Mr. Roland Phelps reports
GALANTAS CLOSES PRIVATE PLACEMENT
Galantas Gold Corp.'s proposed private placement for 2,833,132 common shares for gross proceeds of $637,454 (376,240 British pounds), previously announced on June 26, 2020, and July 3, 2020, has now closed and was fully subscribed.
The private placement has received conditional approval of the TSX Venture Exchange and closed on July 17, 2020, for 2,833,132 common shares for receipt of $637,454 (376,240 British pounds). The net proceeds to be raised by the private placement are intended to be used to support mine operations and provide general working capital for the company.
The private placement included a subscription by LF Miton UK Smaller Companies Fund, which has subscribed for 527,108 common shares in the private placement and is managed by Premier Fund Managers Ltd. Postclosing, this fund holds 3,222,330 shares, equivalent to 9.17 per cent of the company's common shares. The total number of shares controlled by Premier Miton postcompletion of the private placement is 4,884,243, representing 13.89 per cent of the company's enlarged issued and outstanding common shares.
The private placement also included a subscription from Melquart Ltd., for 1,506,024 common shares, which gives rise to an enlarged holding of 9,262,595 common shares postcompletion of the private placement, or 26.35 per cent of the company's enlarged issued and outstanding common shares.
A four-month hold period will apply to the common shares of the private placement. The hold period will expire on Nov. 18, 2020. The shares issued pursuant to the private placement will rank pari passu with the existing common shares in issue of the company.
Commission payable to brokers in Canada and the United Kingdom in relation to the private placement totals $33,673 (19,874 British pounds). The broker that assisted with the private placement in Canada is Stephen Avenue Securities Inc. and the broker in the United Kingdom is Whitman Howard Ltd.
Premier Miton and Melquart are deemed to be related parties of the company by virtue of being substantial shareholders of the company. As a consequence, the directors of the company consider, having consulted with their nominated adviser, Grant Thornton U.K. LLP, that the terms of the private placement are fair and reasonable insofar as shareholders are concerned. As related parties of the company have subscribed under the private placement, the transaction constitutes a related-party transaction pursuant to the rules of Multilateral Instrument 61-101. The company has relied on exemptions from formal valuation and minority approval requirements by virtue of the private placement being valued at less than 25 per cent of the company's market capitalization.
The company has applied for admission of the common shares in connection with the private placement to trading on the Alternative Investment Market of the London Stock Exchange with admission expected to occur on or around July 22, 2020.
Following admission and closing of the private placement, Galantas Gold's issued and outstanding common shares total 35,154,604.
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