Sonoro Gold Corp (TSX-V:SGO, OTCQB:SMOFF) said it has closed an oversubscribed, non-brokered private placement of 20,050,000 units at $0.15 per unit, for aggregate gross proceeds of $3 million.
The net proceeds from the offering will be used to fund the ongoing development of a proposed heap leach mining operation at the company's Cerro Caliche gold project in Sonora, Mexico.
"We are pleased with the reception this financing has received from investors as it allows us to continue with the development of the Cerro Caliche gold project,” Sonoro's president and CEO Kenneth MacLeod said in a statement.
READ: Sonoro Gold files updated Preliminary Economic Assessment of Cerro Caliche Project in Mexico
“We are currently in the permitting phase and anticipate announcing soon an updated NI 43-101 resource estimate that will include the new geological data from our recently completed drilling program. The economic impact of the updated resource on the proposed mine will be contemplated in a further technical report."
Each unit of the offering consists of one Sonoro common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional Sonoro common share for a period of two years from the closing date at an exercise price of $0.225 per share.
Directors and officers at Sonoro subscribed for 4,716,828 units in the offering for gross proceeds of $707,524.
Sonoro chairman John Darch said: "It has been a very challenging market for raising capital and I would like to express my gratitude to our investors for their continued confidence in both our management team and our Cerro Caliche Project.
“The participation by Sonoro's directors and officers for 24% of the current financing also confirms our own confidence and determination to develop a mining operation at Cerro Caliche."
All securities issued and issuable in connection with the private placement will be subject to a four-month plus one day hold period ending October 31, 2022. The offering has received conditional acceptance from the TSX Venture Exchange but remains subject to receipt of final acceptance from the TSX Venture Exchange.
In connection with the fundraise, Sonoro entered into finder's fee agreements with Haywood Securities Inc., PI Financial Corp., Research Capital Corporation and iA Private Wealth Inc, pursuant to which it paid to each finder a cash finder's fee equal to 7% of the gross proceeds raised from subscribers introduced to the company by the finder, and non-transferable finder's warrants equal in number to 7% of the gross proceeds raised from subscribers introduced to the company by the finder.
Each finder's warrant entitles the finder to purchase one common share in the capital of the company at a price of $0.225 for a period of two years following the closing of the offering.
In total, the company paid $36,599.49 in finder's fees and issued 243,997 in non-transferable finder's warrants.
Contact the author at jon.hopkins@proactiveinvestors.com