Mr. Mike Davies reports
GRAN COLOMBIA GOLD INCREASES INTEREST IN SANDSPRING RESOURCES TO APPROXIMATELY 19.96%
Gran Colombia Gold Corp. has increased its equity position in Sandspring Resources Ltd. to 19.96 per cent through a non-brokered private placement completed today by Sandspring. Sandspring intends to use the proceeds of the private placement to continue work on the rescoping of the Toroparu project and additional exploration at its Chicharron project and for general working capital. On June 4, 2019, Sandspring announced positive results of a preliminary economic assessment for its Toroparu project, and the next stage of development will encompass completion of a feasibility study for the project.
Sandspring's private placement comprised a total of 26,801,000 units and 5.2 million subscription receipts at a price of 12.5 cents per unit and receipt, for gross proceeds of $4.0-million. Each unit issued in the private placement consists of one common share and one share purchase warrant entitling the holder to purchase one additional share at 16.5 cents for a period of 60 months. The placement was fully subscribed and included an investment from the company in the amount of $2.0-million.
The receipts were issued to the company as part of its participation in the private placement. Each receipt will automatically convert into a unit upon Sandspring receiving shareholder approval for the creation of the company as a control person of Sandspring, being a holder of greater than 20 per cent of the voting rights of Sandspring's outstanding securities. In the event the receipts have not converted into units prior to Dec. 31, 2019, the company will be entitled to a refund of the proceeds received from the receipts in the amount of $650,000, along with interest at the rate of 5 per cent per annum. Sandspring intends to seek shareholder approval for the creation of the company as a control person at its annual general meeting to be held later in the year.
Through completion of the private placement, the company has increased its holdings in Sandspring to an aggregate of 48.3 million common shares, 26.8 million share purchase warrants and 5.2 million receipts. The common shares controlled by the company represent approximately 19.96 per cent of the outstanding common shares of Sandspring. Assuming conversion of the receipts and exercise of the underlying warrants, the company, when combined with its existing ownership, would have control and direction over 85.5 million common shares, representing approximately 30.66 per cent of the then outstanding common shares of Sandspring. The company can potentially become a control person of Sandspring, assuming conversion of the receipts or the exercise of share purchase warrants, and has undertaken not to exercise the warrants if such conversion would result in it becoming a control person of Sandspring, unless and until shareholder approval (excluding the company's votes) has been received.
The additional shares, warrants and receipts were acquired for investment purposes, and the company has no present intention to dispose of or acquire further securities of Sandspring, although the company may in the future acquire or dispose of securities of Sandspring, through the market, privately or otherwise, as circumstances or market conditions warrant.
Copies of the early warning report filed by Gran Colombia will be available under Sandspring's profile on SEDAR or by contacting Gran Colombia directly.
About Gran Colombia Gold Corp.
Gran Colombia is a Canadian-based mid-tier gold producer with its primary focus in Colombia, where it is currently the largest underground gold and silver producer with several mines in operation at its Segovia and Marmato operations. Gran Colombia is continuing to focus on exploration, expansion and modernization activities at its high-grade Segovia operations.
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