Golden Tag Resources Ltd. (“
Golden Tag” or the
"
Company") (TSX.V: GOG) is pleased to announce
that the Company has closed the non-brokered private placement
offering (the “
Private Placement”, or
“
Financing”) announced on July 28, 2020. The
Company issued 25,000,000 Units and the Financing was
oversubscribed, for aggregate gross proceeds of $7.0 Million.
Mr. Eric Sprott, through 2176423 Ontario Ltd., a corporation
beneficially controlled by him, subscribed for 42.8% or 10,700,550
Units in the Private Placement.
Greg McKenzie, President and CEO commented, "We
are pleased with the overwhelming support in this capital raise and
are keen to move forward with the advancement of the Company’s 100%
owned San Diego Project, as well as other strategic
opportunities. Our strong balance sheet places the Company in
a position to evaluate opportunities that can sometimes be
unavailable to junior companies. Also, we would like to
welcome Mr. Dwayne Melrose to our board of directors, replacing
David Rigg who stepped down at the annual general meeting held on
August 4, 2020. We thank David for his contributions as a
valuable board member for many years including being instrumental
in the discovery of the Fernadez Zone at San Diego."
Board Appointment
On August 4, 2020, Mr. Dwayne Melrose was
elected to the Company’s board of directors, replacing David
Rigg. Mr. Melrose has over 30 years of international
experience ranging from senior management, mine finance and
permitting, mine development and exploration in Central Asia,
China, Africa, and North and South America. He was former
President and CEO of True Gold Mining, where the company progressed
from pre-PEA and Bankable Feasibility Study thru to a completely
financed and permitted project that went into construction in under
4 years. As former President and CEO of Gold Reach Resources, he
took the company through to completion of a positive PEA on the
company’s copper project. He joined Minco Silver as VP of
Exploration in China, pre-PEA through Bankable Feasibility Study
and was part of the team which was awarded the China Mining
Explorer of the Year. As the Exploration Manager at the
Kumtor Gold Mine in Kyrgyzstan, he was instrumental in the
discovery of the high grade SB Zone as mine reserves increased by
+7 M oz.
The Private Placement
Each Unit was priced at $0.28 and consists of
one (1) common share in the capital of the Company (“Common
Share”) and one-half of one (0.5) Common Share purchase
warrant (each whole warrant, a “Warrant”).
Each Warrant shall entitle the holder thereof to acquire one (1)
Common Share at a price of C$0.40 for 24 months following the
closing of the Private Placement, whereupon the Warrants expire.
The Warrants contain an acceleration provision whereby if the
closing price of the Common Shares on the TSX Venture Exchange is
$0.70 or more for 10 consecutive trading days the Company will have
the right to accelerate the expiry date of the Warrants (the
“Acceleration Provision”).
In connection with the Private Placement,
eligible finders, including Red Cloud Securities Inc., PI Financial
Corp., PowerOne Capital Markets Limited, Canaccord Genuity Corp.
and Haywood Securities Inc., were paid an aggregate cash commission
of C$345,756 and an aggregate of 1,198,130 finder's warrants (the
“Finder’s Warrants”). Each Finder’s Warrant shall
entitle the holder thereof to acquire one (1) Common Share at a
price of C$0.28 for 24 months following the closing of the Private
Placement, subject to the Acceleration Provision.
The securities issued and issuable pursuant to
the Financing will be subject to a four month and one day hold
period. The Company intends to use the net proceeds of the
Financing to fund advancement of the Company’s 100% owned San Diego
Project, in Durango Mexico, and for working capital and general
corporate purposes.
The Private Placement remains subject to TSX
Venture Exchange (the “TSXV”) final
acceptance.
Additional Mandated Disclosure
Respecting Mr. Sprott’s Investment in the Company
Eric Sprott, through 2176423 Ontario Ltd., a
corporation which is beneficially owned by him, acquired 10,700,550
Units pursuant to the Private Placement. After closing of the
Private Placement, Mr. Sprott now beneficially owns or controls
29,326,482 Common Shares and 13,628,075 Common Share purchase
warrants representing approximately 18.6% on a non-diluted basis
and 25.2% on a partially diluted basis assuming exercise of all
pre-existing warrants. Prior to the Offering, Mr. Sprott
beneficially owned or controlled 18,625,932 Common Shares and
8,277,800 Common Share purchase warrants. Mr. Sprott has
signed an undertaking not to exercise his warrants until such time
as the Company can obtain disinterested shareholder approval of the
creation of a new control person, which is required once Mr. Sprott
passes the 20% ownership threshold. The Company has agreed to call
a shareholders’ special meeting within 6 months of the closing of
the Private Placement, at which time such approval will be
sought.
The Units 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 the Company'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).
Mr. Sprott is an insider of the Company and as
such, his participation in connection with the Private Placement is
a related-party transaction under the policies of the TSXV and
Multilateral Instrument 61-101 -- Protection of Minority Security
Holders in Special Transactions (“MI 61-101”). The
Company is relying on exemptions from the minority shareholder
approval and formal valuation requirements applicable to the
related-party transactions under sections 5.5(a) and 5.7(1)(a),
respectively, of MI 61-101, as neither the fair market value of the
shares to be purchased on behalf of Mr. Sprott nor the
consideration to be paid by him exceeds 25% of the Company's market
capitalization. The Company did not file a material change report
in respect of the related-party transaction at least 21 days prior
to the closing of the Private Placement, which the Company deems
reasonable in the circumstances so as to be able to avail itself of
the proceeds of the Private Placement in an expeditious manner.
About Golden Tag Resources
Golden Tag Resources Ltd. is a junior
exploration company exploring for high-grade silver deposits. The
Company holds a 100% interest in the San Diego property in Durango
State, Mexico. The San Diego property is located within the
Velardeña Mining District, the site of several mines having
produced silver, zinc, lead and gold over the past century. For
more information regarding the San Diego property please visit our
website at www.goldentag.ca. Golden Tag has no debt and is well
funded with cash balances of approximately $9.0 million.
For additional information, please contact:
Greg McKenzie, President & CEOPh:
416-504-2024Email: info@goldentag.cawww.goldentag.ca
Cautionary Statement:
Neither the TSXV nor its Regulation Services
Provider (as that term is defined in the policies of the TSXV)
accepts responsibility for the adequacy or accuracy of this news
release.
Certain statements in this news release are
forward-looking and involve a number of risks and uncertainties.
Such forward-looking statements are within the meaning of the
phrase ‘forward-looking information’ in the Canadian Securities
Administrators’ National Instrument 51-102 – Continuous Disclosure
Obligations. Forward-looking statements are not comprised of
historical facts. Forward-looking statements include estimates and
statements that describe the Company’s future plans, objectives or
goals, including words to the effect that the Company or management
expects a stated condition or result to occur. Forward-looking
statements may be identified by such terms as “believes”,
“anticipates”, “expects”, “estimates”, “may”, “could”, “would”,
“will”, or “plan”. Since forward-looking statements are based on
assumptions and address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Although
these statements are based on information currently available to
the Company, the Company provides no assurance that actual results
will meet management’s expectations. Risks, uncertainties and other
factors involved with forward-looking information could cause
actual events, results, performance, prospects and opportunities to
differ materially from those expressed or implied by such
forward-looking information. Forward looking information in this
news release includes, but is not limited to, the Company’s
intentions regarding its objectives, goals or future plans and
statements. Factors that could cause actual results to differ
materially from such forward-looking information include, but are
not limited to: the ability to predict and counteract the effects
of COVID-19 on the business of the Company, including but not
limited to the effects of COVID-19 on the price of commodities,
capital market conditions, restriction on labour and international
travel and supply chains; failure to identify mineral
resources; failure to convert estimated mineral resources to
reserves; the inability to complete a feasibility study which
recommends a production decision; the preliminary nature of
metallurgical test results; delays in obtaining or failures to
obtain required governmental, environmental or other project
approvals; political risks; changes in equity markets;
uncertainties relating to the availability and costs of financing
needed in the future; the inability of the Company to budget and
manage its liquidity in light of the failure to obtain additional
financing; inflation; changes in exchange rates; fluctuations in
commodity prices; delays in the development of projects; capital,
operating and reclamation costs varying significantly from
estimates and the other risks involved in the mineral exploration
and development industry; and those risks set out in the Company’s
public documents filed on SEDAR. Although the Company believes that
the assumptions and factors used in preparing the forward-looking
information in this news release are reasonable, undue reliance
should not be placed on such information, which only applies as of
the date of this news release, and no assurance can be given that
such events will occur in the disclosed time frames or at all. The
Company disclaims any intention or obligation to update or revise
any forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by
law. No stock exchange, securities commission or other
regulatory authority has approved or disapproved the information
contained herein.
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