Pure Gold Mining Inc. (TSX-V:PGM) (LSE:PUR) is pleased to announce that it has closed a first tranche of its non-brokered private placement announced on May 6, 2022. The second of two tranches is expected to close on or about May 27, 2022. Between both the First Tranche and Second Tranche, the Company expects to close on aggregate gross proceeds of approximately C$31 million.
Pursuant to the closing of the First Tranche, the Company has issued a total of 185,072,960 units of the Company, at a price of C$0.15 per Unit, for aggregate gross proceeds of C$27,760,944. 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.
In connection with the closing of the First Tranche, Tamesis Partners LLP, REDPLUG Inc., Canaccord Genuity Corp., Sprott Capital Partners, PI Financial Corp., Haywood Securities Inc., BMO Nesbitt Burns Inc., Stephen Avenue Securities Inc., Pollitt & Co Inc., Research Capital Corp., and Leede Jones Gable Inc. received a subscription fee equal to 6.0% of the gross proceeds raised under the First Tranche by each Finder for an aggregate total of $512,592 in Subscription Fees paid by the Company.
Certain directors and officers of the Company, specifically, Mark O’Dea, Chris Haubrich, Lenard Boggio, Graeme Currie, Bryan Wilson, Maryse Belanger, Troy Fierro, Robert Pease, and Phil Smerchanski purchased or acquired direction and control over an aggregate of 13,933,332 Units under the Offering. The Interested Persons are each considered a “related party” of PureGold and the sale of Common Shares under the Offering to the Interested Persons constitutes a “related party transaction” within the meaning of MI 61-101. The Interested Persons collectively held and controlled approximately 2.23% of the of the issued and outstanding Common Shares of the Company, on a non-diluted basis, prior to the closing of the Transactions. Following completion of the Offering, the Interested Persons hold 29,571,856 Common Shares, collectively representing approximately 3.65% of the issued and outstanding Common Shares of the Company. The “related party” portion of the Offering was 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 “related party” portion of the Offering, nor the fair market value of the consideration of the “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.