True Gold Mining Inc. (TSX VENTURE:TGM) is pleased to announce that it has entered into a strategic investment agreement with Liberty Metals & Mining Holdings, LLC which, upon completion, will make LMM the Company’s largest shareholder.
 

LMM, a subsidiary of Boston-based Liberty Mutual Insurance, will invest a total of $23,450,931 in True Gold through a combination of a non-brokered private placement of True Gold common shares and the sale of a 2% net smelter return royalty on the Company’s interest in the Karma Gold Project
 

Pursuant to the agreement, LMM will purchase 52,755,248 Shares at a price of $0.33 per Share for gross proceeds of approximately C$17.4 million. The Purchased Shares will represent 19.95% of the outstanding Shares upon completion of the Placement.
 

In connection with the transaction, Christopher Noel Dunn, Managing Director of Liberty Metals & Mining, will be appointed to True Gold’s board of directors and, following closing of the transaction, LMM will have the right to participate in certain future equity financings of True Gold to maintain its pro-rata equity ownership.
 

“LMM’s investment comes at a pivotal time in the Karma Project’s evolution,” said Mark O’Dea, Executive Chairman, True Gold. “Their long-term investment strategy and financial strength are ideally suited for a company transitioning from exploration to an emerging developer. Upon completion of the feasibility study that is now underway, this funding will allow us to make deposits to secure longer lead time capital items, continue site preparation, and maintain our development schedule.”
 

Mr. Dunn’s appointment adds a respected voice in the mining and investment industries to True Gold’s board. He has extensive experience in equity and debt financing, through leadership roles at Goldman Sachs, JP Morgan and Bear Stearns.
 

Summary terms of the transaction:

--  Purchase of 52,755,248 Shares at a price of $0.33 per Share for gross

    proceeds of approximately $17.4 million

--  Purchase of the Royalty for a purchase price of approximately $6.04

    million. The Royalty is subject to the following repurchase options

    retained by True Gold:

    --  50% of the Royalty may be repurchased subsequent to the third

        anniversary of commencement of commercial production at fair market

        value

    --  50% of the Royalty may be repurchased on March 31, 2014 for

        approximately US$12.5 million

--  LMM's right to nominate one individual to True Gold's Board of Directors

    as long as LMM's percentage equity ownership is at least 7.5%

--  Participation right for LMM to maintain its pro-rata equity ownership,

    if LMM's percentage equity ownership is at least 7.5%

On closing of the Placement and Royalty transaction, True Gold will have approximately $38 million in working capital and no debt.
No finder’s fees or commissions will be paid in connection with the transaction or sale of the Royalty. Proceeds of the transaction will be used primarily for expenditures related to the advancement of the Karma Gold Project(1), ongoing exploration, as well as for general administrative and corporate expenses.
 

The Purchased Shares will be subject to a four-month hold period from the closing date. The Placement is subject to certain conditions including, but not limited to, the approval of the TSX Venture Exchange.
 

The purchased Shares described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States absent registration or an applicable exemption from the registration requirements of such Act.
 

About True Gold
 

True Gold Mining Inc. is where gold comes to life. We are committed to growing a successful gold exploration, development and production company, by focusing on projects with low costs, low technical risks and solid economics. The Company’s board, management and technical teams have proven track records in gold exploration, development, operations and production worldwide.