Highgold Mining Inc. said it has upsized an agreement with Cormark Securities Inc., on behalf of a syndicate of underwriters, under which the underwriters have now agreed to purchase, on a bought deal basis, 7.50 million common shares from the treasury of the company up from 6.25 million initially, at an unchanged price of $1.60 per common share for total gross proceeds of approximately $12.0 million, up from around $10 million.
In addition, the company has granted the underwriters an over-allotment option to purchase up to an additional 15% of the common shares of the offering on the same terms exercisable at any time up to 30 days following the closing, solely for market stabilization purposes and to cover over-allotments, if any.
Concurrently with the offering, the company intends to undertake a non-brokered private placement offering of common shares with an existing strategic investor, a senior gold producer, at the offering price for gross proceeds of approximately $5 million to bring the investor's interest in the company up to 9.9% on a post-offering basis.
The net proceeds of the offering and concurrent private placement are expected to be used for exploration and development initiatives in connection with the company's Johnson Tract project and for working capital and general corporate purposes.
READ: HighGold Mining hails results from infill hole at JT project in Alaska, which underscores mineralized system
The offering and concurrent private placement are expected to close on or about October 27, 2021, or such other date as may be agreed by the company and Cormark in the case of the offering, or by the company and the strategic investor in the case of the placement and is subject to certain conditions including, but not limited to, the receipt of all necessary corporate and regulatory approvals, including the approval of the TSX Venture Exchange and applicable securities regulatory authorities and the execution of a subscription agreement in connection with the placement.
The securities issued in the placement will be subject to a standard four-month hold period in Canada.
The offering will be qualified by way of a prospectus supplement to the company's existing base shelf prospectus in the provinces of British Columbia, Alberta and Ontario.
Highgold is a mineral exploration company focused on high-grade gold projects located in North America. The company's flagship asset is the high-grade Johnson Tract Gold (Zn-Cu) Project located in accessible Southcentral Alaska, USA.
The company also controls a portfolio of quality gold projects in the greater Timmins gold camp, Ontario, Canada that includes the Munro-Croesus Gold property, which is renowned for its high-grade mineralization, and the large Golden Mile and Golden Perimeter properties.
-- Adds upsized offering details --
Contact the author at jon.hopkins@proactiveinvestors.com