Pure Gold Mining Inc. (Pure Gold) has closed its bought deal private placement (the Offering) and concurrent non-brokered private placement (the Non-Brokered Private Placement and together with the Offering, the transactions) announced on 21 June 2019 and 15 July 2019, respectively.
“We are thrilled to have these significant equity transactions closed, which have brought in CAN$47.5 million in gross proceeds. This new capital gives us the financial flexibility to continue development work, and pursue an aggressive exploration program with the goal of resource expansion,” said Darin Labrenz, President and CEO of Pure Gold.
“As the highest grade development project in Canada, Madsen joins part of a small, elite group of high-grade mining projects located in ideal jurisdictions.
We are also delighted to welcome Eric Sprott to the share registry as a 10% shareholder. Sprott is now the seond largest shareholder of Pure Gold behind AngloGold Ashanti and joins key strategic shareholders including Rob McEwen and Newmont Goldcorp, which collectively hold more than 30% of the float. I would like to thank existing shareholders who continue to support the company’s strategy, and welcome new shareholders, including Eric Sprott and a widened following out of the UK, who have decided to invest in the Pure Gold story at this exciting time in our development. With the completion of the equity Transactions we have no need for additional equity as we continue to develop our project into a rising gold market.”
Pursuant to the Offering, the company issued a total of 62 714 000 units of the company (the units), at a price of CAN$0.55 per unit, for aggregate gross proceeds of CAN$34 492 700.
Each unit consists of one common share of the company (a Unit Share) and one-half of one common share purchase warrant (each whole common share purchase warrant, a Warrant). Each Warrant is transferrable and entitles the holder to acquire one common share of the company until 18 July 2022, at a price of CAN$0.85.
The Offering was completed through a syndicate of underwriters led by Sprott Capital Partners and which included Velocity Trade Capital Ltd. (together, the Underwriters). Peel Hunt LLP and Tamesis Partners LLP acted as part of a special selling group in connection with the United Kingdom portion of the Offering. In consideration for their services, the Underwriters received an aggregate cash commission equal to 6.0% of the gross proceeds of the Offering.
Pursuant to the Offering, Eric Sprott, through 2176423 Ontario Ltd., a corporation which is beneficially owned by him, acquired a total of 36 million units for total consideration of CAN$19.8 million. Following completion of the transactions, Sprott beneficially owns and controls 36 million unit shares and 18 million Warrants, representing approximately 10.2% of the issued and outstanding common shares of the company on a non-diluted basis, and 14.5% of the issued and outstanding common shares on a partially diluted basis, assuming the exercise of the Warrants acquired hereunder and forming part of the units. Prior to the transactions, Sprott did not beneficially own or control any securities of the company.
The units were acquired by Sprott for investment purposes and with a long-term view of the investment. Sprott may acquire additional securities of the company including on the open market or through private acquisitions or sell securities of the company including on the open market or through private dispositions in the future, depending on market conditions, reformulation of plans and/or other relevant factors.
A copy of 2176423 Ontario Ltd.’s early warning report will appear on the Company's profile on SEDAR and may also be obtained by calling (416) 362-7172 (200 Bay Street, Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J1).
Pursuant to the Non-Brokered Private Placement, the company issued a total of 23.7 million units, at a price of CAN$0.55 per unit, for aggregate gross proceeds of CAN$13 035 000. AngloGold Ashanti Ltd (AngloGold) purchased 11.85 million units issued pursuant to the Non-Brokered Private Placement (the “AngloGold Private Placement”), bringing AngloGold’s ownership percentage in the company to 14.1% of the issued and outstanding common shares on a non-diluted basis upon completion of the Transactions. A subscription fee of 6.0% was paid on one-half of the gross proceeds of the Non-Brokered Private Placement.
Due to its share ownership, AngloGold is considered a ‘related party’ of Pure Gold and, accordingly, the AngloGold Private Placement constitutes a 'related party transaction' within the meaning of Multilateral Instrument 61-101 ('MI 61-101'). The AngloGold private placement was exempt from the minority approval requirement of Section 5.6 and the formal valuation requirement of Section 5.4 of MI 61-101 as neither the fair market value of the AngloGold Private Placement, nor the fair market value of the consideration of the AngloGold Private Placement, exceeded 25% of Pure Gold’s market capitalisation. A material change report in connection with the AngloGold Private Placement will be filed less than 21 days before the closing of the AngloGold Private Placement. This shorter period was reasonable and necessary in the circumstances as the company wished to complete the AngloGold Private Placement in a timely manner.
The net proceeds received from the transactions will be used for the company’s exploration and development activities and for general corporate purposes. The securities issued under the transactions have a hold period of four months and one day from closing, expiring on 19 November 2019.
Read the article online at: https://www.globalminingreview.com/finance-business/19072019/pure-gold-finalises-bought-deal-private-placement-and-non-brokered-private-placement/