Private placement to raise US$5 million for Seine River

A private placement with K.B. Resources is expected to inject US$5 million into Seine River Resources (VSE).

K.B. Resources, a private firm owned by Seine directors Bernard Brynelsen and Mervin Davis, will purchase five million common shares of Seine River at $1.25 per share. The placement includes 2.5 million warrants exercisable at US$3 per share and 2.5 million warrants exercisable at US$5 per share, both good for a period of two years from the completion of the placement. Shareholder and regulatory approval for the issue is required. Paul Manson, spokesman for the company, said an extraordinary meeting to vote on the placement will not be called but that shareholders will be solicited privately for 51% approval of the plan.

Proceeds from the placement will be applied to several of the company’s projects with immediate attention to the Plumas Gold Mine property in northern California.

Seine holds a 100% interest in the property, an underground placer gold deposit.

Manson said the company should be able to complete permitting for the operation within one month of closing the placement and be in operation within four months.

Estimates of the project’s capital cost, gold output, reserves, and operating costs have not been released.

The placement will also allow Seine to review a number of opportunities to participate in major mining and petroleum developments in Latin America. Seine has shifted its focus from the Lincoln gold project in California, allowing its interest to be diluted by its partner U.S. Energy (NASDAQ). U.S. Energy is in the process of permitting the project for up to a 1,000-ton-per-day operation and Seine’s interest now sits at about 10%. Prior to completion of the private placement, Seine has about 8.4 million shares outstanding.