Aurania Resources Ltd. (TSX-V: ARU) (OTCQB: AUIAF) (FSE: 20Q) is pleased to announced that it has closed the first tranche of the non-brokered private placement previously announced (see news releases dated July 18, 2019 and August 23, 2019) for units of the Company at a price of C$2.70 per Unit, for total gross proceeds of up to C$4,000,000. Each Unit consists of one common share of the Company and one-half of a Common Share purchase warrant. Each whole Warrant entitles the holder to purchase one Common Share at an exercise price of $4.00 for a period of 18 months following closing of the Offering. The Offering includes an over-allotment option, allowing Aurania to issue up to an additional 370,370 Units for additional gross proceeds of up to C$1,000,000.
The First Tranche consisted of the sale of 1,030,862 Units for the gross proceeds of C$2,783,264. In connection with the First Tranche eligible finders were paid C$18,128 in cash compensation and were issued 6,714 compensation warrants for their assistance with the First Tranche. Each Compensation Warrant is exercisable into a Common Share at C$4.00 per Common Share for 24 months form the issuance.
The Units, the Compensation Warrants and underlying securities are subject to a customary four months and a day hold period. The Units, the Compensation Warrants and underlying securities have not been and will not be registered under the United States Securities Act of 1933, as amended, (the “U.S. Securities Act“) or applicable state securities laws and may not be offered or sold in the United States or to U.S. Persons (as defined in the U.S. Securities Act) without registration, or exemption from registration, under such laws.
The Company expects to close a subsequent tranche(s) of the Offering prior to the end of September 2019.
In connection with the First Tranche, Dr. Keith Barron, Chairman and CEO of the Company, acquired 402,962 Units through a corporate entity over which he has direction and control. Dr. Barron’s participation in the First Tranche constitutes a “related party transaction” under the Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The Company relies on the exemption from the formal valuation requirements of MI 61-101 available on the basis of the securities of the Company not being listed on specified markets, including the Toronto Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the NASDAQ or certain overseas stock exchanges. The Company also relies on the exemption from minority shareholder approval requirements under MI 61-101 on the basis that the fair market value of the anticipated participation in the First Tranche by Dr. Barron does not exceed 25% of the market capitalization of the Company.
Immediately prior to the closing of the First Tranche, Dr. Barron had beneficial ownership and control over 18,606,546 Common Shares and 400,000 options to acquire Common Shares, or approximately 57.15% of the then outstanding Common Shares on a partially diluted basis. Following the First Tranche. Dr. Barron has beneficial ownership and control over 19,009,508 Common Shares, 201,481 Warrants and 400,000 options to acquire Common Shares, or approximately 56.86% issued and outstanding Common Shares. The Units were acquired by Dr. Barron for investment purposes. Depending on market conditions, Dr. Barron may acquire additional or dispose of securities of the Company from time to time in the future, in the open market or pursuant to privately negotiated transactions. For the purposes of this notice, the address of Dr. Barron is 36 Toronto Street, Suite 1050, Toronto, Ontario.
In satisfaction of the requirements of the National Instrument 62-104 – Take-Over Bids And Issuer Bids and National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, an early warning report respecting the acquisition of Units by Dr. Barron will be filed under the Company’s SEDAR Profile at www.sedar.com.
The gross proceeds raised from the sale of the Units pursuant to the Offering will be used by the Company to advance exploration in the Lost Cities – Cutucu Project in southeastern Ecuador and environs, including the analysis of large data sets, initial drilling of gold targets, advancement of copper-silver targets, and for general working capital purposes.
Aurania is a junior mineral exploration company engaged in the identification, evaluation, acquisition and exploration of mineral property interests, with a focus on precious metals and copper. Its flagship asset, The Lost Cities – Cutucu Project, is located in the Jurassic Metallogenic Belt in the eastern foothills of the Andes mountain range of southeastern Ecuador.
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