Cabral Gold Inc (TSX-V:CBR) has announced a non-brokered private placement of up to 20 million company units, at a price of $0.10 per unit, to raise gross proceeds of up to C$2 million.
The junior resource firm said it intends to use the net proceeds from the offering for payment of outstanding debts, possibly including amounts due to company management, general working capital purposes, and, if the proceeds of the private placement are sufficient, exploration and development activities.
Each unit of the offering will consist of one company common share plus one common share purchase warrant, with each warrant will entitling the holder to purchase one Cabral Gold common share at an exercise price of $0.20 for two years following the date of closing of the private placement.
READ: Cabral Gold closes first tranche of previously announced non-brokered private placement for gross proceeds of $1.24M
Cabral noted it may pay finder's fees in connection with the offering, which would consist of a cash commission equal to up to 6.0% of the gross proceeds of the private placement.
The securities issued pursuant to the private placement will be subject to a four-month hold period from the closing date, according to the company.
Cabral Gold also reported that it will be seeking approval from the TSX Venture Exchange to reduce the exercise price of the warrants issued in connection with a non-brokered private placement that closed on November 25, 2022, from $0.30 to $0.205 through November 25, 2023, and from $0.40 to $0.30 from November 26, 2023, through November 24, 2024.
As well, Cabral said it has entered into a new term loan agreement with its CEO, Alan Carter, replacing a previous term loan agreement dated May 24, 2022.
The new agreement acknowledges the total of US$760,000 that Carter had advanced to the company through January 31, 2023, and US$50,858 of unpaid interest that had accrued on these advances through this date, the company noted.
Cabral added that it will pay Carter an initial payment of the loan amount equal to 15% of the gross proceeds of the private placement on or before the 10th business day following the date on which the company has determined that it has working capital in the amount of not less than C$3 million.
The loan agreement requires the remainder of the loan amount and all interest to be paid in full by December 31, 2023.
Furthermore, Cabral stated that interest will be charged on the unpaid balance of the loan amount at a rate of 12.5% per annum from February 1, 2023, through December 31, 2023.
If the company has not paid the loan amount and all interest thereon in full on or before December 31, 2023, Cabral Gold will be considered to be in default and the rate of interest charged on the unpaid balance of the loan amount will increase from 12.5% to 15.0% per annum.
The parties intend that interest on the loan amount be repayable in common shares.
Cabral Gold is a junior resource company engaged in the identification, exploration and development of mineral properties, with a primary focus on gold properties located in Brazil.
The company has a 100% interest in the Cuiú Cuiú gold district located in the Tapajós Region, within the state of Pará in northern Brazil.
Contact Sean at sean@proactiveinvestors.com