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Spanish Mountain closes $4-million financing
2020-07-13 19:07 ET - News Release
Mr. Larry Yau reports
SPANISH MOUNTAIN GOLD ANNOUNCES CLOSING OF OVERSUBSCRIBED PRIVATE PLACEMENT
Spanish Mountain Gold Ltd. has closed a non-brokered private placement offering of 40 million common share units for gross proceeds of $4-million. Management has determined that it is in the best long-term interest of the company to upsize the offering in order to accommodate a highly respected mining investor, Eric Sprott.
Each unit consisted of one common share of the company and one common share purchase warrant. Each warrant entitles its holder to purchase one common share at a price of 15 cents per share for a period of two years. All of the securities issued in connection with the offering are subject to a statutory four-month hold period expiring on Nov. 13, 2020.
Larry Yau, chief executive officer, commented: "I believe this private placement has fulfilled our goal of placing shares exclusively with long-term supporters of our project. The company would like to welcome the many investors from around the globe, including a personal investment by Mr. Sprott, as our new shareholders and thank a number of existing shareholders for increasing their investment in our project. We regret leaving numerous orders for the private placement unfilled as we strongly believe in maintaining discipline in financing."
No finders' fees, warrants or commissions were paid in connection with the offering. The company expects to use all of the proceeds of the offering to advance the company's Spanish Mountain gold project. Details of the project work will be announced shortly. The offering is subject to final acceptance by the TSX Venture Exchange upon filing of final documentation.
An officer of the company subscribed to a total of 1.15 million units in connection with the offering. Such participation is considered to be a related party transaction as defined under Multilateral Instrument 61-101. The transaction was exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of any securities issued to, nor the consideration paid by, such persons exceeded 25 per cent of the company's market capitalization.
Mr. Sprott, through 2176423 Ontario Ltd., a corporation that is beneficially owned by him, acquired 20 million units pursuant to the offering for a total consideration of $2-million. Subsequent to the offering, Mr. Sprott beneficially owns or controls 20 million common shares of the company and 20 million warrants, representing approximately 7.2 per cent of the issued and outstanding shares of the company on a non-diluted basis, and approximately 13.4 per cent of the issued and outstanding shares of the company on a partially diluted basis, assuming the exercise of the warrants acquired hereunder and forming part of the units. Prior to the offering, Mr. Sprott did not beneficially own or control any share of the company.
The 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 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 the applicable early warning report will appear on the company's profile on SEDAR and may also be obtained by calling Mr. Sprott's office at 416-945-3294 (200 Bay St., Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ont., M5J 2J1).
About Spanish Mountain Gold Ltd.
Spanish Mountain Gold is focused on advancing its multimillion-ounce Spanish Mountain gold project in south-central British Columbia. The company has prioritized the development of the first phase of the project in which the pit-delineated high-grade core of the deposit is potentially expected to sustain a stand-alone operation of 11 years.
We seek Safe Harbor.