Mr. Michael Smith reports
AVALON INVESTMENT HOLDINGS ANNOUNCES CLOSING OF FIRST TRANCHE OF PRIVATE PLACEMENT AGGREGATE GROSS PROCEEDS OF US$3,314,857
Avalon Investment Holdings Ltd. the holder of a 100-per-cent interest in the Omai gold mine in Guyana, through a wholly owned subsidiary, has raised gross proceeds of $3,314,857 (U.S.) in the first tranche of its $4.4-million (U.S.) non-brokered private placement previously announced on Oct. 10, 2019, including the issuance of 15 million common shares to Sandstorm Gold Ltd. for consideration of $1.5-million (U.S.) and a 1-per-cent royalty (described herein).
The subscription for common shares by Sandstorm is the first tranche of a $20-million (U.S.) order from Sandstorm. Sandstorm intends to purchase an additional $500,000 (U.S.) of common shares as part of the upcoming closing of the second tranche of the offering upon satisfaction of certain conditions precedent, including the raising of $2.4-million (U.S.) in gross proceeds under the offering (excluding Sandstorm's subscription). Under the offering, Sandstorm was granted a 1-per-cent royalty on the Omai gold mine. Avalon retains the right to purchase 0.5 per cent of the royalty from Sandstorm for $4-million (U.S.) for a period of 30 months.
In addition, pursuant to the offering, Avalon sold 18,148,570 units for total consideration of $1,814,857, each unit consisting of one common share and one-half of one whole common share purchase warrant. Each warrant will entitle the holder, on exercise, to purchase one additional common share for a period of 24 months at a price of 35 U.S. cents.
As part of the offering, Goldspot Discoveries Corp. has acquired four million units for proceeds of $400,000 (U.S.). In a statement, Denis Laviolette, president and CEO of Goldspot, stated, "Goldspot is delighted to participate in the Avalon financing, and provide our extensive exploration experience and artificial intelligence technology in assisting Avalon in advancing the potential of the Omai gold mine in Guyana."
Avalon may increase the $4.4-million (U.S.) offering to accommodate additional demand. The revised maximum, if any, will be announced on closing of additional tranches.
As previously disclosed, Avalon has executed a definitive amalgamation agreement dated Oct. 9, 2019, with Anconia Resources Corp. Pursuant to the agreement, Anconia will acquire all of the issued and outstanding securities of Avalon by means of a three-cornered amalgamation. The proposed transaction constitutes a reverse takeover of Anconia under the policies of the TSX Venture Exchange and its completion is subject to the approval of the TSX-V. The proposed transaction is an arm's-length transaction.
We seek Safe Harbor.
© 2020 Canjex Publishing Ltd. All rights reserved.