African Gold Group, Inc. (TSX-V: AGG) is pleased to announce that it has closed, on an oversubscribed basis, the first tranche of the previously announced C$5,000,000 non-brokered private placement financing of common shares for gross proceeds of C$5,590,000, see press release from July 22, 2020.
Pursuant to the First Tranche, the Company issued 22,360,000 units of the Company at a price of C$0.25 per Unit for gross proceeds of C$5,590,000. 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 July 29, 2022.
In connection with the closing of the First Tranche, the Company has paid aggregate finder’s fees of $146,375.00 in cash and 585,500 finder’s warrants) to certain finders. Each Finder Warrant will entitle the holder thereof to purchase one Common Share at a price of $0.40 until July 29, 2022. All securities issued under the First Tranche are subject to a statutory hold period ending on November 30, 2020.
The Company is also pleased to announce that due to investor demand, it has upsized the Offering to a maximum of 40,000,000 Units for gross proceeds of up to C$10,000,000. The Company intends to complete the second tranche of the Offering on or before August 7, 2020. The First Tranche and any future tranches of the Offering is subject to the receipt of all necessary approvals, including the approval of the TSX Venture Exchange.
Certain directors of the Company purchased or acquired direction and control over a total of 500,000 Units under the Offering. 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 TSXV with its focus on developing a gold platform in West Africa. Its principal asset is the Kobada Project in southern Mali.
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