COLORADO RESOURCES LTD. (TSX-V:CXO) is pleased to announce it will complete non-flow through and flow-through non-brokered private placements that will include up to 10,000,000 units at an issue price of $0.26 per Unit and 12,720,000 flow-through units at an issue price of $0.365 per FT Unit. Following completion of the Placements Colorado expects to raise up to $7,242,800.
Each Unit will consist of one common share in the capital of the Company and one half of one non-transferable Common Share purchase warrant. Each whole warrant will entitle the holder thereof to acquire an additional Common Share at an exercise price of $0.45 for 30 months after the date of issuance.
Each Flow-Through Unit will consist of one flow-through common share of the Company that qualifies as a flow-through share for purposes of the Income Tax Act (Canada) and one half of one Warrant on the same terms as described herein. The FT Units are part of a donation arrangement structured by PearTree Securities Inc. through which Goldcorp is expected to be the ultimate holder of the FT Units. Goldcorp will also purchase 4,240,000 Units directly from Colorado. The Placements are expected to close on or before August 31, 2017, following which Goldcorp will own approximately 14.25% of the issued and outstanding shares of Colorado.
The Company may pay finder’s fees in accordance with the rules and policies of the TSX Venture Exchange. The Placements remain subject to the approval of the Exchange. All securities issued in the Placements will be subject to a statutory hold period of four months from the Closing Date of the Placement.
On completion of the Placements, Goldcorp will have the right to maintain its pro-rata ownership percentage in Colorado during future financings. This right will entitle, but not obligate Goldcorp to participate in any future equity financings by Colorado to the extent necessary for Goldcorp to maintain a 19.95% equity ownership interest in the issued and outstanding common shares of Colorado. Goldcorp will also have a right of first refusal in respect of any non-equity financing and tolling arrangements related to future exploration or development on the KSP property and any BC properties Colorado expends the Goldcorp use of proceeds.
Proceeds from the FT Units will be used by Colorado to incur eligible Canadian exploration expenditures to expand the 2017 exploration program. Colorado will renounce the qualifying expenditures to subscribers of the FT Units for the fiscal year ended December 31, 2017. Proceeds from the sale of Units will be used for general corporate purposes.
Concurrently, further to Colorado’s news release of May 11, 2017 wherein Colorado earned a 51% interest in KSP and outlined the exploration spending that would vest a further 29%, Colorado has entered into an amending agreement with SnipGold Corp. a wholly owned subsidiary of Seabridge Gold Inc. wherein the parties will amend the original Option and Colorado will purchase the outstanding 49% interest currently held by Seabridge in Colorado’s flagship KSP project immediately. The transaction is subject to TSX Venture Exchange approval and will result in Colorado owning a 100% interest upon payment to Seabridge of $1,000,000 in cash, 2,000,000 Colorado shares and a 2% NSR on the property (half of which can be repurchased at any time for $2,000,000).
Adam Travis, President and CEO of Colorado stated “This is one of the most important milestones in Colorado’s 8 year history. The Company’s 2016 exploration focused on the Inel zone at KSP and highlighted significant results (see News Release date December 19, 2016). Goldcorp’s investment will not only allow us to increase our ownership of KSP to 100%, it will also provide additional funding to expand our 2017 exploration program and drill-test targets we would not otherwise be able to explore this year. We look forward to welcoming both Goldcorp and Seabridge as shareholders and now have the opportunity to advance KSP with significant support on all levels.”
Colorado’s financial advisor with respect to the strategic investment was Minvisory Corp.
Colorado Resources Ltd. is currently engaged in the business of mineral exploration for the purpose of acquiring and advancing mineral properties located in British Columbia and Nevada.
Colorado’s main BC exploration projects include the KSP property currently under option with Seabridge Gold Inc., the 100% owned Kingpin property and the 100% owned North ROK property. Additionally Colorado holds an option on the Green Springs Property (Nevada) from Ely Gold & Minerals Inc.
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