Freegold Ventures Limited (TSX: FVL) announces that further to its news releases of May 7, 2020 and May 26, 2020, the Company has closed a fully subscribed second tranche of its previously announced brokered private placement for additional gross proceeds of $5,750,100, including over-allotment proceeds. Including proceeds from the first tranche, previously closed on May 26, 2020, the aggregate proceeds of the offering are $10,750,140. Paradigm Capital Inc. acted as sole agent in connection with both tranches.
In connection with the Private Placement, the Company entered into an agency agreement dated May 26, 2020, between the Company and the Agent. Pursuant to the Agency Agreement the Private Placement consisted of subscription receipts of the Company of which the Company issued 16,667,000 Subscription Receipts at a price of $0.30 per Subscription Receipt and granted the Agent an over-allotment option to increase the size of the Private Placement by up to an additional 15%. Including the over-allotment option, the Company issued an aggregate of 19,167,000 Subscription Receipts.
Each Subscription Receipt will entitle the holder thereof to receive, without payment of any additional consideration, one common share and one-half of one common share purchase warrant. Each whole Warrant will entitle the holder thereof to purchase one Common Share at a price of $0.45, for a period of 2 years following the Closing Date. The conversion of the Subscription Receipts for both tranche 1 and tranche 2 will be conditional upon the approval of existing shareholders.
Mr. Eric Sprott has invested a total of $6 million in the Private Placement, including $2 million in the first tranche and $4 million in the second tranche. Assuming conversion of the Subscription Receipts, Mr. Sprott will increase his interest in the Company to approximately 28%.
The Private Placement is subject to regulatory approval and all securities issued pursuant to the Private Placement will have a hold period of four months and one day.
The Company intends to use the net proceeds from the Private Placement to fund ongoing exploration, to update the Company’s technical studies, and for general corporate purposes.
The securities have not been, and will not be, registered under the Unites States Securities Act of 1933, as amended (the “U.S. Securities Act“), or any U.S. state security laws, and may not be offered or sold in the Unites States without registration under the U.S. Securities Act and all applicable state securities laws or compliance with requirements of an applicable exemption therefrom. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the Unites States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Freegold Ventures Limited
Freegold is a TSX listed company focused on exploration in Alaska and holds through leases the Golden Summit Gold Project, near Fairbanks as well the Shorty Creek Copper – Gold Project near Livengood.
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