Pure Gold Mining Inc (TSX-V:PGM, LSE:PUR, OTC:LRTNF) said it has closed the first tranche of its non-brokered private placement, which was announced on May 6, 2022, with the second of two tranches expected to close on or about May 27, 2022.
Between both tranches, the company said it expects to close on aggregate gross proceeds of approximately C$31 million.
Proceeds from the offering will be used to complete the company's near-term objectives of ramping up the PureGold Mine to 800 tons per day by Q3 2022, reducing operating and sustaining capital costs in Q2 2022 by at least 30% compared to Q1 2022, achieving sustainable positive site-level cash flow by Q3 2022, completing critical trade-off studies in support of the updated Mineral Resource, Mineral Reserve, and Life of Mine plan expected to be released by Q4 2022, and for general corporate purposes.
Under the closing of the first tranche, the company has issued a total of 185,072,960 units at a price of C$0.15 per unit, for aggregate gross proceeds of C$27,760,944.
Each unit in the placement consists of one common share and one common share purchase warrant. Each warrant will be transferrable and entitle the holder to acquire one common share of PureGold for six months from the closing date of the offering at a price of C$0.18.
READ: Pure Gold Mining sees its revenue grow in 1Q off the back of higher gold sales from Red Lake operation
In connection with the closing of the first tranche, Tamesis Partners LLP, REDPLUG Inc., Canaccord Genuity (TSX:CF, LSE:CF) Corp., Sprott Capital Partners, PI Financial Corp., Haywood Securities Inc., BMO Nesbitt Burns Inc., Stephen Avenue Securities Inc., Pollitt & Co Inc., Research Capital Corp., and Leede Jones Gable Inc., each received a subscription fee equal to 6.0% of the gross proceeds raised under the first tranche for an aggregate total of $512,592 paid by the company.
Certain directors and officers of the company, specifically, Mark O'Dea, Chris Haubrich, Lenard Boggio, Graeme Currie, Bryan Wilson, Maryse Belanger, Troy Fierro, Robert Pease, and Phil Smerchanski purchased or acquired direction and control over an aggregate of 13,933,332 units under the offering.
Eric Sprott's holding decreases
In a separate statement, 2176423 Ontario Ltd. - a corporation beneficially owned by investor Eric Sprott - said it acquired ownership of one million units of Pure Gold Mining through the private placement for an aggregate consideration of $150,000.
The acquisition, combined with prior corporate treasury issuances of shares, resulted in a decrease in Sprott's beneficial holdings in Pure Gold Mining of approximately 8.4% of the outstanding shares on a partially diluted basis since the date of the last early warning report.
Prior to the acquisition, Sprott beneficially owned and controlled 47,868,421 shares and 21,925,000 warrants representing approximately 7.7% of the outstanding shares on a non-diluted basis and approximately 10.8% on a partially diluted basis assuming the exercise of all such warrants.
Sprott now beneficially owns and controls 48,868,421 shares and 22,925,000 warrants representing approximately 5.9% of the outstanding shares on a non-diluted basis and approximately 8.4% on a partially diluted basis assuming the exercise of such warrants. The acquisition resulted in a partially diluted ownership change of greater than 2% (to below 10%) and, therefore, Sprott is no longer a reporting insider.
The company said the securities are held for investment purposes and Sprott has a long-term view of the investment and may acquire additional securities including on the open market or through private acquisitions or sell the securities including on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other relevant factors.
PureGold is a Canadian gold mining company, located in the very heart of Red Lake, Ontario, Canada. The company owns and operates the PureGold Mine, which entered commercial production in 2021 after the successful construction of an 800 tons per day underground mine and processing facilities.
Gold reserves and resources are centered on a 47 square kilometre property with significant discovery potential. PureGold's 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