Discovery Metals Corp. (“
Discovery”) (TSXV: DSV)
is pleased to announce that it has closed its non-brokered private
placement (the “
Private Placement”) of 38,911,108
common shares (“
Common Shares”) at a price of
$0.45 per Common Share and 3,311,111 subscription receipts
(“
Subscription Receipts”) at a price of $0.45 per
Subscription Receipt, for aggregate proceeds of $19,000,000.
Announced on October 10, 2019, the Private Placement was
oversubscribed due to investor demand.
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.
Mr. Eric Sprott, through 2176423 Ontario Ltd. (a
corporation which is beneficially owned by him), acquired 7,800,000
Common Shares and 3,311,111 Subscription Receipts in the Private
Placement, for a total investment of $5,000,000. Prior to the
closing of the Private Placement, Mr. Sprott owned 33,499,000
Common shares of Discovery representing 19.9% of the interest of
Discovery on a non-diluted basis. Through the purchase of Common
Shares in the Private Placement, Mr. Sprott maintains approximately
19.9% interest in Discovery. The Subscription Receipts, if
converted and subject to the Approvals, will result in Mr. Sprott
becoming a “Control Person” and will bring the balance of his
interest in the Company to approximately 21%.
In connection with the Private Placement,
Discovery will hold a special meeting of its shareholders on
December 11, 2019, to approve Mr. Sprott becoming a “Control
Person” and to address any further business that may properly come
before the meeting. Details of the meeting, including its record
date, location, and time, can be found in the Notice of Meeting
published on Discovery’s SEDAR profile at www.sedar.com.
Taj Singh, President and CEO of Discovery
commented, “We are excited to have closed this second financing of
2019 and we welcome Mr. Sprott’s continued support as our largest
shareholder as well as the support from our new expanded European
investor base. The increased demand for the offering demonstrates
improved market sentiment and also investor confidence in our
future business plans. Discovery is now solidly financed and is
well-positioned to aggressively explore and develop its
district-scale silver-rich projects in a rallying precious metals
price environment.”
Discovery has paid finders’ and advisory fees of
$972,450 in cash and issued 1,063,833 broker warrants with an
exercise price of $0.50 and a 24-month expiry to certain arms’
length parties who introduced Discovery to investors, in accordance
with the policies of the TSX Venture Exchange. The securities
issued on closing of the Private Placement are subject to a
statutory hold period expiring four months and one day after their
date of issuance.
The Common Shares and Subscription Receipts were
acquired by Mr. Sprott through 2176423 Ontario Ltd. for investment
purposes. Mr. Sprott has a long-term view of the investment and may
acquire additional securities of the Company including on the open
market or through private acquisitions or sell securities of the
Company including on the open market or through private
dispositions in the future depending on market conditions,
reformulation of plans and/or other relevant factors. A copy of
2176423 Ontario Ltd.’s early warning report will appear on
Discovery's profile on SEDAR and may also be obtained by calling
(416) 362-7172 (200 Bay Street, Suite 2600, Royal Bank Plaza, South
Tower, Toronto, Ontario, M5J 2J1).
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
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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