bulletin Board ("OTCBB") or the TSX-V and the Company has filed and had declared effective, the Registration Statement (as defined below).

The Units were issued together with listing and filing rights, which rights may be converted into an escalating number of common shares if the Company does not complete its TSX-V Listing or file a resale registration statement for the securities issued in connection with this transaction (the “Registration Statement”) by certain specific dates. A maximum of 17,333,333 Common Shares may be issued pursuant to such rights.

In the event that the common shares of the Company have not commenced trading on the TSX-V on or before June 15, 2010, each holder of a Unit Share shall be entitled to be issued one-tenth of one common share of the Company (each whole share a “Listing Rights Share”) starting on June 15, 2010 and an additional one-tenth of Listing Rights Share on every six month anniversary thereafter in which the Company fails to complete the TSX-V Listing until June 15, 2012 such that the maximum number of Listing Rights Shares which may be issued pursuant to such rights is equal to 50% of the Unit Shares issued under the Offering.

In the event that the Registration Statement has not been declared effective on or before December 15, 2010, each holder of a Unit Share shall be entitled to be issued one-tenth of one common share of the Company (each whole share a “Filing Rights Share”) starting on December 15, 2010 and an additional one-tenth of one Filing Rights Share on every six month anniversary thereafter in which the Company fails to have the Registration Statement declared effective until December 15, 2011 such that the maximum number of Filing Rights Shares which may be issued pursuant to such rights is equal to 30% of the Unit Shares issued under the Offering.

The Company anticipates that the TSX-V conditional listing requirements will be satisfied by March 29, 2010 and the Company expects that its common shares will be listed for trading on the TSX-V by no later than April 30, 2010.

As consideration for their services in connection with the brokered private placement, the Agents were (i) paid a cash commission of 6% of the gross proceeds of the brokered portion of the financing, (ii) issued 870,000 class A broker warrants, and (iii) issued 870,000 class B broker warrants. Each class A broker warrant entitles the holder to acquire one common share of the Company at an exercise price of U.S. $0.30 until March 15, 2012. Each class B broker warrant entitles the holder to acquire one common share of the Company at an exercise price of U.S. $0.50 for a period of three years following the later of March 15, 2010 and the date of the Company’s listing on the TSX-V. One of the Agents was also issued 400,000 common shares and 400,000 compensation warrants, each exercisable for one common share at a price of U.S. $0.30 until March 15, 2013.

The securities to be issued in connection with the Offering will be subject to hold periods pursuant to applicable U.S. securities laws and are subject to final regulatory approval.

All securities issued in connection with the Offering will also be subject to a hold period in Canada until July 16, 2010.

 

Use of Funds

The net proceeds of this financing will be used to further the Company’s 2010 exploration program on its Green Giant vanadium project in Madagascar, including completion of a resource definition drill program, metallurgical testing, and for general corporate purposes.

Contact:
Brent Nykoliation, Vice President of Business Development
Energizer Resources Inc.
Toll Free: 800.818.5442 or 416.364.4911
Email:  bnykoliation@energizerresources.com
or
Julie Lee Harrs, President and COO

 

Cautionary Statement and Forward Looking Statements: Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. All statements in this news release, other than statements of historical facts, that address future exploration activities and events or developments, including the TSX-Venture Exchange listing and the anticipated use of proceeds that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include metal prices, exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Accordingly, readers should not place undue reliance on forward-looking statements.


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