West Red Lake Gold Mines Ltd. (“
West Red
Lake” or the “
Company”)
(TSXV:
WRLG) is pleased to announce, further to its news release
dated April 17, 2023, the closing of the previously announced
bought deal financing of 70,829,000 subscription receipts (the
“
Subscription Receipts”) of West Red Lake, at a
price of $0.35 per Subscription Receipt (the “
Issue
Price”), together with 600,000 common shares of West Red
Lake (the “
Concurrent Shares”) at
the Issue Price, for aggregate gross proceeds of $25,000,150 (the
“
Offering”). The Offering was led by Canaccord
Genuity Corp., as sole underwriter (the
"
Underwriter"), and included exercise of the
Underwriter’s over-allotment option granted in connection with the
Offering.
The Offering was conducted in connection with
the previously announced acquisition (the
“Acquisition”), whereby the Company will acquire
the Madsen Gold Project through the acquisition of all of the
issued and outstanding shares of Pure Gold Mining Inc.
(“Pure Gold”), subject to, among other things,
approval of the British Columbia Supreme Court in Pure Gold’s
ongoing proceedings pursuant to the Companies Creditors Arrangement
Act.
The Subscription Receipts were issued pursuant
to a subscription receipt agreement (the “Subscription
Receipt Agreement”) entered into among the Company, the
Underwriter, and Odyssey Trust Company as subscription receipt
agent. Pursuant to the Subscription Receipt Agreement, the gross
proceeds of the Offering, less the proceeds received from the sale
of the Concurrent Shares (the “Escrowed Funds”),
will be held in escrow pending satisfaction of certain conditions,
including but not limited to the satisfaction of certain conditions
precedent to completion of the Acquisition (the “Escrow
Release Conditions”). Upon satisfaction of the Escrow
Release Conditions, each Subscription Receipt will automatically
convert, for no additional consideration, into one common share of
the Company (“Underlying Shares”), subject to
adjustments. If the Escrow Release Conditions have not been
satisfied on or prior to August 7, 2023, subject to an extension by
the Underwriter, the holders of Subscription Receipts will be
returned a cash amount equal to the aggregate Issue Price of the
Subscription Receipts and any interest that has been earned on the
Escrowed Funds.
Upon satisfaction of the Escrow Release
Conditions, the net proceeds received by the Company from sale of
the Subscription Receipts and Concurrent Shares will be used to
satisfy the initial cash consideration payable in connection with
the Acquisition and for working capital purposes.
Certain insiders of the Company acquired
Subscription Receipts pursuant to the Offering and as such a
portion of the Offering is considered a related party transaction
with the meaning of TSX Venture Exchange (“TSXV”)
Policy 5.9 and Multilateral Instrument 61-101 Protection of
Minority Security Holders in Special Transactions (“MI
61-101”). The Company is relying upon the exemption from
the formal valuation and minority shareholder approval requirements
of MI 61-101 as neither the fair market value of the shares
subscribed for, nor the consideration paid for the shares, exceeds
25 per cent of the Company's market capitalization. The Company did
not file a material change report more than 21 days before the
expected closing of the Offering because the details of the
participation therein by related parties of the Company were not
settled until shortly prior to closing of the Offering and the
parties wished to close on an expedited basis for business
reasons.
The Underwriter will receive a cash commission
equal to 6% of the gross proceeds of the Offering, except with
respect to subscribers on the Company’s “president's list” for
which a cash commission equal to 2% of the gross proceeds of the
Offering, which will be paid out of the Escrowed Funds upon
satisfaction of the Escrow Release Conditions. As additional
consideration, the Underwriter received 3,714,300 broker warrants
(the “Broker Warrants”), with each Broker Warrant
entitling the holder to acquire one common share of the Company at
a price of $0.35 per common share until 24 months after the
satisfaction of the Escrow Release Conditions.
All securities issued in connection with the
Offering are subject to a four month statutory hold period after
the date of issuance. The Offering remains subject to the final
approval of the TSXV.
This press release does not constitute an offer
to sell or a solicitation of an offer to buy the Subscription
Receipts or Underlying Shares in the United States. The
Subscription Receipts and the Underlying Shares have not been and
will not be registered under the U.S. Securities Act, or any state
securities laws and may not be offered or sold within the United
States except pursuant to an available exemption from the
registration requirements of the U.S. Securities Act and applicable
state securities laws.
ABOUT WEST RED LAKE GOLD MINES
LTD.
West Red Lake Gold Mines Ltd. is a mineral
exploration company that is publicly traded and dedicated to
creating value for its shareholders by discovering new gold mines
in the highly productive Red Lake Gold District of Northwest
Ontario, Canada. This district has yielded 30 million ounces of
gold from high-grade zones and hosts some of the world's richest
gold deposits. West Red Lake holds an extensive property position
spanning 3,100 ha in West Red Lake, including three former gold
mines - Rowan, Mount Jamie, and Red Summit. The West Red Lake
Project covers a 12-km strike length along the Pipestone Bay St.
Paul Deformation Zone and West Red Lake plans to continue exploring
this property along strike and to depth aggressively in 2023.
ON BEHALF OF WEST RED LAKE GOLD MINES
LTD.
“Tom Meredith”
Tom
Meredith Chief
Executive Officer
For further information, please
contact:
Jasvir KalotiCFO & Corporate
Secretary Tel:
(604) 609-6110
Amandip Singh, VP Corporate DevelopmentTel:
416-203-9181 Email: asingh@wrlgold.comor visit the Company’s
website at https://www.westredlakegold.com
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. The TSX Venture Exchange
has neither approved nor disapproved the contents of this news
release.
Certain information included in this press
release constitutes forward-looking information under applicable
securities legislation. Forward-looking information typically
contains statements with words such as "anticipate", "believe",
"expect", "plan", "intend", "estimate", "propose", "project",
"scheduled", "will" or similar words suggesting future outcomes or
statements regarding an outlook.
Forward-looking information in this press
release includes, but is not limited to, the use of proceeds of the
Offering, completion of the Acquisition, conversion of the
Subscription Receipts, and the approval of the TSXV.
The forward-looking statements contained in this
press release are based on certain key expectations and assumptions
made by the Company, including expectations and assumptions
concerning: the closing of the Acquisition, receipt of the
necessary approvals and access to and sufficiency of capital.
Readers are cautioned that the foregoing list is not exhaustive of
all factors and assumptions which have been used.
Although the Company believes that the
expectations and assumptions on which the forward-looking
statements are based are reasonable, undue reliance should not be
placed on the forward-looking statements because the Company can
give no assurance that they will prove to be correct. Since
forward-looking statements address future events and conditions, by
their very nature they involve inherent risks and uncertainties.
Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include,
but are not limited to, the ability to close the Acquisition within
the timeframe or at all; constraint in the availability of
services, commodity price and exchange rate fluctuations, changes
in legislation impacting the mining industry, adverse weather
conditions and uncertainties resulting from potential delays or
changes in plans with respect to projects or capital expenditures.
These and other risks are set out in more detail in the Company's
Management’s Discussion and Analysis for the year ended November
30, 2022.
The forward-looking information contained in
this press release is made as of the date hereof and the Company
undertakes no obligation to update publicly or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, unless required by
applicable securities laws. The forward-looking information
contained in this press release is expressly qualified by this
cautionary statement.
All dollar figures included herein are presented
in Canadian dollars, unless otherwise noted.
The Company does not undertake any obligation to
revise or update any forward- looking statements as a result of new
information, future events or otherwise after the date hereof,
except as required by securities laws.
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