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SMG Indium Resources Ltd. Announces $7.5 Million Private Placement

Stocks in this article: SMGI SMGIU

NEW YORK, Jan. 5, 2012 /PRNewswire/ -- SMG Indium Resources Ltd. (the "Company") (OTCBB: SMGI, SMGIW, SMGIU), announced today that it has entered into a definitive purchase agreement to sell $7.5 million of its common stock in a private placement offering to entities affiliated with Raging Capital Management LLC. Pursuant to this agreement, the Company will issue 2,000,000 shares of common stock at $3.75 per share. The Company expects to use 85% of the gross proceeds to purchase and stockpile the metal indium and 15% for general corporate purposes.

"We are pleased that our largest shareholder, Raging Capital Management LLC, continues to believe in our corporate vision and has decided to increase its investment in our Company. We have agreed to issue common stock at a 10% premium to the closing bid price and essentially at parity to our Net Market Value ("NMV") which was last reported on our website on December 31, 2011 at $3.76* per share. With the proceeds, we will continue to expand our strategic stockpile of indium," said Alan C. Benjamin, chief executive officer of SMG Indium Resources Ltd.

"We believe the supply/demand fundamentals of the indium market are very compelling, and we are excited to be shareholders in what we believe is the world's largest strategic stockpile of the metal. Further, the Company has successfully acquired an additional 25 metric tons of indium since the initial public offering," said William C. Martin, Chairman and Chief Investment Officer of Raging Capital Management, LLC.

Indium Market Update

Indium is strongly linked to the burgeoning digital economy. Indium in the form of indium tin oxide ("ITO") creates the optically transparent electrodes that drive LCD displays on TVs, computer monitors, laptops, tablets, smartphones and touchscreens. The demand for LCD glass has continued to grow even during the recession. Additionally, the unique chemical properties of indium compounds make them essential to fabricating products in some of the most exciting emerging technologies, including Light Emitting Diodes ("LEDs"), high speed semiconductors in the form of indium-gallium-arsenide ("InGaAs") and indium phosphide ("InP") as well as the next generation of thin-film solar panels known as CIGS ("Copper-Indium-Gallium-diSelenide"). 

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