M&A

10 November, 2009

UPDATE 1-Sprott Resource unit drops financing price

* Original offering could not be completed

* Part of the Wintraysan-Orion consolidation process

TORONTO, Nov 10 (Reuters) - Canadian investment firm Sprott Resource Corp (SCP.TO) said on Tuesday its wholly owned unit Orion Oil & Gas Ltd has been forced to drop the price of recently announced financing.

Under the original arrangement, Orion was to raise C$100 million from the sale of subscription receipts to finance its consolidation with Wintraysan Capital Corp (WTSp.V).

Each receipt was priced at C$5 and was to be exchanged for one common share of the New Orion entity after the reverse takeover by Wintraysan.

However, the agents of the agreement said they were unable to complete the offering under those terms, so Sprott has agreed to drop the price to C$4 per subscription receipt.

Under the new agreement, each receipt will entitle the holder to one New Orion share and half of a New Orion share purchase warrant exercisable for $5 for a period of two years following the closing of the offering.

If the agents -- a syndicate led by Cormark Securities, FirstEnergy Capital Corp and TD Securities Ltd -- cannot complete the offering, Orion will remain a private company, 79.3 percent-owned by Sprott, and Sprott will revert to its original plan of advancing Orion as a private company.

Sprott invests in the natural resources sector. ($1=$1.06 Canadian) (Reporting by Andrea Hopkins)

Source: http://www.reuters.com