/THIS NEWS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF NEW FOUND GOLD CORP.'S SECURITIES IN THE UNITED STATES/
VANCOUVER, British Columbia, November 11, 2021--(BUSINESS WIRE)--New Found Gold Corp. ("New Found" or the "Company") (TSXV: NFG, NYSE American: NFGC) is pleased to provide an update regarding the previously announced non-brokered private placement with Mr. Eric Sprott of 5 million common shares of New Found (the "Common Shares"), at a price of C$9.60 per Common Share, for gross proceeds of C$48 million (the "Offering").
The Company has agreed with Mr. Eric Sprott that the Common Shares will qualify as "flow-through shares" (within the meaning of subsection 66(15) of the Income Tax Act (Canada)). All other terms of the Offering remain the same.
The gross proceeds of the Offering will be used by the Company to incur eligible "Canadian exploration expenses" that will qualify as "flow-through mining expenditures" as such terms are defined in the Income Tax Act (Canada) (the "Qualifying Expenditures") related to the Company’s Queensway Project located in Newfoundland, Canada and on the Company’s Lucky Strike Project located in Ontario, Canada.
The Offering is subject to the satisfaction of customary closing conditions, including the approval of the TSX Venture Exchange (the "TSXV") and approval by the shareholders of the Company if required by the TSXV.
Mr. Sprott currently beneficially owns 31,601,200 common shares of New Found. Upon closing of the Offering, Mr. Sprott will beneficially own 36,601,200 common shares of New Found. Mr. Sprott is considered a "related party" of New Found and, accordingly, the Offering constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 ("MI 61-101"). The Offering was exempt from the minority approval requirement of Section 5.6 and the formal valuation requirement of Section 5.4 of MI 61-101 as neither the fair market value of the Offering, nor the fair market value of the consideration of the Offering, exceeded 25% of New Found’s market capitalization.