Mr. Anthony Moreau reports
AMERICAN EAGLE GOLD ANNOUNCES C$2.96 MILLION FINANCING WITH NEW STRATEGIC SHAREHOLDER
Teck Resources Ltd. has agreed to make a strategic investment in American Eagle Gold Corp. through a structured flow-through financing on a private placement basis.
The company will issue 14.4 million common shares on a flow-through basis at a price of 20.5 cents per share for issue proceeds of approximately $2.96-million. Teck will subsequently acquire the shares for an aggregate purchase price of $1.87-million, or 13 cents per share.
- The offering fully finances American Eagle's 2023 drill program on NAK and provides the capital to advance its continuing exploration activities at the NAK copper-gold porphyry project located near Smithers, B.C.
- Drilling on American Eagle's NAK is expected to recommence in June.
- No warrants or finders fees were issued in connection with the offering.
"We are very pleased to welcome Teck, Canada's pre-eminent copper producer, as a strategic investor. This investment affirms the value our team sees in NAK and solidifies our drilling and exploration plans for 2023. NAK's 2022 drilling program discovered broad intercepts of bornite-bearing copper-gold porphyry mineralization. Two thousand twenty-three's objective is to continue advancing our property by expanding its known mineralized footprint and identifying the high-grade source of the copper and gold on NAK," said Anthony Moreau, chief executive officer of American Eagle Gold.
American Eagle will use the proceeds of the offering to finance its 6,000-metre drill program on a number of targets at the NAK project. The objective of the drill program is to:
- Follow up the 2022 drill program via east-west stepout drilling and begin to delineate the true size of this potential deposit;
- Expand and better define orientation and distribution of the higher-grade zones of dike-hosted bornite mineralization;
- Expand the known footprint of the high-grade at-surface south gold zone;
- Step out and investigate the highly prospective southern margin of the main Babine stock porphyry.
Immediately following the closing of the offering, Teck will hold 14.4 million common shares of American Eagle, or approximately 15 per cent of American Eagle's issued and outstanding common shares on a non-diluted basis. Teck currently holds no securities of American Eagle.
Teck's purchase of the shares was made for investment purposes. Teck may determine to increase or decrease its investment in American Eagle depending on market conditions and any other relevant factors. This release is required to be issued under the early warning requirements of applicable securities laws. Teck's head office is located at suite 3300, 550 Burrard St., Vancouver, B.C., V6C 0B3. A copy of Teck's early warning report may be obtained from Chris Stannell at 604-699-4368.
No warrants are included in the offering, and no finders fees or commissions were paid. Closing of the offering is expected to occur on or before May 30, 2023, subject to negotiation and execution of definitive documentation with the initial purchasers of the shares, as well as certain customary conditions, including, but not limited to, the receipt of all necessary regulatory approvals and acceptance of the TSX Venture Exchange. The shares will be subject to a statutory hold period of four months plus a day following the closing date.
An amount equal to the gross proceeds from the issuance of the offering will be used to incur, on the company's Canadian mineral exploration properties, eligible resource exploration expenses that will qualify as (i) Canadian exploration expenses (as defined in the tax act); (ii) flow-through critical mineral mining expenditures (as defined in Subsection 127(9) of the tax act); and (iii) as a B.C. flow-through mining expenditure for purchasers in British Columbia. The qualifying expenditures in an aggregate amount not less than the gross proceeds raised from the issue of the offering will be incurred on or before Dec. 31, 2024, and will be renounced by the company to the initial purchasers of the shares with an effective date no later than Dec. 31, 2023. In the event that the company is unable to renounce the issue price for the shares on or prior to Dec. 31, 2023, for each share purchased and/or if the qualifying expenditures are reduced by the Canada Revenue Agency, the company will, as sole recourse for such failure to renounce, indemnify each initial purchaser for the additional taxes payable by such subscriber to the extent permitted by the tax act as a result of the company's failure to renounce the qualifying expenditures as agreed.
In connection with the offering and for so long as Teck's ownership in American Eagle remains greater than 5 per cent of American Eagle's issued and outstanding common shares on a non-diluted basis, American Eagle has agreed to grant Teck certain investor rights, being an equity participation right to maintain its pro rata ownership in the company, certain information rights relating to the NAK project and a price protection right. Pursuant to the price protection right, if within 90 days of the closing date American Eagle issues common shares under certain transactions, at a price per common share that is less than Teck acquisition price, Teck shall be entitled to receive from the company (for no additional consideration) additional common shares in an amount such that, when added to the number of common shares purchased on the closing date, will equal the number of common shares that the aggregate price paid by Teck on the closing date would have purchased at the lower price, provided that in no event will Teck hold 20 per cent or more of the shares of American Eagle.
About American Eagle's NAK project
NAK is a porphyry copper-gold target that exhibits many signs of a robust and large-scale system. Historical drilling, while shallow, defined a near-surface copper-gold system with a footprint greater than 1.5 kilometres by 1.5 kilometres. Drilling in 2022 showed that the property holds substantial deep potential but remains largely untested at depth, while near-surface mineralization potential was shown to be significantly larger than what was historically defined.
The NAK property is road accessible, and many target areas coincide with forest industry clear cuts. Drilling can be undertaken year-round, and no helicopter support is required. The NAK property is 85 kilometres from Smithers, B.C., in the Babine copper-gold porphyry district of west-central British Columbia. It lies close to past-producing mines (Bell, Granisle), in proximity to excellent infrastructure. NAK's highly encouraging initial results make it a prime candidate for further exploration. The company's main objective is to advance this newly revitalized prospect into a major discovery.
NAK's 2022 drill program was a renowned success, discovering broad intercepts of bornite-bearing copper-gold porphyry mineralization. Each drill hole returned strongly anomalous mineralization from top to bottom of hole, with areas of high-grade copper and gold present within many of the holes. Two thousand twenty-three's objective is to continue advancing the company's property by expanding its known mineralized footprint and identifying the high-grade source of the copper and gold on NAK. Drilling is expected to commence in early June, 2023.
About American Eagle Gold Corp.
American Eagle is focused on exploring its NAK project in the Babine copper-gold porphyry district of central British Columbia.
Qualified person statement
Mark Bradley, BSc, MSc, PGeo, a certified professional geologist and qualified person for the purposes of Canada's National Instrument 43-101 Standards of Disclosure for Mineral Properties, has verified and approved the information contained in this news release.
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