Roxgold Inc. (TSX-V:ROG) is pleased to announce that it has entered into an agreement with a syndicate of underwriters pursuant to which they have agreed to purchase, on a bought deal basis, 25,000,000 common shares at a price of $0.80 per share for gross proceeds to the Company of $20 million. The Offering will be conducted through a syndicate of underwriters co-led by Cormark Securities Inc. and Macquarie Capital Markets Canada Ltd.
In addition, the Company has agreed to grant to the underwriters an option to purchase up to an additional 15% of the number of Shares sold under the Offering at a price of $0.80 per Share, on the same terms and conditions as the Offering, exercisable at any time, in whole or in part, until the date that is 30 days following the closing of the Offering.
The net proceeds from the Offering will be used (i) for regional exploration, (ii) to replace the US$10 million equity financing facility (the “Equity Financing Facility”) provided by Roxgold’s underground mining contractor, African Underground Mining Services (“AUMS”), and (iii) for general corporate purposes.
AUMS has agreed to enter into an escrow agreement with Roxgold for an eight month period for the 8,979,286 Common Shares which it previously acquired pursuant to its US$5 million investment made in July 2015 (see Roxgold Press Release dated July 6, 2015) on the basis that Roxgold does not utilize the Equity Financing Facility.
The Common Shares to be issued under the Offering will be offered by way of a short form prospectus in the provinces of British Columbia, Alberta, Manitoba, Ontario and New Brunswick.
The Offering is scheduled to close on or about March 8, 2016 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals including the approval of the TSX Venture Exchange and the securities regulatory authorities.
The securities offered in the Offering 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, 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 there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Roxgold is a gold exploration and development company with its key asset, the high grade Yaramoko Gold Project, located in the Houndé greenstone region of Burkina Faso, West Africa. The Company is currently in construction and expects to be producing gold by Q2 2016.
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