12:30:54 EDT Tue 21 May 2019
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Atlantic Gold Corp
Symbol C : AGB
Shares Issued 236,895,350
Close 2019-03-14 C$ 2.25
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Atlantic Gold acquires 18.6 million Velocity units

2019-03-14 18:20 ET - News Release

Also News Release (C-VLC) Velocity Minerals Ltd (3)

Mr. Steven Dean of Atlantic Gold reports


Atlantic Gold Corp., through a wholly owned subsidiary, has completed its $9-million strategic investment in Velocity Minerals Ltd. by way of a non-brokered private placement pursuant to an agreement between Atlantic, Atlantic's subsidiary and Velocity, as originally announced on Jan. 17, 2019.

Pursuant to the financing, Atlantic subscribed for: (i) 18.6 million units of Velocity issued at a price of 21 cents per unit for $3,906,000 and (ii) $5,094,000 principal amount of secured convertible debentures of Velocity, for total consideration of $9-million.

Each unit consists of one common share in the capital of Velocity and one-half of one common share purchase warrant. Each warrant is exercisable for an additional common share until three years from the date of issuance at an exercise price of 25 cents per common share. The convertible debentures will earn interest at a rate of 8.5 per cent per annum over a 60-month term, payable semi-annually in cash or common shares at the discretion of Velocity. The principal amount of the convertible debentures will be convertible to common shares during the term at the election of Atlantic at a conversion price of 25 cents. The convertible debentures will be secured with a first-ranking charge at any time by way of a general security agreement and guarantee from the material subsidiary of Velocity.

Early warning disclosure

Prior to the closing of the financing, Atlantic did not own or have control or direction over any securities of Velocity. Following the closing of the financing, Atlantic beneficially owns and has control and direction over an aggregate of 18.6 million common shares, representing approximately 19.8 per cent of the issued and outstanding common shares of Velocity. Assuming conversion of both the convertible debentures and the exercise of the warrants, Atlantic would own and have control and direction over 48,276,000 common shares, representing 39.1 per cent of the issued and outstanding common shares of Velocity on a partially diluted basis.

Atlantic completed the financing for investment purposes. Atlantic will review its holdings in Velocity on a continuing basis and may from time to time and at any time, in its sole discretion, acquire or cause to be acquired additional equity or debt securities or other instruments of Velocity, or dispose or cause to be disposed such equity or debt securities or instruments, through open market transactions, private placements by Velocity and other privately negotiated transactions, or otherwise, in each case in accordance with Atlantic's obligations to Velocity pursuant to the investment agreement and with applicable securities laws.

Atlantic has the right to designate one individual to be nominated and, if elected, to serve as a director of Velocity provided Atlantic holds at least 15 per cent of the issued and outstanding common shares, with the number of nominees increasing to two directors if Atlantic holds 30 per cent or more of the issued and outstanding common shares. If the size of the board of directors of Velocity is increased or decreased from the current four directors, Atlantic's nomination rights will be adjusted in accordance with the provisions of the investment agreement.

To obtain a copy of the early warning report filed under applicable Canadian securities laws in connection with the subscription for units and convertible debentures above, please see Velocity's profile on the SEDAR website.

About Atlantic Gold Corp.

Atlantic is a well-financed, growth-oriented gold development group with a long-term strategy to build a mid-tier gold production company focused on manageable, executable projects in mining-friendly jurisdictions.

Atlantic is focused on increasing gold production in Nova Scotia beginning with its MRC phase 1 open-pit gold mine, which declared commercial production in March, 2018, and its phase 2 life-of-mine expansion at industry-lowest-decile cash and all-in sustaining costs (as stated in the company's news releases dated Jan. 16, 2019, and Jan. 29, 2018).

Atlantic is committed to the highest standards of environmental and social responsibility and continually invests in people and technology to manage risks and maximize outcomes and returns to all stakeholders.

We seek Safe Harbor.

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