COLORADO RESOURCES LTD. (TSX-V: CXO) is pleased to announce that, further to its news releases of February 28, 2020 and March 18, 2020, the Company has closed the non- brokered private placements of 6,929,667 units at an issue price of $0.06 per Unit and 15,793,000 charity flow-through common shares at an issue price of $0.075 per FT Share for aggregate gross proceeds of $1,600,255.
Each Unit consisted of one common share in the capital of the Company and one-half of one common share purchase warrant. Each whole warrant entitles the holder to acquire an additional Colorado Share at an exercise price of $0.09 for three years from the date of issuance.
No finder’s fee or commission was paid in connection with the placement. The net proceeds from the Placements will be used to fund planned exploration activities as per Colorado’s press release dated February 19, 2020, as well as for working capital purposes. All securities issued in connection with the private placement are subject to a four month hold period.
Certain Directors of the Company subscribed directly or indirectly for 1,000,001 Units in the financing. The transaction is exempt from the formal valuation and minority shareholder approval requirements of Multilateral Instrument 61-101 in reliance on the exemptions set forth in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as neither the fair market value of the securities to be distributed in the Placements nor the consideration to be received for those securities, in so far as the Placements involves the insiders, exceeds 25% of the market capitalization. The Board of Directors approved the Placements by resolutions on which the Directors did not vote with respect to their participation in the Placements.
The Company did not file a material change report more than 21 days before the expected closing of the Placements as the details of the Placements and the participation therein by related parties of the Company were not settled until shortly prior to closing and the Company wished to close on an expedited basis for sound business reasons.
Early Warning Disclosure
Newmont Corporation, indirectly through Peartree Securities Inc., acquired 15,793,000 Colorado Shares pursuant to the Placements. Immediately prior to completion of the Placements, Newmont directly or indirectly held 23,796,717 Colorado Shares, representing approximately 12.6% of the issued and outstanding Colorado Shares and 3,168,358 Colorado Warrants, representing approximately 12.9% of the issued and outstanding Colorado Warrants.
Newmont has advised the Company that following the Placements, it now owns, directly or indirectly, 39,589,717 Colorado Shares, representing approximately 18.7% of the issued and outstanding Colorado Shares and 3,168,358 Colorado Warrants, representing approximately 11.3% of the issued and outstanding Colorado Warrants. Should Newmont exercise all of the Colorado Warrants, Newmont would hold, directly or indirectly, 42,758,075 Colorado Shares, representing approximately 19.9% of the issued and outstanding Colorado Shares (on a partially diluted basis). Newmont’s purchase price of the Colorado Shares was $740,691.70.
The Colorado Shares were acquired by Newmont for investment purposes. Newmont will evaluate its investment in the Company from time to time and may, based on such evaluation, market conditions and other circumstances, increase or decrease shareholdings as circumstances require through market transactions, private agreements or otherwise. A copy of the early warning report filed by Newmont in connection with the transaction will be available on the Company’s SEDAR profile. Newmont’s head office is located at 6363 South Fiddler’s Green Circle, Suite 800, Greenwood Village, Colorado, 80111.
Colorado Resources Ltd. is exploring for high-grade gold and copper in the Golden Triangle and the Toodoggone area of British Columbia. The portfolio includes the flagship Castle property, a porphyry copper-gold project located in the Red Chris mining district of the Golden Triangle neighbouring GT Gold’s Tatogga property. Other properties include the KSP, North ROK, Kingpin, Heart Peaks and Sofia properties in British Columbia. These assets are being advanced by a newly assembled technical and management team with experience in exploration, permitting and discovery.
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