Solstice Gold Corp has announced the closing of its previously announced private placement financing for gross proceeds of approximately $2.7 million, representing an upsize from the previously anticipated gross proceeds of $1.1 million.
The offering saw the issuance of 12,766,667 HD units at a price of $0.12 per HD unit, each comprised of one common share of the company and one warrant exercisable for one common share at $0.17 for 18 months from the closing date; and 8,707,216 NFT units at a price of $0.135 per NFT unit, each comprised of one common share qualifying as a flow-through (FT) share for purposes of the Income Tax Act (Canada) and a half warrant on the same terms as the warrants in the HD units.
The company also announced that Kevin Reid will step down as a director of the company effective September 30, 2022, due to personal time constraints but will remain the largest shareholder of the company. Under the offering, Reid acquired $1.0 million of HD units at a price of $0.12 per unit, increasing his ownership in the company to approximately 16.5%.
"Kevin has been a strong supporter and major shareholder of Solstice since its inception, including having served as a Board member since 2020," said David Adamson, chairman of Solstice in a statement.
READ: Solstice Gold upsizes non-brokered private placement to gross proceeds of $3M in response to strong investor demand
"Over this time, he has made numerous meaningful contributions to our business, drawing on his wealth of experience gained over a long and successful business career. On behalf of the Board of Directors, the management team, and our shareholders, I thank Kevin for his past and continuing support and wish him and his family all the best in the future," he added.
The gross proceeds of the offering from the HD units will be used for general corporate purposes and working capital, while those from the FT shares comprised in the NFT units will be used to fund exploration programs qualifying as 'Canadian Exploration Expenses' and 'flow-through mining expenditures', and those from the warrants comprised in both the HD units and the NFT units will be used for general corporate purposes and working capital.
Insiders of the company subscribed for an aggregate of 11,044,167 HD units and 2,285,184 NFT units representing approximately $1.63 million of the gross proceeds of the offering.
As mentioned, Kevin Reid acquired 8,544,167 HD units at a price of $0.12 each for proceeds of approximately $1,025,300.
Prior to the offering, Reid, directly and indirectly, held 22,109,666 Solstice cmmon shares representing 13.5% of the issued and outstanding common shares. Following completion of the offering, Reid has control and direction over an aggregate of 30,653,833 common shares and 8,544,167 warrants, representing 16.5% of the issued and outstanding common shares, 57.7% of the issued and outstanding warrants and 20.17% of the issued and outstanding common shares if the warrants issued to Reid were exercised.
All securities of the company controlled by Reid are held for investment purposes. In the future, Reid, directly or indirectly, may acquire and/or dispose of securities of the company through the market, privately or otherwise, as circumstances or market conditions may warrant.
Michael Gentile, another director of the company acquired 1,250,000 HD units in the offering at a price of $0.12 each for proceeds of $150,000.
Prior to the offering, Gentile, directly and indirectly, held 22,109,666 Solstice common shares representing 13.5% of the issued and outstanding common shares. Following completion of the offering, he has control and direction over an aggregate of 23,359,666 Solstice common shares and 1,250,000 warrants, representing 12.6% of the issued and outstanding common shares, 8.4% of the issued and outstanding warrants and 13.16% of the issued and outstanding common shares if the warrants issued to Gentile were exercised.
All securities of the company controlled by Gentile are held for investment purposes. In the future, Gentile (directly or indirectly), may acquire and/or dispose of securities of the company through the market, privately or otherwise, as circumstances or market conditions may warrant.
The warrants contain a term that the holder or persons acting jointly or in concert with the holder may not exercise the warrants if such exercise would result in the holder exercising control or direction of 20% or more of the issued and outstanding common shares.
The offering was conducted in reliance upon available exemptions from the prospectus requirements of applicable Canadian securities laws. All securities issued under the offering are subject to a hold period of four months and one day from the closing date in accordance with applicable Canadian securities laws.
The securities have not been and will not be registered under the United States Act of 1933, as amended or any state securities laws and may not be offered or sold within the United States or to US Persons (as such term is defined in Regulation S under the US Securities Act) unless registered under the US
Solstice is an exploration company with quality, district-scale gold projects in established mining regions of Canada. Its 180 square kilometre (km2) Red Lake Extension (RLX) and New Frontier projects are located at the northwestern extension of the prolific Red Lake Camp in Ontario and approximately 45 kilometres (km) from the Red Lake Mine Complex owned by Evolution Mining.
The company is funded for phase one drilling at RLX. Its newly formed 326 km2 Atikokan Gold Project is approximately 23km from the Hammond Reef Gold Project owned by Agnico Eagle Mines Limited and is fully funded for a robust field program in 2022.
Its Qaiqtuq Gold Project which covers 886 km2 with certain other rights covering an adjacent 683 km2, hosts a 10 km2 high-grade gold boulder field, is fully permitted and hosts multiple drill-ready targets. Qaiqtuq is located in Nunavut, only 26 km from Rankin Inlet and approximately 7 km from the Meliadine Gold Mine owned by Agnico Eagle Mines Limited. An extensive gold and battery metal royalty and property portfolio of over 80 assets was purchased in October 2021. Approximately $1.3 million in value and two new royalties have been generated since the acquisition.
Contact the author at jon.hopkins@proactiveinvestors.com