Liberty Gold is focused on exploring for and developing open pit oxide deposits in the Great Basin of the United States, home to large-scale gold projects that are ideal for open-pit mining
Liberty Gold Announces Purchase and Resale of Black Pine Royalty Interest. (Credit: Michael Gaida from Pixabay)
Liberty Gold Corp. (TSX:LGD; OTCQX:LGDTF) (“Liberty Gold” or the “Company”) is pleased to report that it has reached agreements on a series of transactions that will provide a future option to reduce the royalty interest from the current 0.5% Net Smelter Royalty (“NSR”) to a 0.25% NSR at the Company’s Black Pine Oxide Gold Project (“Black Pine”) in southeastern Idaho on attractive financial terms. The Company is also pleased to announce a non-brokered private placement raising proceeds of up to US$5.7 million, anchored by a US$5 million strategic investment by Wheaton Precious Metals Corp. (“Wheaton”).
Jason Attew, President and CEO of Liberty Gold commented, “It is a rare occasion to have an opportunity to reduce the royalty interest of a mining project, particularly one as high quality and favourably located as Black Pine. This option further de-risks the future development of Black Pine and would result in more of the project economics being attributable to Liberty Gold’s shareholders. The Company is also pleased to welcome Wheaton to its share register and is thankful for the endorsement of Black Pine and Liberty Gold by Wheaton that these transactions represent.”
PURCHASE AND RESALE OF ROYALTY
The Company has reached an agreement to purchase the existing 0.5% NSR from a private company on certain claims at Black Pine for US$3.5 million in cash consideration and 200,000 common shares of the Company. The 0.5% NSR was part of the consideration paid when Liberty Gold acquired Black Pine back in 2016.
Concurrently, the Company has reached an agreement to grant an affiliate of Wheaton a new 0.5% NSR (the “Royalty”) for cash consideration of US$3.6 million covering all claims comprising Black Pine. As part of this transaction, the Company has been granted an option to repurchase 50% of the Royalty for US$3.6 million at any point in time up to the earlier of commercial production at Black Pine or January 1, 2030. An affiliate of Wheaton will also be granted a Right of First Refusal on any royalties, streams or pre-pays that include precious metals pertaining to Black Pine in the future.
PRIVATE PLACEMENT FINANCING
In addition, the Company is pleased to announce a non-brokered private placement of up to 22.9 million shares at C$0.34 per share for proceeds to the Company of up to US$5.7 million (the “Offering”). Wheaton has agreed to subscribe for US$5 million of the offering with existing shareholders, management and directors of the Company subscribing for up to US$0.7 million of the Offering.
The proceeds of the Offering will be used for exploration, development, economic studies and permitting programs for the Company’s projects in the Great Basin and for general working capital.
The Offering and royalty transactions are scheduled to close on or about September 15, 2023, and are subject to a number of conditions including, but not limited to, receipt of all necessary approvals including the approval of the Toronto Stock Exchange and applicable securities regulatory authorities.
Certain directors, management, and insiders of the Company (collectively, the “Interested Persons”) are expected to purchase or acquire direction and control over an aggregate of 558,820 common shares under the Offering. The Interested Persons are each considered a “related party” of Liberty Gold and the sale of common shares under the Offering to the Interested Persons constitutes a “related party transaction” within the meaning of MI 61-101 – Protection of Minority Security Holders in Special Transactions.
The securities offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor will there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Source: Company Press Release