Guerrero Ventures Inc. (TSX-V: GV) is pleased to announce that it has held a first closing of its previously-announced private placement of subscription receipts. At the first closing, Guerrero issued 3,420,800 Subscription Receipts at an issue price of C$0.90 per Subscription Receipt for gross proceeds of approximately C$3.08 million. Guerrero expects to hold a second closing of the private placement in April in order to accommodate investors dealing with longer approval and processing periods due to the Covid-19 pandemic.
The private placement is being effected through a syndicate of securities dealers composed of Scotiabank and BMO Capital Markets as Joint Bookrunners, CIBC Capital Markets, RBC Capital Markets, Canaccord Genuity Corp., Desjardins Capital Markets, Haywood Securities Inc. and National Bank Financial Inc.
Each Subscription Receipt entitles the holder thereof to receive, without payment of any additional consideration or further action on the part of the holder, one common share of the Company upon satisfaction and/or waiver of certain escrow release conditions, including but not limited to the closing of the Transaction (as defined below).
The gross proceeds from the sale of the Subscription Receipts, less 50% of the Agents’ commission and Agents’ expenses payable on the closing date of the private placement will be held in escrow by Computershare Trust Company of Canada in accordance with a subscription receipt agreement dated April 2, 2020 among Guerrero, Computershare Trust Company of Canada, Scotiabank and BMO Capital Markets and will be released to the Company upon satisfaction and/or waiver of the Escrow Release Conditions. If the Transaction closes on or before August 3, 2020, the escrowed proceeds from the private placement of Subscription Receipts will be released to Guerrero. If the Transaction fails to close by August 3, 2020, or the Transaction is terminated at an earlier time, the gross proceeds and pro rata entitlement to interest earned on the escrowed proceeds thereon will be paid to holders of the Subscription Receipts.
At the first closing, Guerrero paid the Agents a cash commission representing 6% of the gross proceeds. Fifty percent of the cash consideration has been deposited into escrow and will be released to the Agents upon satisfaction and/or waiver of the Escrow Release Conditions.
Subject to satisfaction and/or waiver of the Escrow Release Conditions, the Company will use the net proceeds from the private placement for working capital purposes and to pay a portion of the cash consideration to Yamana Gold Inc. and one of its affiliates in connection with the previously-announced proposed transaction involving the acquisition by Guerrero from funds related to Orion Resource Partners (USA) LP and from Yamana Gold of two portfolios comprising an aggregate of ten royalty, stream and gold loan assets for total consideration of US$268 million and US$65 million, respectively, pursuant to definitive purchase agreements dated February 23, 2020.
About Guerrero Ventures
Guerrero is a publicly listed company with a focus on acquiring mineral assets that will provide the opportunity to enhance shareholder value.
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We acknowledge the [financial] support of the Government of Canada.