Forest Gate Energy Inc.
Symbol & Exchange: FGE-V
Forest Gate Announces Closing Of $600,000 Private Placement With Mineralfields
Montreal, Québec, October 28, 2010 – Forest Gate Energy Inc. reports that it has completed a non-brokered private placement by issuing an aggregate of 6,111,110 flow-through units at a price of $0.09 per unit and 625,000 hard dollar units at a price of $0.08 per unit to three limited partnerships associated with the MineralFields Group of Toronto, Ontario, for gross proceeds to Forest Gate of $600,000.
Each flow-through unit consists of one flow-through common share and one non-flow-through common share purchase warrant. Each warrant will entitle the holder to purchase one additional common share of Forest Gate at a price of $0.20 until October 27, 2012. The hard dollar unit consists of one common share and one common share purchase warrant. Each warrant will entitle the holder to purchase one additional common share of Forest Gate at a price of $0.15 until October 27, 2012.
As previously disclosed in Forest Gate’s September 2, 2010 news release, the Pershing Gold Property was drilled in 1996, intersecting 15.54 grams of gold per ton over 1.50 metres, 11.59 grams of gold per ton over 1.66 metres, and 19.23 grams of gold per ton over 1.33 metres in the banded iron formation. (Source: MRB & Assoc., Val D’Or, 2003). Forest Gate has a 100% interest in the Pershing Gold Property
During the 2000 to 2003 period, a well-developed hydrothermal alteration zone was partially mapped in drill core. The basal portions of the iron formation at the distal margin to the alteration zone have developed strongly silicified amphibole-biotite-garnet intervals containing disseminated to massive lenses of chlorite-pyrrhotite that consistently contain gold values ranging from 1 to 8.7 gpt over 0.3 to 3.0 m sampling intervals. Several narrow quartz-tourmaline veins (<1m) carrying gold, the highest value noted over the vein interval being 49.04 grams gold per ton, have also been observed in the unaltered units overlying the hydrothermally altered iron formation. (source: MRB)
“We are very pleased to be working with the MineralFields Group to develop our recently-acquired Pershing Gold Property” said Michael Judson, Forest Gate’s President and Chief Executive Officer.
Forest Gate will use the proceeds from the issuance of the flow-through units to explore its 100% owned Pershing Gold Property located near Val-d'Or, Québec and will use the balance of the net proceeds of the private placement for working capital and general corporate purposes.
As a result of the private placement, there are 46,186,035 common shares of Forest Gate issued and outstanding.
In connection with the closing of the private placement, Forest Gate paid a cash finder’s fee to Limited Market Dealer Inc. of $30,000, representing 5% of the gross proceeds raised in the private placement. Forest Gate also issued compensation options to Limited Market Dealer Inc. to purchase up to 611,111 units and up to 62,500 hard dollar units of Forest Gate, representing 10 % of the number of “flow-through” units and hard dollar units, respectively, sold in the private placement. The compensation options are exercisable at a price of $0.09 per unit and at a price of $0.08 per hard dollar unit, until October 27, 2012. The units to be issued under the compensation options will have the same terms as the respective units issued in the private placement, except that none of the shares will be flow-through shares.
Under applicable securities legislation and policies of the TSX Venture Exchange, the securities issued in the private placement are subject to a hold period expiring on February 28, 2011.
The technical content of this news release has been approved by Edward Procyshyn, Mineral Geologist, Forest Gate Energy Inc., a Qualified Person as defined in National Instrument 43-101 – Standard of Disclosure for Mineral Projects.
About Forest Gate Energy
Forest Gate Energy Inc. is a publicly listed oil and gas exploration and production, and non-energy resource company trading on the TSX Venture Exchange under the symbol FGE. The Company is seeking to increase shareholder value through participation and development of energy and other resources in Canada and internationally.
For more information please contact:
Robert Kramberger,
V-P, Investor Relations
1-866-666-3040
rkramberger@forestgate.ca
www.forestgate.ca
FORWARD-LOOKING STATEMENTS
Certain statements regarding Forest Gate, including management's assessments of future plans and operations and Forest Gate's anticipated financial performance, may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties, most of which are beyond Forest Gate's control. These risks may cause actual financial and operating results, performance, levels of activity and achievements to differ materially from those expressed in, or implied by, such forward-looking statements.
Such factors include, but are not limited to: the impact of general economic conditions in Canada and the United States; industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced; competition; the lack of availability of qualified personnel; fluctuations in commodity prices; the results of exploration and development drilling and related activities; imprecision in reserve estimates; the production and growth potential of Forest Gate's various assets; fluctuations in foreign exchange or interest rates; the ability to access sufficient capital from internal and external sources; and obtaining required approvals of regulatory authorities.
Neither TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this release.
