Scottie Resources Corp. (TSX-V:SCOT) said it has entered into an agreement with Cormark Securities Inc, as sole underwriter, in connection with a bought deal private placement for aggregate gross proceeds to the company of approximately $6.5 million.
The placement is for 11,429,000 common shares of the company that qualify as flow-through (FT) shares - within the meaning of Subsection 66(15) of the Income Tax Act (Canada) - at a price of 35 cents per FT share for gross proceeds of $4,000,150; and for 10.87 million common (HD) shares of the company at a price of 23 cents per HD share for gross proceeds of $2,500,100,
The net proceeds from the issue of the HD shares will be used for working capital and general corporate purposes, the company said in a statement.
READ: Scottie Resources reports new assays on its Blueberry Contact Zone including two high-grade gold intercepts
The company will use an amount equal to the gross proceeds received by the company from the sale of the FT shares, under the provisions in the Income Tax Act (Canada), to incur eligible Canadian exploration expenses that qualify as flow-through mining expenditures as both terms are defined in the Income Tax Act (Canada) related to the company's projects in British Columbia, on or before December 31, 2024, and to renounce all the qualifying expenditures in favour of the subscribers of the FT shares effective December 31, 2023.
If the qualifying expenditures are reduced by the Canada Revenue Agency, the company will indemnify each FT share subscriber for any additional taxes payable by such subscribers as a result of the company's failure to renounce the qualifying expenditures as agreed.
The offering is expected to close on or about February 16, 2023, or such other date as the company and the underwriter may agree and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals including the acceptance of the TSX Venture Exchange. Subject to compliance with applicable regulatory requirements and in accordance with National Instrument 45-106 -- Prospectus Exemptions, the FT shares and HD shares will be offered for sale to purchasers resident in Canada and/or other qualifying jurisdictions under the listed issuer financing exemption under Part 5A of NI 45-106.
Because the offering is being completed under the listed issuer financing exemption, the securities issued to Canadian resident subscribers in the offering will not be subject to a hold period under applicable Canadian securities laws.
Scottie owns a 100% interest in the Scottie Gold Mine Property which includes the Blueberry Zone and the high-grade, past-producing Scottie Gold Mine. Scottie also owns 100% interest in the Georgia Project which contains the high-grade past-producing Georgia River Mine, as well as the Cambria Project properties and the Sulu property. Altogether Scottie Resources holds more than 59,000 hectares of mineral claims in the Stewart Mining Camp in the Golden Triangle.
The company's focus is on expanding the known mineralization around the past-producing mines while advancing near mine high-grade gold targets, to deliver a potential resource. All of the company's properties are located in the area known as the Golden Triangle of British Columbia which is among the world's most prolific mineralized districts.
Contact the author at jon.hopkins@proactiveinvestors.com