Pure Gold Mining Inc. (TSX-V:PGM) (LSE:PUR) is pleased to announce that it has closed the second and final tranche of its non-brokered private placement, previously announced on May 6, 2022. The closing of the First Tranche was announced on May 25, 2022. The Company is also pleased to announce it has closed the securities for debt agreements, previously announced on May 24, 2022.
Pursuant to the closing of the Second Tranche, the Company has issued a total of 22,168,000 units of the Company, at a price of C$0.15 per Unit, for aggregate gross proceeds of C$3,325,200. Each Unit consists of one common share and one common share purchase warrant. Each Warrant will be transferrable and entitle the holder to acquire one common share of PureGold for six months from the closing date of the Offering at a price of C$0.18. No finders fees were paid in relation to the Second Tranche.
Between the First and Second Tranches, the Company has issued a total of 207,240,960 units of the Company pursuant to the Offering at a price of C$0.15 per Unit, for aggregate gross proceeds of C$31,086,144.
Pursuant to the Securities for Debt Transaction, the Company has issued 20,922,914 Units at a price of $0.15 per Unit to certain creditors in order to settle outstanding debts totaling $3,138,437.10. Between the Securities for Debt Transaction and the Offering, the Company has issued a total of 228,163,874 Units of the Company at a price of C$0.15 per Unit.
AngloGold Ashanti Limited (“AngloGold Ashanti”), the Company’s largest shareholder, subscribed for 22,168,000 Units pursuant to the Offering (the “AngloGold Subscription”), bringing AngloGold Ashanti’s ownership in the Company following the Transactions to 19.2% on a partially-diluted basis and 16.5% on a non-diluted basis.
Mark O’Dea, Interim President & CEO of PureGold stated, “On behalf of the Executive Team I would like to thank our long term shareholders for their continuing support, as well as welcome all of our new shareholders to PureGold. This financing is intended to give the Company the runway it needs to bring stability to our operation and establish a profitable mining business in Canada. With a large, high-grade resource base, a strong and improving geological understanding of the deposit, significant opportunity for growth, and a talented new operating team at the helm, we are excited and committed to driving PureGold forward.”
Due to its share ownership, AngloGold is considered a “related party” of PureGold 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 (“MI 61-101”). The AngloGold Subscription and “related party” portion of the Offering, as disclosed in the May 25, 2022 news release, were 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 and “related party” portion of the Offering, nor the fair market value of the consideration of the AngloGold Subscription and “related party” portion of the Offering, exceeded 25% of PureGold’s market capitalization. A material change report in connection with the Transactions will be filed less than 21 days before the closing of the Transactions. This shorter period was reasonable and necessary in the circumstances as the Company wished to complete the Transactions in a timely manner.
Proceeds from the Offering will be used to complete the Company’s near-term objectives of ramping up the PureGold Mine to 800 tpd by Q3 2022, reducing operating and sustaining capital costs in Q2 2022 by at least 30% compared to Q1 2022, achieving sustainable positive site-level cash flow by Q3 2022, completing critical trade-off studies in support of the updated Mineral Resource, Mineral Reserve, and Life of Mine plan expected to be released by Q4 2022, and for general corporate purposes.
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. The Company owns and operates the PureGold Mine, which entered commercial production in 2021 after the successful construction of an 800 tpd underground mine and processing facilities. Gold reserves and resources are centered on a forty-seven square kilometre property with significant discovery potential. PureGold’s strategy is to pursue operational excellence today while investing in systematic exploration and phased expansions to fuel discovery and growth for the future.1
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We acknowledge the [financial] support of the Government of Canada.