Freegold Ventures Limited (TSX: FVL) announces that further to its news release of May 7, 2020, the Company has closed the fully subscribed first tranche of its previously announced brokered private placement for aggregate gross proceeds of $5 million.
Paradigm Capital Inc. acted as sole agent on the Private Placement of Units of the Company and subscription receipts. 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 which the Company issued 20,895,674 Units at a price of $0.17 per Unit and 8,516,326 Subscription Receipts at a price of $0.17 per Subscription Receipt.
Each Unit will consist of 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 $0.28, for a period of 2 years following the Closing Date. Each Subscription Receipt will entitle the holder thereof to receive, without payment of any additional consideration, one Unit.
The second tranche of the Private Placement of up to $5 million of Subscription Receipts is expected to close on June 2, 2020.
Mr. Eric Sprott has agreed to invest a total of $6 million in the Private Placement, including $2 million in the first tranche and $4 million in the second tranche. In the first tranche, Mr. Sprott purchased 3,248,474 Units which increased his fully diluted ownership interest in Freegold to 19.9%. The balance of Mr. Sprott’s investment will be completed with the purchase of Subscription Receipts, which if converted, will increase his interest in the Company to approximately 28.4%, assuming the second tranche Private Placement is also fully subscribed. The conversion of the Subscription Receipts for tranche 1 and tranche 2 will be conditional upon the approval of existing shareholders.
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.
Drilling at Golden Summit is expected to re-commence mid June taking into account quarantine measures still in place for entry into the State of Alaska. A comprehensive safety plan is currently being put in place by the Company designed to mitigate the risks of transmission of the COVID-19 virus amongst our contractors and community.
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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