Labrador Gold Corp. (TSX.V:LAB | OTCQX:NKOSF | FNR: 2N6) (“LabGold”
or the “Company”) is pleased to announce that it has closed a
non-brokered private placement of 16,666,667 working capital units
(the “WC units”) at a price of $0.90 per unit (the “WC Offering”)
for gross proceeds to LabGold of $15 million. New Found Gold Corp.
(as to 5,555,556 WC units) and Mr. Eric Sprott (as to 11,111,111 WC
units) purchased the WC units with each WC unit consisting of one
common share and one half a share purchase warrant, with each full
warrant exercisable to acquire a Common Share at $1.05 until May
18, 2023.
“I am very pleased that Mr. Sprott and New Found Gold have
decided to increase their positions in LabGold. Their participation
in this financing at a premium to market tells me they are very
bullish on the potential of our Kingsway Project and like what our
technical team is doing,” said Roger Moss, President and CEO of the
Company. “I certainly appreciate their commitment to funding our
exploration efforts which I expect to pay off soon. We continue to
aggressively drill Big Vein guided by the initial results announced
last week and will deploy additional funds to drilling as we aim to
make the next discovery in the Gander gold district.”
The proceeds of the WC Offering will be
primarily used to fund the Company’s exploration program at its
Kingsway project in Newfoundland. The securities issued are subject
to a statutory hold period expiring on September 19, 2021.
Mr. Eric Sprott, through
2176423 Ontario Ltd., a corporation which is beneficially
owned by him, acquired 11,111,111 WC units under the WC
Offering for total consideration of $9,999,999.90. Prior to the WC
Offering, Mr. Sprott beneficially owned or controlled
7,000,000 Common Shares and 3,500,000 Warrants of the
Company. As a result of the WC Offering, Mr. Sprott
beneficially owns and controls 18,111,111 Common Shares of the
Company and 9,055,555 Warrants representing approximately 12.4% of
the issued and outstanding Common Shares of the Company on a
non-diluted basis and approximately 17.5% on a fully diluted basis
assuming exercise of the Warrants.
The WC units were acquired by Mr. Sprott 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 factors that Mr.
Sprott considers relevant from time to time.
A copy of Mr. Sprott’s early warning report will
appear on Labrador Gold’s profile on SEDAR and may also be obtained
by calling Mr. Sprott’s office at (416) 945-3294 (200 Bay
Street, Suite 2600, Royal Bank Plaza,
South Tower, Toronto, Ontario M5J 2J1).
New Found Gold acquired 5,555,556 WC
units under the WC Offering for total consideration of
$5,000,000.40. Prior to the WC Offering, New
Found beneficially owned or controlled 7,000,000 Common Shares
and 3,500,000 Warrants of the Company. As a result of the WC
Offering, New Found owns and controls 12,555,556 Common Shares
of the Company and 6,277,778 Warrants representing approximately
8.6% of the issued and outstanding Common Shares of the Company on
a non-diluted basis and approximately 12.3% on a partially-diluted
basis assuming exercise of the Warrants.
The WC units were acquired by New Found for
investment purposes. New Found 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 factors that New
Found considers relevant from time to time.
Big Vein Target
The Big Vein target is an auriferous quartz vein
exposed at surface that has been traced over 400 metres to date.
Gold mineralization observed at Big Vein includes six occurrences
of visible gold, assays of samples from which range from 1.87g/t to
1,065g/t gold. The visible gold is typically hosted in annealed and
vuggy gray quartz, that is locally stylolitic with vugs often
containing euhedral quartz infilling features characteristic of
epizonal gold deposits. A 20,000 metre drill program currently in
progress is off to an encouraging start with the first two holes
intersecting gold mineralization in two zones of significant quartz
veining and sulphide mineralization including arsenopyrite, pyrite
and possible boulangerite noted along vein margins and as strong
disseminations in the surrounding wall rocks.
Roger Moss, PhD., P.Geo., President and CEO of LabGold, a
Qualified Person in accordance with Canadian regulatory
requirements as set out in NI 43-101, has read and approved the
scientific and technical information that forms the basis for the
disclosure contained in this release.
The Company gratefully acknowledges the
Newfoundland and Labrador Ministry of Natural Resources’ Junior
Exploration Assistance (JEA) Program for its financial support for
exploration of the Kingsway property.
About Labrador GoldLabrador Gold is a Canadian
based mineral exploration company focused on the acquisition and
exploration of prospective gold projects in Eastern Canada.
In early March 2020, Labrador Gold acquired the
option to earn a 100% interest in the Kingsway project in the
Gander area of Newfoundland. The three licenses comprising the
Kingsway project cover approximately 16km of the Appleton fault
zone which is associated with gold occurrences in the region,
including the New Found Gold discovery. Infrastructure in the area
is excellent located just 18km from the town of Gander with road
access to the project, nearby electricity and abundant local water.
LabGold recently began a 10,000 metre diamond drill program
targeting high grade gold mineralization associated with the
visible gold showing at Big Vein. Following the closing of the
Financing the Company has approximately $20 million in working
capital.
The Hopedale property covers much of the Hunt
River and Florence Lake greenstone belts that stretch over 80 km.
The belts are typical of greenstone belts around the world but have
been underexplored by comparison. Initial work by Labrador Gold
during 2017 show gold anomalies in soils and lake sediments over a
3 kilometre section of the northern portion of the Florence Lake
greenstone belt in the vicinity of the known Thurber Dog gold
showing where grab samples assayed up to 7.8g/t gold. In addition,
anomalous gold in soil and lake sediment samples occur over
approximately 40 kilometres along the southern section of the
greenstone belt (see news release dated January 25th 2018 for more
details). Labrador Gold now controls approximately 57km strike
length of the Florence Lake Greenstone Belt.
The Ashuanipi gold project is located just 35 km
from the historical iron ore mining community of Schefferville,
which is linked by rail to the port of Sept Iles, Quebec in the
south. The claim blocks cover large lake sediment gold anomalies
that, with the exception of local prospecting, have not seen a
systematic modern day exploration program. Results of the 2017
reconnaissance exploration program following up the lake sediment
anomalies show gold anomalies in soils and lake sediments over a 15
kilometre long by 2 to 6 kilometre wide north-south trend and over
a 14 kilometre long by 2 to 4 kilometre wide east-west trend. The
anomalies appear to be broadly associated with magnetic highs and
do not show any correlation with specific rock types on a regional
scale (see news release dated January 18th 2018). This suggests a
possible structural control on the localization of the gold
anomalies. Historical work 30 km north on the Quebec side led to
gold intersections of up to 2.23 grams per tonne (g/t) Au over
19.55 metres (not true width) (Source: IOS Services
Geoscientifiques, 2012, Exploration and geological reconnaissance
work in the Goodwood River Area, Sheffor Project, Summer Field
Season 2011). Gold in both areas appears to be associated with
similar rock types.
The Company has 146,384,921 common shares issued
and outstanding and trades on the TSX Venture Exchange under the
symbol LAB.
For more information please contact:
Roger Moss, President and
CEO Tel: 416-704-8291
Or visit our website
at: www.labradorgold.com
Twitter: @LabGoldCorp
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.
Forward-Looking
Statements: This news release contains
forward-looking statements that involve risks and uncertainties,
which may cause actual results to differ materially from the
statements made. When used in this document, the words “may”,
“would”, “could”, “will”, “intend”, “plan”, “anticipate”,
“believe”, “estimate”, “expect” and similar expressions are
intended to identify forward-looking statements. Such statements
reflect our current views with respect to future events and are
subject to risks and uncertainties. Many factors could cause our
actual results to differ materially from the statements made,
including those factors discussed in filings made by us with the
Canadian securities regulatory authorities. Should one or more of
these risks and uncertainties, such as actual results of current
exploration programs, the general risks associated with the mining
industry, the price of gold and other metals, currency and interest
rate fluctuations, increased competition and general economic and
market factors, occur or should assumptions underlying the forward
looking statements prove incorrect, actual results may vary
materially from those described herein as intended, planned,
anticipated, or expected. We do not intend and do not assume any
obligation to update these forward-looking statements, except as
required by law. Shareholders are cautioned not to put undue
reliance on such forward-looking statements.
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