Pure Gold Mining Inc said it has entered into an agreement with National Bank Financial Inc, as lead underwriter on behalf of a syndicate including Clarus Securities Inc and with Tamesis Partners LLP acting as special selling agent in the UK and Europe, under which the underwriters have agreed to purchase, on a bought deal private placement basis, 16,989,000 common shares of the company at a price of C$0.53 per share for gross proceeds of C$9,004,170.
The company said it has also granted the underwriters an option to purchase up to an additional 9,434,000 common shares under the offering for additional gross proceeds to the company of up to C$5,000,020.
Pure Gold Mining also announced that it has agreed to a concurrent non-brokered private placement of 30,181,572 common shares at the offering price with the company’s largest shareholder, AngloGold Ashanti (ASX:AGG) Limited for additional gross proceeds of C$15,996,233. Closing of the AngloGold Subscription and the brokered offering are cross conditional upon one another.
The company said it intends to use the net proceeds raised from the transactions to complete the ramp-up of operations to design capacity at its 100%-owned PureGold Mine located in Red Lake, Ontario and for general corporate purposes.
In a statement, Troy Fierro, president & CEO of PureGold said: “We are delighted to announce this financing with the support of our largest shareholder, AngloGold Ashanti. We value the global operational expertise AngloGold Ashanti brings and look forward to working collaboratively with their technical team to continue to unlock the full potential of the PureGold Mine.”
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After giving effect to the transactions, AngloGold Ashanti will own 19.9% of the outstanding common shares of PureGold on a partially diluted basis.
Should the underwriters option be exercised, AngloGold Ashanti shall have the option to purchase such additional shares under the AngloGold Subscription as to allow AngloGold Ashanti to maintain approximate 19.9% ownership of PureGold following the exercise.
AngloGold Ashanti currently holds 65,653,870 common shares in PureGold which represents a 14.9% interest in the company's outstanding common shares on a non-diluted basis. In addition, AngloGold Ashanti owns 1,653,809 PureGold warrants which if exercised in full would increase AngloGold Ashanti’s interest in PureGold to 15.2% on a partially diluted basis.
Following the implementation of the transactions, AngloGold Ashanti will hold 95,835,442 common shares in PureGold and 1,653,809 warrants which will represent an interest in PureGold of 19.6% on a non-diluted basis and 19.9% on a partially diluted basis, respectively.
AngloGold Ashanti’s current interest in PureGold as well as the interest to be acquired pursuant to the AngloGold Subscription is for investment purposes and its interest may increase or decrease depending on market and other circumstances.
In connection with the subscription, PureGold and AngloGold Ashanti will enter into a shareholder rights agreement providing AngloGold Ashanti with certain rights, standard anti-dilution and equity participation rights as well as certain rights to PureGold’s technical and scientific data.
The transactions are expected to close on February 15, 2022, and are subject to certain conditions including receipt of all applicable regulatory approvals, the approval of the TSX Venture Exchange and, for the AngloGold Subscription, the approval of the South African Reserve Bank. Closing of the AngloGold subscription is subject to execution of definitive documentation.
The securities to be issued under the transactions will be issued on a private placement basis and will have a hold period of four months and one day from the applicable closing date in accordance with applicable securities laws.
The securities offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended or any US 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 US Securities Act and applicable US state securities laws.
PureGold is a Canadian gold mining company, located in the very heart of Red Lake, Ontario, Canada. Its vision is pure and simple - to build a highly profitable, multi-generational growth company in the world-class gold mining district of Red Lake.
With its 100%-owned, fully constructed operating PureGold Mine, a multi-million-ounce gold endowment, and significant exploration upside, the company's value-maximizing strategy is to pursue operational excellence today, while investing in systematic exploration and phased expansions to fuel discovery and growth for the future.
Contact the author at jon.hopkins@proactiveinvestors.com