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Velocity Minerals closes $8.94M private placement
2020-11-24 15:27 ET - News Release
Also News Release (C-DPM) Dundee Precious Metals Inc
Mr. Keith Henderson of Velocity Minerals reports
VELOCITY ANNOUNCES CLOSING OF $8.9 MILLION STRATEGIC INVESTMENT AND PRIVATE PLACEMENT
Velocity Minerals Ltd. has closed a 9.99-per-cent strategic investment with Dundee Precious Metals Inc., whereby the company has issued and sold 13,394,000 common shares to Dundee Precious Metals, on a private placement basis, for an aggregate purchase price of $6,697,000.
In connection with the strategic investment, Velocity issued to Artemis Gold Inc. (ARTG) four million common shares at a price of 50 cents per share for gross proceeds of $2-million, in connection with the exercise by ARTG of its participation right to maintain its shareholding of Velocity at approximately 22 per cent (on an issued-and-outstanding basis).
In addition, an existing joint venture partner of the company, Gorubso Kardzhali AD, subscribed for 500,000 common shares at a price of 50 cents per share for gross proceeds of $250,000.
All securities issued in connection with the financing are subject to a hold period of four months and one day in Canada. No brokerage fees were paid in connection with the financing.
"We would like to welcome DPM and Gorubso as new shareholders of the company, as well as acknowledging the continued support of Artemis, who remain as Velocity's largest shareholder," stated Keith Henderson, Velocity's president and chief executive officer. "The company is well financed to complete ambitious exploration programs in the Rozino area and at our other gold exploration projects in Bulgaria during 2021."
The proceeds from the financing will be used: (i) to advance the company's Rozino project and other exploration properties; and (ii) for general working capital purposes.
ARTG is a related party (as such term is defined under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions) of Velocity, in that ARTG holds more than 20 per cent of the issued and outstanding voting securities of Velocity. The participation right exercise constitutes a related party transaction, as defined in MI 61-101. The company relied on sections 5.5(a) and 5.7(1)(a) of MI 61-101 for exemptions from the formal valuation and minority shareholder approval requirements, respectively, of MI 61-101, as, at the time of the participation right exercise, neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the participation right exercise exceeded 25 per cent of the company's market capitalization.
About Velocity Minerals Ltd.