Otso Gold Corp. (TSX-V:OTSO) is pleased to announce that the Company has executed a draw-down equity financing facility of up to $8,000,000 CDN, with Alumina Partners (Ontario) Ltd. an affiliate of Alumina Partners, LLC, a New York-based private equity firm that has made substantial investments in a broad range of publicly traded securities. The terms of the Draw-Down Facility are set out in an investment agreement dated May 11, 2020 between Alumina and the Company.

The proceeds from the Draw-Down Facility will allow the Company to continue the development of the 100% owned Otso Gold Mine back to production. The Draw-Down Facility is subject to Alumina and the Company agreeing mutually to the pricing terms of each tranche of financing. The detailed terms of the Investment Agreement are described below.

Brian Wesson stated “We look forward to working with Alumina as we progress the Otso Gold Mine. The facility will provide working capital to the Company on an as-needed basis. The execution of the Investment Agreement with Alumina is a significant step towards the restart of the mine and demonstrates confidence in the project and the management team”. 

“Alumina is excited to support Otso as they progress towards reopening the Otso Gold Mine,” said Adi Nahmani, Alumina’s Managing Member. “For a number of reasons, including the attractiveness of gold as a currency hedge and an inflation hedge, we have been allocating more capital to gold for the past year. We find the value proposition of Otso, with a veteran hands-on management team and a fully-built, fully-permitted mine, to be very compelling in this environment.” 

Details of the Alumina Facility 

The Investment Agreement details the purchase of up to $8,000,000 of units of the Company, consisting of one common share and one common share purchase warrant, at discounts ranging from 15% to 25% of the market price of the Shares, with tranche of the Draw-Down Facility occurring at the mutual consent of the Company and Alumina, throughout the 24 month term of the Investment Agreement. The exercise price of the Warrants will be at a 20% premium over the market price of the Shares. There are no upfront fees or interest associated with the use of the Draw-Down Facility. 

Correction to March 27, 2020 Press Release 

The Company also announces a correction to its press release issued on March 27, 2020, in connection with the closing of an offering of 10% convertible unsecured debentures of the Company. The proceeds raised under the Debenture Financing should have read as $3,737,000 rather than $3,705,032.

About the Company 

Otso Gold Corp. wholly owns the Otso Gold Mine near the town of Raahe in Finland. The Otso Gold Mine is fully built, fully permitted, has all infrastructure in place, two open pits, and is progressing towards production at a nameplate capacity of 2 million tonnes per annum.