Mr. Blaine Monaghan reports
FREMONT'S FINANCING OVERSUBSCRIBED, RAISES $1.2 MILLION TO DRILL GOLD BAR AND GOLD CANYON IN NEVADA
Fremont Gold Ltd.'s previously announced $1.0-million financing (see the news release dated Nov. 13, 2018) was oversubscribed and Fremont raised $1,230,590 through the issuance of 8,789,930 units at a price of 14 cents per unit.
Officers and directors of Fremont subscribed for a total of 1,708,500 common shares for gross proceeds of $239,190, or approximately 19 per cent of the offering. Net proceeds will be used to undertake further drilling at Fremont's Gold Bar and Gold Canyon projects located in the Gold Bar district in Eureka county, Nevada, and for general working capital.
"Our plans to drill Gold Bar and Gold Canyon were well received by the marketplace and enabled us to raise more than the $1-million that we were originally seeking," said Blaine Monaghan, chief executive officer of Fremont. "Permitting is currently under way and we expect to be drilling in early 2019. Drilling at Gold Bar will be focused on identifying an extension to the historic Gold Bar mine, while drilling at Gold Canyon will be focused on further defining a mineralized zone identified in the company's 2018 drill program."
Gold Bar and Gold Canyon projects
Fremont's Gold Bar and Gold Canyon projects are both former mines in the Gold Bar district in Eureka county, Nevada, an active mining district within the Battle Mountain-Eureka trend. The district contains several Carlin-style sediment-hosted gold deposits, including McEwen Mining Inc.'s Gold Bar project, which is scheduled to begin production in early 2019.
Fremont's Gold Bar and Gold Canyon projects are adjacent (west) and immediately north of McEwen's Gold Bar project. While McEwen's project and Fremont's project share the same name, the historic Gold Bar mine is held by Fremont. McEwen's project comprises four of the five satellite pits to the historic Gold Bar mine, whereas Fremont controls the remaining satellite pit, Gold Canyon.
Fremont's Gold Bar project encompasses the historic Gold Bar mine, which produced 286,354 ounces of gold from 1986 to 1994, and the Millsite deposit, which hosts a historic resource of 147,000 ounces of gold (1.62 million tonnes at 2.57 grams per tonne gold). Millsite is believed to be a faulted offset of the historic Gold Bar mine and is located to the northwest of the open pit. Fremont recently completed a soil sampling program based on a new structural interpretation and identified coincident gold and mercury geochemical anomalies to the southeast of the historic Gold Bar mine. These new interpretation and data suggest that gold mineralization related to the historic Gold Bar mine may extend to the southeast (see news release dated Oct. 30, 2018). Part of the offering proceeds will be used to drill test these anomalies. Drilling is expected to commence in early 2019 immediately upon completion of permitting.
Gold Canyon is adjacent to and directly northwest of McEwen's project, approximately 800 metres from McEwen's Gold Ridge deposit. Gold Canyon produced approximately 41,000 ounces of gold from 1990 to 1994 and a stockpile of previously mined ore still exists at site. Drilling undertaken by Fremont earlier this year intercepted a previously unrecognized mineralized zone approximately 60 metres below the pit floor (see news release dated July 25, 2018). Part of the offering proceeds will be used to further define this zone.
Each unit comprises a common share of the company and one-half of one transferable share purchase warrant. Each whole share purchase warrant entitles the holder to purchase one common share at a purchase price of 20 cents per for a period of 24 months from the date of issuance.
The warrants are subject to an accelerator provision whereby if, over a period of 15 consecutive trading days between Dec. 5, 2018, and the expiry of the warrants, the daily volume-weighted average trading price of the company's common shares exceeds 30 cents, the company may give written notice (via news release) that the warrants will expire on the 30th day following the provision of notice.
Officers and directors of Fremont subscribed for a total of 1,708,500 common shares for gross proceeds of $239,190. The participation of officers and directors of Fremont in the offering constitutes a related-party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The transaction is exempt from the formal valuation requirements of MI 61-101 pursuant to Section 5.5(a) and the minority approval requirements of MI 61-101 pursuant to Section 5.7(1)(a) on the basis that the fair market value of the officers' and directors' participation is not more than 25 per cent of the company's market capitalization.
The company did not file a material change report more than 21 days in advance of the closing of the offering as contemplated by the related-party transaction requirements under MI 61-101 as the insider participation was only recently confirmed.
Fremont paid a finder's fee equivalent to 6 per cent on certain of the proceeds raised in connection with the offering. Total finders' fees amount to $39,198.
All common shares issued in connection with the offering are subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation and the policies of the TSX Venture Exchange, pursuant to which they may not be sold or transferred until April 6, 2019.
About Fremont Gold Ltd.
Fremont Gold's mine finding management team has assembled a portfolio of high-quality gold projects in Nevada, with the goal of making a new discovery. Fremont's Gold Bar and Gold Canyon are past-producing gold mines adjacent to McEwen Mining's Gold Bar project, where mine construction is under way.
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