Stonegate Agricom Announces Private Placement Financing with Existing Shareholders

/NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE OR FOR DISSEMINATION IN THE UNITED STATES/

TORONTO, Feb. 27, 2015 /CNW/ - Stonegate Agricom Ltd. ("Stonegate" or the "Company") (TSX: ST, ST.WT.A) today announced a proposed private placement equity financing (the "Offering") that will be open to participation by existing shareholders in proportion to their ownership holdings as of the record date of February 26, 2015 (the "Record Date").

The Offering consists of the sale of a minimum 100,000,000 units (the "Units") and a maximum 145,680,000 Units of the Company at a price of $0.015 per Unit, for gross proceeds of between $1,500,000 and $2,185,200.

Each Unit consists of one common share (a "Unit Share") of the Company and a third of a common share purchase warrant (a "Warrant"). Each whole Warrant will entitle the holder to acquire one common share (a "Warrant Share") of the Company at an exercise price of $0.02 per Warrant Share for a period of 24 months following the Closing Date (as defined below). The Company currently has 194,242,704 common shares outstanding.

The Company intends to use the net proceeds raised in the Offering as follows: (1) if the minimum gross proceeds are raised, approximately US$500,000 will be used to conduct additional groundwater flow testing  required for permitting the Paris Hills Phosphate Project in Idaho, USA, approximately US$450,000 will be used to cover property payments and overhead at the project, and the remainder will be used for general corporate purposes; (2) if the maximum gross proceeds are raised, the Company intends to also initiate a feasibility study on the Upper Zone at the project.

Shareholders interested in participating in the Offering should contact, or have their registered broker contact, Wayne Cheveldayoff, Vice President Investor Relations, Stonegate Agricom Ltd. at [email protected] or [phone] to obtain a copy of the subscription agreement. A subscription fee of 6% will be payable to brokers representing participating shareholders, other than insiders. All subscription forms must be received by Stonegate by the deadline of 4:00 p.m. Eastern on Monday, March 16, 2015.

In the subscription agreement, shareholders will be required to certify the number of common shares of the Company held as of the Record Date and the total number of Units they wish to subscribe for at the specified price of $0.015 per Unit. Each existing shareholder on the Record Date will be entitled to purchase that number of Units equal to at least their pro rata share based on the common shares owned on the Record Date, subject to a $150 minimum subscription. Any additional available Units will be allocated by the Company based on subscriptions received and Units available.

Any Units purchased under this Offering will be subject to a four-month minimum hold period from the Closing Date.

The Offering is being completed under the recently adopted Ontario Securities Commission Rule 45-501 Ontario Prospectus and Registration Exemptions and, in other jurisdictions, under other applicable exemptions without issuing a prospectus.  The exemption limits a shareholder to a maximum investment of $15,000 in such a transaction unless the shareholder certifies in the subscription agreement that he or she has obtained advice regarding the suitability of the investment from a person registered as an investment dealer or otherwise qualifies to rely on another private placement exemption.

The Offering is subject to the acceptance of the Toronto Stock Exchange and is also subject to shareholder approval, which is expected to be obtained as a result of a shareholder vote at the Company's annual and special meeting expected to be held on April 24, 2015. The closing of the transaction will occur immediately after shareholder approval is obtained (the "Closing Date").

Ian McDonald, Co-Founder, Co-Chairman and Acting Chief Executive of Stonegate, has advised that he intends to subscribe for up to $500,000 of the Units, subject to Unit availability.  Sprott Resource Corp. (TSX: SCP), which currently owns 36.5% of Stonegate's shares, has informed the Company it will not participate in the Offering but that it will vote in favour of the Offering.

Stonegate acquired the Paris Hills property in 2009 and carried out exploration drilling and engineering work and subsequently completed a positive feasibility study for an underground phosphate mine in December 2012. The Company commenced permitting activities in September 2012 and initially had expected to apply for and receive all required permits for construction and production by the end of 2014. However, while most of the permitting work had been successfully completed, the final groundwater model and report and related permit applications were delayed by uncertainties concerning the estimates of expected groundwater flow rates into the planned underground mining area. The groundwater flow testing had been conducted according to recommendations made by third-party consultants. However, upon further evaluation, the Company determined that additional groundwater flow tests are required prior to the completion of the groundwater model and report.

Stonegate announced on January 26, 2015 that permitting activities had been temporarily suspended at its Paris Hills Phosphate Project due to financial constraints and the Company would need to raise additional funds.

If the Offering is completed as planned, the water flow testing is expected to be conducted in Q2 2015 and a final groundwater model and report are expected to be completed in Q3 2015, following which the Company expects to submit final permitting applications to state regulators.

The securities offered have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any securities laws of any state of the United States, and may not be offered or sold directly or indirectly in the United States or to, or for the account or benefit of, a "U.S. Person" (as defined in Regulation S under the U.S. Securities Act) absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable securities laws of any state of the United States. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States or to, or for the account or benefit of, a "U.S. Person," nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Stonegate Agricom Ltd.

Stonegate Agricom, which is actively engaged in acquiring and developing agricultural nutrient projects, is currently focused on the development of the potentially world-class, long-life Paris Hills Phosphate Project located in Idaho. The Company is confident that the deposit has sufficient size and grade to become a strategic, cost-effective source of phosphate supply for major fertilizer producers. More information is available at www.stonegateagricom.com.

Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable law, which may include statements herein relating to the potential requirement for additional testing and engineering work. Generally, forward-looking statements and forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". All forward-looking statements and forward-looking information are based on reasonable assumptions that have been made by the Company as at the date of such information. Forward-looking statements and forward-looking information are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements and forward-looking information, including but not limited to: risks relating to assumptions used in preparation of the Feasibility Study on the Lower Phosphate Zone of the Paris Hills Phosphate Project including government regulation, phosphate prices, labour costs and capital costs, and project risks including project location, permitting requirements, project delays, ground control and dilution and water management; the results of additional water testing; the general risks associated with the speculative nature of the Company's business, commodity prices, current global financial conditions, uncertainty as to the successful completion of this private placement financing, use of proceeds, ability to raise the minimum gross proceeds, uncertainty of additional capital, price volatility, the Paris Hills Phosphate Project being a development-stage project, limited operating history, no history of earnings, government regulation in the mining industry, environmental risks and hazards, impending climate change legislation, required approvals and permits, foreign subsidiaries, risks relating to receiving applicable permits for construction and production, ability to conduct additional water flow tests, completion of the groundwater model and report, risks relating to the retention of the Paris Hills project, expiration of leases and permits for the Paris Hills Project, title to mineral properties, obtaining mineral concessions and surface rights, community relations and project support, water rights, exploration, development and operating risks, uncertainty in the estimation of mineral reserves and resources, uncertainty of inferred mineral resources, mineral exploration, reliability of historical exploration work, risks associated with having a controlling shareholder, dilution to the common shares, dependence on key personnel, currency fluctuations, insurance and uninsured risks, competition, legal proceedings, conflicts of interest and lack of dividends as well as those factors discussed in the section entitled "Risk Factors" in the Company's most recently filed annual information form available at www.sedar.com.  Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements and forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended.  There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information.  Accordingly, readers should not place undue reliance on forward-looking statements or forward-looking information.  The forward-looking statements and forward-looking information contained in this press release are included for the purpose of providing investors with information to assist them in understanding the Company's expected financial and operational performance and may not be appropriate for other purposes.  Stonegate does not undertake to update any forward-looking statement or forward-looking information that is included herein, except in accordance with applicable securities laws.

SOURCE Stonegate Agricom Ltd

Wayne Cheveldayoff, Vice President, Investor Relations, Stonegate Agricom Ltd., Tel: [phone] or [email protected]