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Falco Announces Closing of $36.5 Million Bought Deal Financing

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Falco Announces Closing of $36.5 Million Bought Deal Financing






Falco Resources Ltd. (TSX-V:FPC) is pleased to announce it has closed its previously announced bought deal prospectus offering of 24,183,350 units at a price of $1.07 per Unit, and 8,260,475 flow-through common shares (the “Flow-Through Shares”) at a price of $1.28 per Flow-Through Share for aggregate gross proceeds of approximately $36.5 million including 3,154,350 Units and 447,975 Flow-Through Shares issued pursuant to the partial exercise by the underwriters of the over-allotment option.



The Offering was conducted by a syndicate of underwriters led by Haywood Securities Inc., and including BMO Nesbitt Burns Inc., Canaccord Genuity Corp., Desjardins Securities Inc., Beacon Securities Limited and M Partners Inc. The net proceeds of the Offering will be used for the continued exploration and development of the Horne 5 Project, for dewatering and rehabilitation of the Quemont 2 Shaft, pre-construction surface installation, and for working capital and general corporate purposes.



The proceeds received by the Company from the sale of the Flow-Through Shares will be used by the Company to incur sufficient Canadian exploration expenses (as defined in the Income Tax Act (Canada) on the Horne 5 Project, on or before December 31, 2017 so as to enable the Company to renounce, effective on or before December 31, 2016, in favour of each purchaser of Flow-Through Shares, an amount equal to the aggregate purchase price for the Flow-Through Shares paid by such purchaser.



Each Unit entitles the holder to acquire, for no additional consideration, one common share in the capital of the Company and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant shall be exercisable to acquire one additional common share (a “Warrant Share”) of the Company for a period of 18 months from the closing date of the Offering at an exercise price of $1.45 per Warrant Share.



The expiry date of the Warrants may be accelerated by the Company at any time following the six-month anniversary of the closing of the Offering and prior to the expiry date of the Warrants if the volume-weighted average trading price of the Company’s common shares is greater than $1.75 for any 20 consecutive trading days, by issuing a press release announcing the reduced warrant term whereupon the Warrants will expire on the 20th calendar day after the date of such press release.



The Units and Flow-Through Shares were offered by way of short form prospectus in all of the provinces of Canada and in the United States to qualified institutional buyers pursuant to Rule 144A, and to certain accredited investors pursuant to an exemption under the U.S. Securities Act of 1933. Copies of the final short form prospectus and documents incorporated therein may be obtained on request from the Secretary of the Company by sending a written request to 1100 avenue des Canadiens-de-Montréal, Suite 300, Montréal, Québec, Canada, H3B 2S2, telephone: 514 905-3162, and are available electronically under Falco’s issuer profile on SEDAR at



The securities offered have not been registered under the United States 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.



Certain officers and directors of Falco and Osisko Gold Royalties Ltd (“Osisko”), an insider of Falco, have participated in the Offering and were issued 661,000 Flow-Through Shares. Osisko also participated in the Offering and was issued 2,343,750 Flow-Through Shares. Such participation in the Offering constitute “related party transactions” as defined in Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (“61-101”). The Offering is exempt from the formal valuation and minority shareholder approval requirements of 61-101 as neither the fair market value of the securities issued to insiders nor the consideration for such securities by insiders exceed 25% of the Company’s market capitalization. The Company did not file a material change report 21 days prior to closing of the Offering as the participation of insiders of the Company in the Offering had not been confirmed at that time.



Finally, the Company is expected to close the first tranche of the concurrent private placement previously announced on November 2, 2016 in the next few weeks.



About Falco



Falco Resources Ltd. is one of the largest mineral claim holders in the Province of Québec, with extensive land holdings in the Abitibi Greenstone Belt. Falco owns 74,000 hectares of land in the Rouyn-Noranda mining camp, which represents 70% of the entire camp and includes 13 former gold and base metal mine sites. Falco’s principal property is the Horne Mine, which was operated by Noranda from 1927 to 1976 and produced 11.6 million ounces of gold and 2.5 billion pounds of copper. A updated 43-101 mineral resource estimate for the Horne 5 deposit delineated an Indicated Resource of 5,361,000 gold equivalent ounces (“oz AuEq”), including 3,418,232 oz Au hosted in 58.3 million tonnes averaging 2.86 g/t AuEq (1.82 g/t Au; 15.60 g/t Ag; 0.20% Cu; 1.00% Zn) and an Inferred Resource of 1,254,000 oz AuEq, including 854,534 oz Au hosted in 12.7 million tonnes averaging 3.08 g/t AuEq (2.10 g/t Au; 26.26 g/t Ag; 0.22% Cu; 0.57% Zn.) — see January 25th, 2016 press release for details. Osisko Gold Royalties is the largest shareholder of the Company and currently owns 16.2% of the outstanding shares of the Company.


Posted November 27, 2016

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