Golden Tag Resources Ltd revealed that it has completed the second and final tranche of its non-brokered private placement and issued an aggregate of 5.83 million units at a price of $0.25 per unit for aggregate gross proceeds of $1.46 million.
The Toronto-based junior exploration company said it plans to use the net proceeds to advance its San Diego project, in Durango Mexico, and for working capital and corporate purposes. The firm's San Diego property is located in the prolific Velardeña Mining District, where several mines have produced silver, zinc, lead, and gold over the past century.
Golden Tag estimated that collectively between the first and final tranche, it issued an aggregate of 13 million units for gross proceeds of $3.25 million. Eric Sprott, through 2176423 Ontario Ltd., a corporation which is beneficially owned by him acquired an aggregate of 4 million units.
READ: Golden Tag Resources increases private placement by up to C$1.25M on “strong investor demand”
Each unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant issued following the final tranche entitles the holder to acquire a share at a price of C$0.40 until February 28, 2024. The warrants contain an acceleration provision so if the closing price of the shares on the Exchange is $0.70 or more for 10 consecutive trading days the company will have the right to accelerate the expiry date of the warrants.
Golden Tag paid aggregate cash finder's fees of $7,000 and issued 28,000 finder's warrants. Each finder's warrant entitles the holder to buy one share at a price of $0.25 for a period of 24 months following closing of the final tranche, subject to the acceleration provision.
All shares issued and issuable are subject to a statutory hold period of four month and one day. The offering remains subject to TSX Venture Exchange final acceptance.
The company said Sprott is “an insider and control person of the company" and as such, his participation in connection with the private placement is a related-party transaction. Golden Tag said neither the fair market value of the shares purchased on behalf of Sprott, nor the consideration paid by him exceeds 25% of the company’s market capitalization.
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