Discovery Metals Announces $17 Million Private Placement Including $5 Million Investment From Eric Sprott
October 10 2019 - 7:49AM
Discovery Metals Corp. (“Discovery”) (TSXV: DSV)
is pleased to announce that it intends to complete a non-brokered
private placement (the “Private Placement”) to raise up to $17
million through the issuance of common shares (“Common Shares”) and
subscription receipts (“Subscription Receipts”) at a price of $0.45
per security.
Arlington Group Asset Mangement Limited has been
engaged to provide advice on the Private Placement with select
European institutions and Sprott Capital Partners LP is acting as
an advisor to Discovery and finder for North American
investors.
Mr. Eric Sprott has agreed to invest $5 million
in the Private Placement. Mr. Sprott will purchase that number of
Common Shares which will maintain his 19.9% interest in Discovery
following the issuance of the Common Shares. The balance of Mr.
Sprott’s investment will be completed with the purchase of
Subscription Receipts, which if converted, will increase his
interest in the Company to approximately 22%, assuming the Private
Placement is fully subscribed.
Proceeds from the Subscription Receipts will be
placed in escrow on the closing of the Private Placement, to be
released to Discovery on the receipt of all necessary shareholder
and regulatory approvals (“Approvals”) to the creation of a new
“Control Person” (as defined in the policies of the TSX Venture
Exchange). On conversion, each Subscription Receipt will
automatically convert into one Common Share, for no additional
consideration. In the event that the Approvals are not obtained by
December 31, 2019, each Subscription Receipt will be cancelled, and
the subscription funds will be returned to the subscriber.
Taj Singh, President and CEO of Discovery
commented, “We are excited to have substantially expanded our
European investor base as we transition into our next phase of
growth. We are also very appreciative of the continued support of
Mr. Sprott and are pleased that he has significantly increased his
ownership in Discovery. These investments ensure we are well funded
to pursue exploration plans for our Cordero silver project, and
also for our Coahuila silver-zinc-lead projects. For Discovery
shareholders, this private placement is a strong endorsement of our
future business plans.”
In connection with the Private Placement,
Discovery may pay a finder’s fee to one or more arms’ length
parties who introduce Discovery to investors, in accordance with
the policies of the TSX Venture Exchange (the “Exchange”). The
securities issued will be subject to a four-month-and-one-day
statutory hold period from the date of issuance. Closing of the
Private Placement remains subject to Exchange approval.
The proceeds of the Private Placement will be
used primarily to fund Discovery’s continuing exploration program
at its exploration properties. A portion of the proceeds will be
used for general working capital purposes.
About Discovery Metals
Corp.
Discovery Metals Corp. (TSX-V: DSV) is a
Canadian exploration and development company headquartered in
Toronto, Canada, and focused on historic precious metal districts
in Mexico. Discovery’s flagship is its 100%-owned Cordero silver
project in Chihuahua State, Mexico. The 37,000-hectare property
covers an entire porphyry district that hosts the announced
resource and numerous exploration targets for bulk tonnage
diatreme-hosted, porphyry-style, and carbonate replacement
deposits. In addition, Discovery is focused on discovering and
advancing multiple high-grade carbonate replacement-style
silver-zinc-lead projects in a land package of approximately
150,000 hectares in Coahuila State, Mexico. The land holdings
contain numerous historical direct-ship ore workings and
significant underground development, but no drill-testing has ever
been carried out on them.
For Further Information:
Discovery Metals Corp.(416) 613-9410info@dsvmetals.com
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the Exchange) accepts responsibility for the adequacy
or accuracy of this release.
This news release does not constitute an offer
to sell or a solicitation of an offer to buy nor shall there be any
sale of any of the securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful, including any of the
securities in the United States of America. The securities have not
been and will not be registered under the United States Securities
Act of 1933, as amended (the “1933 Act”) or any
state securities laws and may not be offered or sold within the
United States or to, or for account or benefit of, U.S. Persons (as
defined in Regulation S under the 1933 Act) unless registered under
the 1933 Act and applicable state securities laws, or an exemption
from such registration requirements is available.
This news release may include forward-looking
statements that are subject to inherent risks and uncertainties.
All statements within this news release, other than statements of
historical fact, are to be considered forward looking. Although
Discovery believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and actual
results or developments may differ materially from those described
in forward-looking statements. Factors that could cause actual
results to differ materially from those described in
forward-looking statements include fluctuations in market prices,
including metal prices, continued availability of capital and
financing, and general economic, market or business conditions.
There can be no assurances that such statements will prove accurate
and, therefore, readers are advised to rely on their own evaluation
of such uncertainties. There can be no assurance that the Private
Placement will close on the announced terms. Discovery does not
assume any obligation to update any forward-looking statements
except as required under applicable laws.
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