Paramount Gold Nevada Corp. (NYSE American: PZG) announced today that it has received binding commitments for a non-brokered private placement of secured convertible notes totaling $5,343,000. Subscribers include an investment fund affiliate of Sprott Inc., Seabridge Gold Inc. and Paramount director Rudi Fronk.
Paramount Gold President and CEO, Glen Van Treek commented, “This financing enables us to complete and submit the Grassy Mountain permit applications to the Oregon Department of Geology and Mineral Industries and the federal Bureau of Land Management, continue to advance the project’s Feasibility Study and drill the highly prospective gold exploration targets surrounding Grassy Mountain including the priority Frost property. These targets are located in close proximity to the proposed Grassy mill site and have the potential to extend mine life.”
Each convertible note has an issue price of $975 per $1,000 face amount with a four year maturity. The convertible notes will bear interest at a rate of 7.5% per annum, payable semi-annually. The principal amount of the convertible notes will be convertible at a price of $1.00 per share of Paramount common stock representing a 25% premium to the closing trading price of Paramount common stock immediately preceding this announcement. At any point after the second anniversary of the issuance of the convertible notes, Paramount may force conversion if the share price remains above $1.75 for 20 consecutive trading days. The convertible notes are secured by a lien on all assets of the Company.
The securities to be sold in this private placement have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws, and accordingly may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. Paramount has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock underlying the convertible notes issued in this private placement.
This release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state. Any offering of the securities under the resale registration statement will only be by means of a prospectus.
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