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Amarillo Gold Corp
Symbol C : AGC
Shares Issued 140,838,158
Close 2019-08-07 C$ 0.235
Recent Sedar Documents

Amarillo Gold arranges $5-million bought deal

2019-08-08 09:15 ET - News Release

Mr. Mike Mutchler reports

AMARILLO ANNOUNCES $5 MILLION BOUGHT DEAL PRIVATE PLACEMENT FINANCING

Amarillo Gold Corp. has entered into an agreement with Mackie Research Capital Corp., as sole underwriter and sole bookrunner, whereby the underwriter will purchase, on a bought deal basis, 25 million units of Amarillo at a price of 20 cents per unit for gross proceeds to the company of $5-million. The lead order for the offering is from Eric Sprott, who intends to subscribe for $5-million of the offering.

Mike Mutchler, president and chief executive officer, commented: "We are very excited to welcome Eric Sprott as a significant shareholder in Amarillo. We are pleased that he has recognized the tremendous opportunity offered by Amarillo and Brazil in this exciting gold market. The proceeds of this private placement will help Amarillo to complete the feasibility study and the application for the licence to install (LI) for the Mara Rosa project before the end of this year."

Each unit will comprise one common share of the company and one common share purchase warrant. Each warrant shall be exercisable to acquire one common share at a price of 30 cents per warrant share for a period of 24 months from the closing of the offering.

The company has granted the underwriter the option to upsize the offering to purchase, as principal on a bought deal private placement basis, an additional 10 million units at the offering price for additional gross proceeds to the company of $2-million. The offering and the upsized offering shall herein collectively be referred to as the offering.

The company has also granted the underwriter an option to increase the size of the offering by up to an additional 15 per cent of the total number of units to be issued under the offering, including in respect of any exercise of the upsized offering, at any time on or before 48 hours prior to closing.

The offering is scheduled to close on or about the week of Aug. 29, 2019, 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. The units to be issued under the offering will have a hold period of four months and one day from closing.

The company intends to use the net proceeds from the offering to advance its mineral exploration and development projects, as well as for general corporate purposes.

The underwriter will receive an aggregate cash fee equal to 6 per cent of the gross proceeds from the offering, including in respect of any exercise of the upsized offering and the underwriter's option. In addition, the company will grant the underwriter, on the date of closing, non-transferable options equal to 6 per cent of the total number of units sold under the offering (including in respect of any exercise of the underwriter's options and the upsized offering). Each compensation option will entitle the holder thereof to purchase one unit at the same price of the units and warrants issued pursuant to the offering for a period of 24 months after the closing date. Notwithstanding the foregoing, the lead order by Mr. Sprott or any affiliate will have a reduced cash commission of 4.0 per cent of the gross proceeds arising from the lead order, and the underwriter will not receive any compensation options on the lead order.

About Amarillo Gold Corp.

Amarillo is developing an open-pit gold resource at its Mara Rosa project in the mining-friendly jurisdiction of Goias state in Brazil. The Mara Rosa project, also known as the Posse deposit, was awarded its main permit which provides the social and environment permission to mine. Amarillo is progressing toward obtaining an installation permit. Based on the National Instrument 43-101 prefeasibility study 2018 update filed on SEDAR on Sept. 13, 2018, the Posse deposit at the Mara Rosa project contains an estimated 513,000 ounces of gold in the proven category from 9.6 million tonnes at 1.65 grams per tonne gold and 574,000 ounces gold in the probable category from 14.2 million tonnes at 1.26 grams per tonne gold, for total estimated reserves of 1,087,000 ounces from 23.8 million tonnes at 1.42 grams per tonne gold.

Mike Mutchler, president and chief executive officer of the company, is a qualified person as defined by NI 43-101 guidelines, and has reviewed and approved the scientific and technical disclosure relating to the scientific and technical disclosures in this news release.

We seek Safe Harbor.

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