Regency Gold Corp. (TSX-V: RAU.H) is pleased to announce that further to its news release of February 10, 2020, the Company has closed its previously announced fully subscribed brokered private placement for aggregate gross proceeds of $15,000,000 led by Paradigm Capital Inc. and Sprott Capital Partners LP on behalf of a syndicate of agents, including Red Cloud Securities and Mackie Research Capital Corporation.

In connection with the Offering, the Company entered into an agency agreement dated February 11, 2020, among the Company and the Agents, pursuant to which the Company issued an aggregate of 75,000,000 subscription receipts at a price of $0.20 per Subscription Receipt.

The gross proceeds of the Offering less certain expenses of the Agents and other commissions are being held in escrow on behalf of the subscribers of the Subscription Receipts by Computershare Trust Company of Canada pursuant to the terms of a subscription receipt agreement dated February 11, 2020 among the Company, the Co-Lead Agents and the Escrow Agent. Each Subscription Receipt will be automatically converted, without payment of any additional consideration and without further action on the part of the holder thereof, for one unit of the Company upon satisfaction or waiver of the escrow release conditions  set out below and in the Subscription Receipt Agreement and prior to a Termination Event (as defined below), subject to adjustment in certain events. The Units to be issued upon conversion of the Subscription Receipts will be comprised of one common share of Regency and one-half of one common share purchase warrant (each whole common share purchase warrant, Each Warrant will be exercisable by the holder thereof for one common share of the Company for a period of twenty-four (24) months after the closing date of the Offering at an exercise price of $0.30 per Warrant Share, subject to adjustments in certain events.

The Escrow Release Conditions are as follows:

1. a) The receipt of all required corporate, shareholder and regulatory approvals in connection with the Offering, the Transaction (as defined below) and the TSXV Listing (as defined below), including, without limitation, the conditional approval of the TSXV for the listing of the Unit Shares and Warrant Shares and any relevant listing documents having been accepted for filing with the TSXV;
2. b) The completion or the satisfaction of all conditions precedent to the Transaction, substantially in accordance with the definitive agreements relating to the Transaction (other than the payment of the cash purchase price due in connection with the acquisition of the TBN Project (as defined below)), to the satisfaction of the Agents; and
3. c) The Company and the Agents having delivered a joint notice to the Escrow Agent, confirming that the conditions set forth in (a) and (b) above have been met or waived.

Under the term of the Offering, Mr. Eric Sprott, through 2176423 Ontario Ltd., a corporation which is beneficially owned by him, subscribed for an aggregate of 10,000,000 Subscription Receipts for aggregate consideration of $2,000,000 pursuant to the Offering (representing the right to acquire 10,000,000 Unit Shares and 5,000,000 Warrants), representing 7.99% of the issued and outstanding common shares of the Company on a non-diluted basis and 11.53% of the issued and outstanding common shares of the Company on a partially-diluted basis, assuming the exercise of Mr. Sprott’s Warrants. Mr. Sprott did not beneficially own or control any securities of the Company prior to the Offering.

The Subscription Receipts acquired by Mr. Sprott are for investment purposes. Mr. Sprott has a long-term view of the investment and may acquire additional securities of the Company, including on the open market or through private acquisitions, or sell securities of the Company, including on the open market or through private dispositions, in the future depending on market conditions, reformulation of plans and/or other relevant factors. A copy of Mr. Sprott’s early warning report will appear on the Company’s profile on SEDAR and may also be obtained by calling his office at (416) 945-3294 (200 Bay Street, Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J2).

As consideration for the services provided by the Agents in connection with the Offering: (a) the Agents received an aggregate cash commission of $859,500, being equal to 6% of the gross proceeds of the Offering (and reduced to 3% with respect to certain subscribers on the “President’s List“); and (b) the Agents received an aggregate of 4,297,500 compensation options on the Closing Date. Each Compensation Option is exercisable to acquire one Unit at the Issue Price for a period of twenty-four (24) months after the Closing Date, subject to adjustments in certain events.

Additionally, for the services provided by certain other eligible persons, the Company also paid a fee of: (i) a cash commission of $3,000, being equal to 3% of the total proceeds from certain subscribers on the President’s List introduced by the Finders; and (ii) an aggregate of 15,000 Compensation Options being equal to 3% of the number of Subscription Receipts sold under the Offering to certain subscribers on the President’s List introduced by the Finders.

In the event that: (i) the Escrow Agent does not receive the release notice contemplated by the Subscription Receipt Agreement prior to 5:00 p.m. (Toronto time) on that date which is 120 days after the Closing Date; or (ii) prior to the Escrow Release Deadline, the Company advises the Agents or announces to the public that it does not intend to proceed with the Transaction and/or satisfy the Escrow Release Conditions, the Escrowed Proceeds (plus any interest accrued thereon) will be returned to the holders of the Subscription Receipts on a pro rata basis and the Subscription Receipts will be cancelled without any further action on the part of the holders. To the extent that the Escrowed Funds are not sufficient to refund the aggregate Issue Price paid to the holders of the Subscription Receipts, the Company will be responsible and liable to contribute such amounts as are necessary to satisfy any shortfall.

The Offering was completed in connection with the acquisition by the Company of, subject to the satisfaction of certain conditions precedent, an option to acquire a 100% right, title and interest in the Escape Lake Property and the right to acquire 100% of Panoramic Resources Inc.’s indirect subsidiary, Panoramic PGMs (Canada) Ltd. which owns the Thunder Bay North Project. The Escape Lake Property and the TBN Project are collectively referred to as, the “TBN Property“.

The net proceeds of the Offering will be used to fund the cash portion of the consideration payable to Magma Metals Pty Ltd. in connection with the acquisition by the Company of the Pan Subsidiary, to fund drilling for the TBN Property, and for general corporate purposes.

The common shares of the Company are currently listed on the NEX Board of the TSXV under the symbol “RAU.H”. The Company intends to graduate from the NEX Board and list the common shares on the TSXV. The Company has applied to list the Unit Shares and Warrant Shares on the TSXV. The TSXV Listing will be subject to the Company fulfilling all the listing requirements of the TSXV.

The securities issued in connection with the Offering (including the Subscription Receipts and any Unit Shares, Warrants, and Warrant Shares) will be subject to a statutory hold period of four months and one day from the Closing Date, in accordance with applicable securities laws.

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