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African Gold Group Closes Oversubscribed $11.1 Million Private Placement

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African Gold Group Closes Oversubscribed $11.1 Million Private Placement






African Gold Group, Inc. (TSX-V: AGG) is pleased to announce that it has closed, on an oversubscribed basis, the second and final tranche of its previously announced C$10,000,000 non-brokered private placement financing of common shares for gross proceeds of C$5,474,000.  Together with the closing of the first tranche of the Offering, the Company raised gross proceeds of $11,084,000.


“I am very pleased to report the over-subscribed closing of the second and final tranche of the $10 million private placement with significant support from existing and new institutional investors,” says Danny Callow, Chief Executive Officer of AGG. “We will use these funds to focus on our Phase 3 exploration drilling programme, which we plan to start in early September. We have only drilled 4km of more than 30km of shear zones on our concessions, and we will be targeting rapidly increasing our resources and reserves with this programme. This additional drilling will complement the robust Definitive Feasibility Study published in July.”


Pursuant to the Final Tranche, the Company issued 21,976,000 units of the Company at a price of C$0.25 per Unit for gross proceeds of C$5,494,000. Each Unit consists of one common share of the Company and one half of a common share purchase warrant.  Each Warrant will entitle the holder to acquire one additional Common Share of the Company at an exercise price of C$0.40 until August 10, 2022.


In connection with the closing of the Final Tranche, the Company has paid aggregate finder’s fees of $231,587.50 in cash and 926,350 finder’s warrants to certain finders.  All securities issued under the Final Tranche are subject to a statutory hold period ending on December 11, 2020.


Certain directors and officers of the Company purchased or acquired direction and control over a total of 2,410,000 Units under the Final Tranche. The placement to those persons constitutes a “related party transaction” within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 -Protection of Minority Security Holders in Special Transactions adopted in the Policy. The Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of related party participation in the placement as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involved the related parties, exceeded 25% of the Company’s market capitalization (as determined under MI 61-101). Further details will be included in a material change report to be filed by the Company.


The securities offered under the Offering have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.


About African Gold Group


African Gold Group is a Canadian listed exploration and development company on the TSX-V with its focus on developing a gold platform in West Africa. Its principal asset is the Kobada Project in southern Mali.


Posted August 10, 2020

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