Discovery Metals Announces $35 Million Private Placement with $15 Million Investment from Eric Sprott
July 24 2020 - 8:04AM
Discovery Metals Corp. (TSXV: DSV; OTCQX:
DSVMF) (“Discovery” or “the Company”) is pleased to
announce that it has arranged a non-brokered institutional private
placement (the “
Private Placement”) to raise
C$35,000,000 through the issuance of 25,925,925 units
(“
Units”) at a price of C$1.35 per Unit,
representing a premium to its last closing price. Each Unit is
comprised of one common share of Discovery (“
Common
Share”) and one half of one Common Share purchase warrant,
with each full warrant exercisable at C$1.75 for a period of two
years after the date of issuance.
Mr. Eric Sprott has agreed to invest
C$15,000,000 in the Private Placement, on the acquisition of
11,111,111 Units. This investment will result in Mr. Sprott holding
approximately 27.1% of Discovery’s issued and outstanding Common
Shares, post-closing on an undiluted basis.
Mr. Eric Sprott commented, “Discovery provides
unmatched leverage to a rising silver price and I am very
encouraged to see the Discovery team continue to execute on their
plans at the Cordero project. I have continually grown my position
in the Company and it is now one of my largest investments in the
silver space.”
Taj Singh, Discovery’s President and CEO stated:
“We are very pleased with the continued support of our largest
shareholders which recognizes the exceptional exposure Cordero
offers to increasing silver prices. Recent drill results show that
our 100%-owned Cordero project is developing all the attributes of
a tier 1 project – grade, scale, significant organic growth
opportunities and well located in one of Mexico’s premier mining
belts. The current financing, priced at a premium to market,
reflects strong institutional demand, and will create an industry
leading balance sheet with over C$75 million in cash allocated for
aggressive exploration, resource expansion, and future
development.”
The proceeds of the Private Placement will be
used primarily to fund Discovery’s continuing exploration program
at its Cordero project and its Coahuila projects. A portion of the
proceeds will be used for general working capital and business
development purposes.
Discovery anticipates that certain insiders will
acquire securities in the Private Placement. To the extent such
insiders participate in the Private Placement, any such
participation would be considered a “related party transaction” as
defined under Multilateral Instrument 61-101.
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. Clarus
Securities Inc., Eight Capital, Sprott Capital Partners LP are
acting as finders for North American investors and Arlington Group
Asset Management Limited are acting as finders for European
investors on the Private Placement. 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 TSX Venture Exchange approval.
On Behalf of the Board of Directors,
Taj Singh, M.Eng., P.Eng., CPAPresident, Chief
Executive Officer, and Director
About DiscoveryDiscovery Metals
Corp. (TSX-V: DSV, OTCQX: DSVMF) is a Canadian exploration and
development company headquartered in Toronto, Canada, and focused
on historic mining districts in Mexico. Discovery’s flagship is its
100%-owned Cordero silver project in Chihuahua State, Mexico. The
35,000-hectare property covers a large district that hosts the
announced resource as well as numerous exploration targets for bulk
tonnage diatreme-hosted, porphyry-style, and carbonate replacement
deposits.
For further information contact:
Forbes Gemmell, CFAVP Corporate
Development & Investor
Relationsforbes.gemmell@dsvmetals.com
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
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.
Cautionary Note Regarding Forward-Looking
Statements
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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