Mr. Mark O'Dea reports
TRUE GOLD MINING INC. ANNOUNCES BOUGHT DEAL OFFERING OF UNITS AND CONCURRENT
PRIVATE PLACEMENT BY LIBERTY METALS & MINING
True Gold Mining Inc. has entered into an agreement with RBC Capital Markets and a syndicate of underwriters, pursuant to which they have agreed to purchase, on a bought-deal basis by way of a short-form prospectus, 91.4 million units of True Gold, each unit consisting of one common share and one-half of one common share purchase warrant, at a price of 40 cents per unit for aggregate gross proceeds to True Gold of approximately $36.6-million. Each whole common share purchase warrant will entitle the holder to purchase one common share of the company at a price of 47 cents prior to the date which is six months following the closing of the bought-deal financing. In addition, True Gold has granted the underwriters an option, exercisable at any time, in whole or in part, until the date that is 30 days following the closing of the bought-deal financing, to purchase up to an additional 15 per cent of the number of units solely to cover overallotments, if any, and for market stabilization purposes. The underwriters can elect to exercise the option for units, common shares only, or warrants only, or any combination thereof. In the event that the option is exercised in its entirety, the aggregate gross proceeds of the bought-deal financing to True Gold will be approximately $42.0-million.
In addition, True Gold is pleased to announce that Liberty Metals & Mining Holdings LLC (LMM), a subsidiary of Liberty Mutual Insurance and the company's largest shareholder, has elected to exercise its participation rights and has agreed to purchase 21,181,218 units (24,358,400 units in the event the overallotment option is exercised in full) at the issue price in order to maintain its pro rata interest in the company. Closing of the non-brokered financing is expected to occur concurrently with the closing of the bought-deal financing and is conditional upon closing of the bought-deal financing. LMM has agreed not to exercise any warrant if, after giving effect to such exercise, it and its affiliates will own in excess of 19.9 per cent of the outstanding common shares, unless the company, at the request of LMM, has obtained any required shareholder and regulatory approvals prior to such exercise.
Aggregate gross proceeds from the bought-deal financing and the non-brokered financing will total approximately $45.0-million, prior to the exercise of the overallotment option.
The net proceeds of the offering will be used to allow the company to proceed with its proposed development and construction activities at the Karma gold project in Burkina Faso, and for working capital purposes.
The offering is scheduled to close on or about Feb. 18, 2014, and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange and the securities regulatory authorities.
We seek Safe Harbor.
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