Terms of Financing in Connection with the Acquisition WHITE ROCK, BC / ACCESSWIRE / October 19, 2021 / TDG Gold Corp (TSXV:TDG) (the "Company" or "TDG") is pleased to announce in connection with its acquisition of the Nueva Esperanza silver-gold project (the "Acquisition"), the Company will raise proceeds of at least $35,000,000 through a brokered private placement of subscription receipts (the "Subscription Receipts") at a price of $0.50 per Subscription Receipt (the "Offering"). As announced in the Company's press release dated July 27, 2021, BMO Capital Markets ("BMO") and RBC Capital Markets ("RBC", collectively with BMO, the "Lead Agents") are acting as co-lead agents in respect of a syndicate of agents (the "Agents") in respect of the Offering on a best-efforts basis.
Each Subscription Receipt will entitle the holder thereof, provided that the Escrow Release Conditions (as defined below) have been satisfied prior to the Termination Date (as defined below), to receive one unit of the Company (a "Unit"), consisting of one common share of the Company (a "Common Share") and one-half of one common share purchase warrant (each whole warrant, a "Warrant"), without payment of additional consideration or further action, upon the date (the "Qualification Date") which is the earlier of: (i) four months and a day after the closing of the Offering; and (ii) the third business day following the issuance of a receipt (the "Final Receipt") for a final short form prospectus qualifying the Common Shares and Warrants underlying the Subscription Receipts. The Company will use its commercially reasonable efforts to obtain a Final Receipt from the applicable principal regulator as soon as practicable following closing of the offering. In the event that the Final Receipt is not obtained by a date to be agreed between the Company and the Lead Agents, then each Subscription Receipt outstanding will, when deemed exercised on the Qualification Date, entitle the holder thereof to acquire a Unit consisting of 1.1 Common Shares and one-half of a Warrant without further payment on the part of the holder. The Warrants will have an exercise price and term to be determined in the context of the market.
The Subscription Receipts will be issued pursuant to a subscription receipt indenture (the "Subscription Receipt Agreement") to be entered into among the Company, the Lead Agents and a subscription receipt agent to be determined. Pursuant to the Subscription Receipt Agreement, the gross proceeds from the Offering (less 50% the Agents' Fee (as defined below), the Agents' reasonable out-of-pocket expenses, and the reasonable fees and disbursements of the Agents' legal counsel) (the "Net Escrowed Funds") will be held in escrow pending satisfaction of certain escrow release conditions (the "Escrow Release Conditions"), including (i) all necessary corporate, regulatory, and other approvals or consents necessary for the completion of the Acquisition and for the issuance of all securities upon the deemed exercise of the Subscription Receipts having been obtained; and (ii) all of the conditions precedent to the Acquisition (save solely for the payment of the purchase price thereof) shall have been satisfied. Upon satisfaction of the Escrow Release Conditions, the remaining portion of the Agents' Fee will be released to the Agents and the balance of the Net Escrowed Funds, together with any interest earned thereon, will be released to the Company. Notwithstanding the release of the Net Escrowed Funds to the Company and the Agents upon satisfaction of the Escrow Release Conditions and closing of the Acquisition, the Subscription Receipts will not convert into Common Shares until the Qualification Date, as described above.
If: (i) the Escrow Release Conditions have not been satisfied by 5:00 p.m. (Vancouver time) on the date that is four months and a day following the closing date of the Offering; (ii) the Acquisition is terminated at any earlier time; or (iii) the Company advises the Lead Agents, on behalf of the Agents, or announces to the public that it does not intend to proceed with the Acquisition (in any case, a "Termination Event", and the date upon which such event occurs, the "Termination Date"), the Subscription Receipts will be deemed to be cancelled and holders of Subscription Receipts will receive a cash amount equal to the offering price of the Subscription Receipts and any interest that was earned on the Net Escrowed Funds less any applicable withholding taxes. The Company will be responsible for any shortfall in the amount returnable to holders of Subscription Receipts in this event.
The Offering will raise minimum gross proceeds of $35,000,000, up to a maximum of $50,000,000. In addition, the Agents shall have the option exercisable until 48 hours prior to the closing of the Offering, to increase the number of Subscription Receipts under the Offering by an additional 15%. The net proceeds of the Offering will be used to fund the payment of the first tranche of the purchase price of Acquisition, which will be due on closing, for exploration on the Nueva Esperanza project and the Company's other mineral projects, and for general corporate and working capital purposes.
The Agents shall be paid an aggregate fee (the "Agents' Fee") in cash equal to 6% of the gross proceeds of the Offering, except in respect of any "President's List" orders up to a maximum of $5,000,000 of gross proceeds in respect of which the Agents shall be paid a fee equal to 3% of the aggregate gross proceeds.
All securities issued pursuant to the Offering will be subject to a statutory four-month hold period from the closing date of the Offering in accordance with Canadian securities legislation, subject to the prospectus qualification referred to above.