Another player joins the fun.
Velocity Minerals arranges $7M financing with Dundee
2020-11-16 08:54 ET - News Release
Mr. Keith Henderson reports
VELOCITY ANNOUNCES STRATEGIC INVESTMENT BY DUNDEE PRECIOUS METALS
Velocity Minerals Ltd. has entered into an investment agreement dated Nov. 13, 2020, with Dundee Precious Metals Inc., whereby DPM will invest up to $7-million to acquire a 9.99-per-cent ownership interest in Velocity on a non-diluted basis. Under and subject to the terms and conditions of the Investment Agreement, DPM has agreed to purchase up to 14,000,000 common shares of Velocity (each, an "Offered Share") at the price of $0.50 per Offered Share, on a private placement basis.
In connection with the Strategic Investment, DPM will be granted the right to nominate one director to Velocity's board of directors upon increasing its ownership in Velocity to at least 15% of Velocity's issued and outstanding common shares (the "Common Shares"). The Investment Agreement provides that for so long as DPM holds at least 9.99% or more of Velocity's issued and outstanding Common Shares, DPM shall have a right to participate in future equity issuances in order to maintain its then pro rata percentage ownership interest. The Investment Agreement also provides that DPM is subject to certain voting and resale restrictions for a period of 12 months from the closing date of the Strategic Investment.
In connection with the Strategic Investment, Artemis Gold Inc. ("ARTG") has the participation right (the "Participation Right") to subscribe for that number of Common Shares that results in ARTG maintaining its pro rata ownership interest in the Company at the same price per Common Share as the Strategic Investment. Additionally, certain other investors may subscribe for Common Shares (the "Ancillary Subscriptions") in connection with, and at the same price as, the Strategic Investment. ARTG is also entitled under the Participation Right to participate on any Common Shares issued pursuant to the Ancillary Subscriptions to maintain its pro rata ownership interest in the Company.
The net proceeds from the Strategic Investment, together with any proceeds from the exercise of the Participation Right and the Ancillary Subscriptions, will be used to advance the Company's Rozino project and other exploration properties, and for general working capital purposes.
"We are pleased to welcome DPM as a strategic investor. DPM is an innovative and socially responsible, mid-tier precious metal company with two operating mines in Bulgaria," stated Keith Henderson, President & CEO of Velocity. "DPM's recently commissioned Ada Tepe open pit gold mine is located 40 km by road from our Rozino gold project, with which it shares many geological and technical similarities."
David Rae, President and CEO of DPM stated, "We are pleased to be investing in further gold exploration in southeastern Bulgaria through our equity financing in Velocity." Mr. Rae continued, "Given our strong presence and capabilities in the region, we believe that we are uniquely positioned to support Velocity as a strategic shareholder."
The closing of the Strategic Investment is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange (the "TSXV"). All Common Shares issued in connection with the transactions contemplated in this news release will be subject to a hold period of four months and one day in Canada.
About Velocity Minerals Ltd.