Mr. Ioannis Tsitos reports
GOLDSOURCE MINES ANNOUNCES CDN$5.0 MILLION BROKERED PRIVATE PLACEMENT
Goldsource Mines Inc. has entered into an agreement with PI Financial Corp. which will be leading a syndicate of agents in connection with a private placement of 41,666,700 units of the company at a price of 12 cents per unit for gross proceeds to the company of approximately $5.0-million. Each unit will consist of one common share of Goldsource and one-half of one common share purchase warrant of Goldsource. Each warrant will be exercisable to acquire one common share of Goldsource at a price of 20 cents for 24 months from the closing of the offering.
In addition, Goldsource has granted the agents an option, exercisable, in whole or in part, up to two days prior to the closing of the Offering to increase the size of the offering by up to 15 per cent solely to cover overallotments, if any, and for market stabilization purposes.
Goldsource is also pleased to report that Eric Sprott has advised of a proposed lead subscription in the offering for 25 million units for a total subscription of $3.0-million.
The company intends to use the proceeds from this offering to drill test extensions of the recent high-grade Salbora discovery at its Eagle Mountain gold project in Guyana, complete an updated resource, continue its prefeasibility study inclusive of the Salbora discovery and for general corporate purposes.
The company will pay a commission to the agents of 6 per cent of the gross proceeds of the offering (including from any exercise of the agents' option). The company has also agreed to issue to the agents non-transferable compensation options equal in number to 6 per cent of the aggregate number of units sold under the offering (including from any exercise of the agents' option). Each compensation option will be exercisable to acquire one common share at an exercise price of 12 cents per share for 24 months following the closing of the offering.
The offering is scheduled to close on or about April 10, 2019, and is subject to regulatory approval. Resale of the securities distributed in connection with the offering will be subject to a hold period of four months and one day following the closing date of the offering.
It is anticipated that certain directors, officers and other insiders of the company will acquire units under the offering. Such participation will be considered to be related party transactions within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions adopted in the policy. The company intends to rely on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of related party participation in the offering as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves interested parties, is expected to exceed 25 per cent of the company's market capitalization (as determined under MI 61-101).
We seek Safe Harbor.
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