Discovery Metals Corp. (“
Discovery”) (TSXV: DSV;
OTCQX: DSVMF) is pleased to announce that it has closed the
non-brokered private placement (the “
Private
Placement”), consisting of 25,927,000 units
(“
Units”) at a price of C$1.35 per Unit for
aggregate proceeds of C$35,001,450. 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
(a “
Warrant”) exercisable at C$1.75 for a period
of two years after the date of issuance, expiring on August 7,
2022. Discovery announced the Private Placement on July 24, 2020.
Mr. Eric Sprott, through 2176423 Ontario Ltd. (a
corporation which is beneficially owned by him), acquired
11,111,000 Units (composed of 11,111,000 Common Shares and
5,555,500 Warrants) in the Private Placement, for a total
investment of C$14,999,850. Prior to the closing of the Private
Placement, Mr. Sprott owned 66,025,611 Common shares of Discovery
representing approximately 24.8% of the interest of Discovery on a
non-diluted basis or 27.2% on a partially diluted basis, assuming
the exercise of all Warrants held by Mr. Sprott. Through the
purchase of Common Shares and Warrants in the Private Placement,
Mr. Sprott will own approximately 26.4% interest in Discovery on a
non-diluted basis or 29.9% on a partially diluted basis assuming
the exercise of Warrants held by Mr. Sprott.
Taj Singh, President and CEO of Discovery
commented: “With over $80 million of cash on our balance sheet
we are in a formidable position to continue to drive value through
aggressive exploration, resource growth and future development, and
to solidify our position as one of the premier names in the silver
space.”
Discovery has paid finders’ and advisory fees of
C$1,763,848 in cash, 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 on
December 8, 2020.
Including the subscription by 2176423 Ontario
Ltd., certain insiders of Discovery have acquired an aggregate of
14,611,000 Common Shares and 7,305,500 Warrants in the Private
Placement, and as such the Private Placement is considered a
“related party transaction” as defined under Multilateral
Instrument 61-101. Discovery has relied on exemptions from the
valuation and minority shareholder approval requirements of MI
61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in
respect of the insiders’ participation in the Private Placement, as
the Private Placement does not exceed 25% of the Company's market
capitalization.
The Common Shares and Warrants 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) 945-3294 (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 Cordero project and its Coahuila projects. A portion of the
proceeds will be used for general working capital and business
development purposes.
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.
On Behalf of the Board of Directors,
Taj Singh, M.Eng, P.Eng, CPA President, CEO and
Director
For Further Information contact:
Forbes Gemmell, CFA VP Corporate Development
& Investor Relations forbes.gemmell@dsvmetals.com
Not for distribution to United States newswire
services or for dissemination in the United States
Neither the TSX Venture Exchange (the
“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.
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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