Pure Gold Mining Inc. (TSX-V:PGM) (LSE:PUR) is pleased to announce that it has entered into an agreement with National Bank Financial Inc., as lead underwriter, on behalf of a syndicate of underwriters including Clarus Securities Inc. and with Tamesis Partners LLP acting as special selling agent in the UK and Europe, under which the Underwriters have agreed to purchase, on a bought deal private placement basis, 16,989,000 common shares of the Company at a price of C$0.53 per share for gross proceeds of C$9,004,170. The Company has also granted the Underwriters an option to purchase up to an additional 9,434,000 common shares pursuant to the Brokered Offering for additional gross proceeds to the Company of up to C$5,000,020.

The Company is also pleased to announce it has agreed to a concurrent private placement of 30,181,572 common shares at the Offering Price with the Company’s largest shareholder, AngloGold Ashanti Limited by way of non-brokered private placement for additional gross proceeds of C$15,996,233. Closing of the AngloGold Subscription and the Brokered Offering are cross conditional upon one another.

Troy Fierro, President & CEO of PureGold, stated, “We are delighted to announce this financing with the support of our largest shareholder, AngloGold Ashanti. We value the global operational expertise AngloGold Ashanti brings and look forward to working collaboratively with their technical team to continue to unlock the full potential of the PureGold Mine.”

After giving effect to the Transactions, AngloGold Ashanti will own 19.9% of the outstanding common shares of PureGold on a partially diluted basis. Should the Underwriters Option be exercised, AngloGold Ashanti shall have the option to purchase such additional shares under the AngloGold Subscription as to allow AngloGold Ashanti to maintain approximate 19.9% ownership of PureGold following the exercise of the Underwriters Option. AngloGold Ashanti currently holds 65,653,870 common shares in PureGold which represents a 14.9% interest in the outstanding common shares of PureGold on a non-diluted basis. In addition, AngloGold Ashanti owns 1,653,809 PureGold warrants which if exercised in full would increase AngloGold Ashanti’s interest in PureGold to 15.2% on a partially diluted basis. Following the implementation of the Transactions, AngloGold Ashanti will hold 95,835,442 common shares in PureGold and 1,653,809 warrants which will represent an interest in PureGold of 19.6% on a non-diluted basis and 19.9% on a partially diluted basis, respectively. AngloGold Ashanti’s current interest in PureGold as well as the interest to be acquired pursuant to the AngloGold Subscription is for investment purposes and its interest may increase or decrease depending on market and other circumstances.

The Company intends to use the net proceeds raised from the Transactions to complete the ramp up of operations to design capacity at its 100%-owned PureGold Mine located in Red Lake, Ontario and for general corporate purposes.

In connection with the AngloGold Subscription, PureGold and AngloGold Ashanti will enter into a shareholder rights agreement providing AngloGold Ashanti with certain rights, standard anti-dilution and equity participation rights as well as certain rights to PureGold’s technical and scientific data.

The Transactions are expected to close on February 15, 2022 and are subject to certain conditions including receipt of all applicable regulatory approvals, the approval of the TSX Venture Exchange and, for the AngloGold Subscription, the approval of the South African Reserve Bank. Closing of the AngloGold Subscription is subject to execution of definitive documentation. The securities to be issued under the Transactions will be issued on a private placement basis and will have a hold period of four months and one day from the applicable closing date in accordance with applicable securities laws.

AngloGold Ashanti is considered a “related party” of PureGold as it currently owns approximately 14.9% of the issued and outstanding common shares of PureGold on a non-diluted basis and, accordingly, the AngloGold Subscription constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The AngloGold Subscription is exempt from the minority approval requirement of Section 5.6 and the formal valuation requirement of Section 5.4 of MI 61-101 as neither the fair market value of the AngloGold Subscription, nor the fair market value of the consideration for the AngloGold Subscription, exceeds 25% of PureGold’s market capitalization. A material change report in connection with the AngloGold Subscription will be filed less than 21 days before the closing of the AngloGold Subscription. This shorter period is reasonable and necessary in the circumstances as the Company wishes to complete the AngloGold Subscription in a timely manner.

The securities offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor will there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Pure Gold Mining Inc.

PureGold is a Canadian gold mining company, located in the very heart of Red Lake, Ontario, Canada. Our vision is pure and simple. To build a highly profitable, multi-generational growth company in the world-class gold mining district of Red Lake. With our 100%-owned, fully constructed operating PureGold Mine, a multi-million-ounce gold endowment, and significant exploration upside, our value-maximizing strategy is to pursue operational excellence today, while investing in systematic exploration and phased expansions to fuel discovery and growth for the future.