NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES
OR DISSEMINATION IN THE UNITED
STATES
VANCOUVER, BC, June 30,
2022 /CNW/ - Montage Gold
Corp. ("Montage" or the "Company") (TSXV: MAU) is pleased
to announce the closing of its previously announced private
placement offering of 28,571,429 subscription receipts (each a
"Subscription Receipt") at an issue price of $0.70 per Subscription Receipt for gross proceeds
of approximately $20,000,000 (the "Offering"). The Offering
was led by Stifel GMP, as lead underwriter, on behalf of a
syndicate of underwriters including Beacon Securities Limited, BMO
Capital Markets, and Raymond James Ltd. (collectively, the
"Underwriters").
Each Subscription Receipt is convertible into one common share
in the capital of the Company (each, a "Common Share") upon the
completion of certain Escrow Release Conditions (as defined below).
The Company shall pay the Underwriters a cash fee equal to 4.0% of
the aggregate purchase price of the Subscription Receipts sold
under the Offering (other than the subscribers that were on the
president's list) (the "Underwriting Fee").
The proceeds raised from the Offering will be used to pay
the cash portion of the consideration payable pursuant to the
proposed acquisition of a 100% interest (the "Transaction") in the
Mankono-Sissédougou Joint Venture Project, which consists of three
properties contiguous to the Company's Koné Gold Project in Côte
d'Ivoire, and to fund the business plan of the Company in respect
of such acquired properties following closing of the
Transaction.
The gross proceeds from the sale of the Subscription Receipts,
less 25% of the Underwriting Fee and expenses related to the
Offering were deposited and will be held in escrow by Endeavor
Trust Corporation, as subscription receipt agent, pending the
satisfaction or waiver of the Escrow Release Conditions, all in
accordance with the terms of the subscription receipt agreement
entered into among the Company, Stifel GMP, on behalf of the
Underwriters, and Endeavor Trust Corporation (the "SRA").
The proceeds will be released from escrow, upon notice to
Endeavor Trust Corporation on or prior to 5:00 pm (Toronto
time) on December 7, 2022 (the
"Termination Date"), if (i) all required regulatory approvals in
connection with the Offering and the Transaction have been
received, and (ii) all material conditions precedent to the
Transaction other than payment of the consideration therefor and
other conditions that can only occur upon closing have been
completed or satisfied (collectively, the "Escrow Release
Conditions"). In the event that the Escrow Release Conditions
are not met by the Termination Date, the escrowed proceeds held by
Endeavor Trust Corporation will be returned to the Subscription
Receiptholders on a pro rata basis and the Subscription
Receipts will be cancelled.
While held in escrow, the proceeds from the sale of the
Subscription Receipts will accrue interest for the benefit of the
Subscription Receiptholders as follows:
- 10.0% per annum, payable in cash (the "Cash Interest") on the
earlier of (i) the satisfaction of the Escrow Release Conditions;
and (ii) the Termination Date or such earlier date if the Escrow
Release Conditions will not be met in accordance with the SRA;
and
- 6.0% per annum payable in cash (the "Bonus Interest"), on the
two month anniversary following the date hereof and each subsequent
two month anniversary of the prior Bonus Interest payment date
(each such two month period a "Bi-Monthly Period") until the
earlier of (i) the satisfaction of the Escrow Release Conditions;
and (ii) the Termination Date or such earlier date if the Escrow
Release Conditions will not be met in accordance with the SRA. For
certainty, no interest shall accrue in accordance with the
foregoing and no Bonus Interest shall be payable for any partial
Bi-Monthly Period.
The Bonus Interest will be paid to the Subscription
Receiptholders in lieu of the "Interest Shares" as announced in the
press release of the Company dated June 8,
2022. The settlement of such interest owing to Subscription
Receiptholders in cash rather than through the issuance of Common
Shares was required by the TSX Venture Exchange (the "TSX-V") and
accordingly necessary in order to obtain the conditional approval
of the TSX-V in respect of the Offering. The interest rate and
payment period for the interest payable remains the same as
previously announced.
The Subscription Receipts will not be listed on any stock
exchange, though the Company has received the conditional approval
of the TSX-V to list the Common Shares issuable upon conversion of
the Subscription Receipts on the TSX-V.
Insiders of the Company participated in the Offering. Pursuant
to Multilateral Instrument 61-101 Protection of Minority
Security Holders in Special Transactions ("MI 61-101"), the
Offering constitutes a "related party transaction" given the fact
insiders of the Company subscribed for Subscription Receipts. The
Company is relying on exemptions from the formal valuation and
minority approval requirements of MI 61-101, specifically: (i) the
valuation requirement of MI 61-101 by virtue of the exemption
contained in Section 5.5(b), as the Common Shares are not listed on
a market specified in MI 61-101, and (ii) the minority shareholder
approval requirement of MI 61-101 by virtue of the exemption
contained in Section 5.7(1)(a) of MI 61- 101, as the fair market
value of the Subscription Receipts and the interest on the
Subscription Receipts being issued and paid do not exceed 25% of
the Company's market capitalization (as determined under MI
61-101). A material change report was not filed by the Company at
least 21 days before the closing of the Offering, as the Company
was seeking to close expeditiously to confirm funds for the
Transaction. In the view of the Company, this approach is
reasonable in the circumstances. The Offering was approved by
all of the independent directors of the Company.
The Subscription Receipts and any underlying Common Shares are
subject to a four-month and one day hold period under applicable
Canadian securities laws ending on October
31, 2022.
The Subscription Receipts and the underlying Common Shares have
not been, and will not be, registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act"), or
any U.S. state securities laws, and may not be offered or sold to,
or for the account or benefit of, persons in the "United States" (as such term is defined
in Regulation S under the U.S. Securities Act) absent registration
under the U.S. Securities Act and all applicable state securities
laws or compliance with the requirements of an exemption therefrom.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy securities to, or for the account
or benefit of, persons in the United
States, nor will there be any sale of these securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful.
ABOUT MONTAGE GOLD CORP.
Montage is a Canadian-based
precious metals exploration and development company focused on
opportunities in Côte d'Ivoire. The Company's flagship property is
the Koné Gold Project, located in northwest Côte d'Ivoire, which
currently hosts a Probable Mineral Reserve of 161.1Mt grading
0.66g/t for 3.42M ounces of gold. The
Company released the results of a definitive feasibility study (the
"DFS") on the Koné Gold Project on February
14, 2022, outlining a 15-year gold project producing
3.06M ounces of gold with average
annual production of 207koz, and peak production of 320koz. Montage
has a management team and Board with significant experience in
discovering and developing gold deposits in Africa.
TECHNICAL DISCLOSURE
The mineral reserve estimate for
the Koné Gold Project was carried out by Ms. Joeline McGrath of Carci Mining Consultants Ltd.
who is considered to be independent of Montage. Ms. McGrath is a
member in good standing of the Australian Institute of Mining and
Metallurgy and has sufficient experience which is relevant to the
work which she is undertaking to qualify as a Qualified Person
under National Instrument 43–101 ("NI 43-101"). The DFS was
prepared by Lycopodium Minerals Pty Ltd. and incorporates the work
of Lycopodium and Specialist Consultants, under the supervision of
Sandy Hunter, MAusIMM(CP), of
Lycopodium, a Qualified Person pursuant to NI 43-101 who is
independent of Montage.
For further details of the data verification undertaken,
exploration undertaken and associated QA/QC programs, and the
interpretation thereof, and the assumptions, parameters and methods
used to develop the mineral reserve estimate for the Koné Gold
Project, please see the DFS, entitled "Koné Gold Project, Côte
d'Ivoire Definitive Feasibility Study National Instrument 43-101
Technical Report" and filed on SEDAR at www.sedar.com. Readers are
encouraged to read the DFS in its entirety, including all
qualifications, assumptions and exclusions that relate to the
details summarized in this news release. The DFS is intended to be
read as a whole, and sections should not be read or relied upon out
of context.
The technical contents of this press release have been approved
by Hugh Stuart, BSc, MSc, a
Qualified Person pursuant to NI 43-101. Mr. Stuart is the
Chief Executive Officer of the Company, a Chartered Geologist and a
Fellow of the Geological Society of London. Mr. Stuart is not independent of
Montage as he is an officer, director and shareholder of
Montage.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking information
and forward-looking statements within the meaning of Canadian
securities legislation (collectively, "Forward-looking
Statements"). All statements, other than statements of historical
fact, constitute Forward-looking Statements. Words such as "will",
"intends", "proposed" and "expects" or similar expressions are
intended to identify Forward-looking Statements. Forward looking
Statements in this press release include statements related to the
timing of closing of the Transaction, payment of the Cash Interest
and any Bonus Interest, the satisfaction of the Escrow Release
Conditions, the proposed use of proceeds from the Offering, the
Company's resource properties and resource estimates, and the
Company's plans, focus and objectives. Forward-looking Statements
involve various risks and uncertainties and are based on certain
factors and assumptions, including those set out in the DFS. There
can be no assurance that such statements will prove to be accurate,
and actual results and future events could differ materially from
those anticipated in such statements. Important factors that could
cause actual results to differ materially from the Company's
expectations include uncertainties related to fluctuations in gold
and other commodity prices, uncertainties inherent in the
exploration of mineral properties, the impact and progression of
the COVID-19 pandemic and other risk factors set forth in the
Company's continuous disclosure documents filed from time to time
on SEDAR. The Company undertakes no obligation to update or revise
any Forward-looking Statements, whether as a result of new
information, future events or otherwise, except as may be required
by law. New factors emerge from time to time, and it is not
possible for Montage to predict all of them, or assess the impact
of each such factor or the extent to which any factor, or
combination of factors, may cause results to differ materially from
those contained in any Forward-looking Statement. Any
Forward-looking Statements contained in this press release are
expressly qualified in their entirety by this cautionary
statement.
SOURCE Montage Gold Corp