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Contact Gold Closes Second Tranche of Private Placement

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Contact Gold Closes Second Tranche of Private Placement






Contact Gold Corp. (TSX-V: C) is pleased to announce, further to its news releases dated March 27, and April 17, the closing of the second tranche of the non-brokered private placement of units of the Company resulting in the issuance of an additional 3,350,000 Units at a price of $0.10 per Unit for gross proceeds of $335,000. In aggregate with the closing of the first tranche of the Offering, announced April 24, 2020, the Company has issued 10,870,000 Units, for gross proceeds of $1,087,000.


Each Unit consists of one common share of the Company and one Common Share purchase warrant. with each Warrant entitling the holder to purchase an additional Common Share at a price of $0.15 per share for a period of 24 months from the closing date. In the event that at any time between four months and one day following the closing date and the Expiry Date, the Common Shares trade on the TSX Venture Exchange at a closing price which is equal to or greater than $0.30 for a period of ten consecutive trading days, the Company may accelerate the expiry date of the Warrants by giving notice to the holders thereof and in such case the Warrants will expire on the 30th day after the date such notice is provided.


In connection with the closing of this second tranche of the Offering, the Company paid an aggregate of $9,300 in cash finders’ fees to eligible finders.


Net proceeds of the Offering are expected to be used to undertake further drilling at Contact Gold’s Green Springs and Pony Creek gold projects located in Nevada, and for general working capital.


Subject to final TSXV approval, the Company expects a third tranche to close on or about May 11, 2020.


The offered securities have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws, and may not be offered or sold to, or for the account or benefit of, any person in the United States or any “U.S person”, as such term is defined in Regulation S under the Securities Act, absent registration or an applicable exemption from registration requirements. Offers and sales in the United States will be limited to institutional accredited investor. This press 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.


The securities issued pursuant to the Offering will be subject to a four month and one day statutory hold period in Canada, and are also deemed to be “restricted securities” under Rule 144 of the Securities Act, which generally requires a one-year hold period.


This second tranche of the Offering included subscriptions by several insiders of the Company, including certain officers and directors, for an aggregate of 450,000 Units. Additional subscriptions by insiders are expected in the third tranche of the Offering.


Participation in the Offering by the officers and directors was consideration a “Related Party Transaction” under Policy 5.9 of the TSXV, which adopts Multilateral Instrument 61-101 (“MI 61-101”) as a policy of the TSXV. In completing such transactions, Contact Gold relied on the applicable exemptions from the valuation requirement and minority security holder approval requirements available under Sections 5.5(a) and 5.7(a) of MI 61-101, respectively, on the basis that the participation in the private placement by insiders did not exceed 25% of the Company’s market capitalization. A material change report was filed in connection with the participation of Insiders in the Offering less than 21 days in advance of the closing of the Offering, which the Company deemed reasonable in the circumstances so as to be able to avail itself of potential financing opportunities and complete the Offering in an expeditious manner.


The closing of the Offering remains subject to the final approval of the TSXV.


About Contact Gold Corp.


Contact Gold is an exploration company focused on producing district scale gold discoveries in Nevada. Contact Gold’s extensive land holdings are on the prolific Carlin and Cortez trends, which host numerous gold deposits and mines. Contact Gold’s land position comprises approximately 140 km2 of target rich mineral tenure hosting numerous known gold occurrences, ranging from early- to advanced-exploration and resource definition stage.


Green Springs and Pony Creek are early stage exploration properties and do not contain any mineral resource estimates as defined by National Instrument 43-101, Standards of Disclosure for Mineral Projects. There has been insufficient exploration to define a mineral resource estimate at Green Springs and Pony Creek. It is uncertain if further exploration will result in targets at either project being delineated as a mineral resource. There are no assurances that the geological similarities to projects mentioned herein (or documents referenced herein) operated by Gold Standard Ventures, Waterton, Fiore Gold or the Nevada Gold Mines Joint Venture, will result in the establishment of any mineral resource estimates at any of the Company’s property interests including Green Springs or Pony Creek, or that the projects can be advanced in a similar timeframe.


Additional information about Pony Creek is summarized in the NI 43-101 Technical Report entitled “NI 43-101 Technical Report on the Pony Creek Project, Elko County, Nevada, USA” prepared for Contact Gold, with an effective date of October 16, 2018, and dated October 22, 2018, as prepared by Vance Spalding, C.P.G; VP Exploration of Contact Gold, and can be viewed under Contact Gold’s issuer profile on SEDAR at


The scientific and technical information contained in this news release has been reviewed and approved by Vance Spalding, CPG, VP Exploration, Contact Gold, who is a “qualified person” within the meaning of NI 43-101.


Posted May 5, 2020

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