Closing of the AngloGold Subscription and the Brokered Offering are cross conditional upon one another
PureGold announces equity financings for total proceeds of C$25m; AngloGold Ashanti proposes to increase ownership to 19.9%. (Credit: PURE GOLD MINING INC.)
Pure Gold Mining Inc. (TSX-V:PGM, LSE:PUR) (“PureGold” or the “Company”), is pleased to announce that it has entered into an agreement with National Bank Financial Inc., as lead underwriter, on behalf of a syndicate of underwriters including Clarus Securities Inc. (collectively, the “Underwriters”) and with Tamesis Partners LLP acting as special selling agent in the UK and Europe, under which the Underwriters have agreed to purchase, on a bought deal private placement basis, 16,989,000 common shares of the Company at a price of C$0.53 (“Offering Price”) per share for gross proceeds of C$9,004,170 (“Brokered Offering”). The Company has also granted the Underwriters an option to purchase up to an additional 9,434,000 common shares pursuant to the Brokered Offering for additional gross proceeds to the Company of up to C$5,000,020 (“Underwriters Option”).
The Company is also pleased to announce it has agreed to a concurrent private placement of 30,181,572 common shares at the Offering Price with the Company’s largest shareholder, AngloGold Ashanti Limited (“AngloGold Ashanti”) by way of non-brokered private placement for additional gross proceeds of C$15,996,233 (the “AngloGold Subscription” and together with the “Brokered Offering”, the “Transactions”). Closing of the AngloGold Subscription and the Brokered Offering are cross conditional upon one another.
Troy Fierro, President & CEO of PureGold, stated, “We are delighted to announce this financing with the support of our largest shareholder, AngloGold Ashanti. We value the global operational expertise AngloGold Ashanti brings and look forward to working collaboratively with their technical team to continue to unlock the full potential of the PureGold Mine.”
After giving effect to the Transactions, AngloGold Ashanti will own 19.9% of the outstanding common shares of PureGold on a partially diluted basis. Should the Underwriters Option be exercised, AngloGold Ashanti shall have the option to purchase such additional shares under the AngloGold Subscription as to allow AngloGold Ashanti to maintain approximate 19.9% ownership of PureGold following the exercise of the Underwriters Option. AngloGold Ashanti currently holds 65,653,870 common shares in PureGold which represents a 14.9% interest in the outstanding common shares of PureGold on a non-diluted basis. In addition, AngloGold Ashanti owns 1,653,809 PureGold warrants which if exercised in full would increase AngloGold Ashanti’s interest in PureGold to 15.2% on a partially diluted basis. Following the implementation of the Transactions, AngloGold Ashanti will hold 95,835,442 common shares in PureGold and 1,653,809 warrants which will represent an interest in PureGold of 19.6% on a non-diluted basis and 19.9% on a partially diluted basis, respectively. AngloGold Ashanti’s current interest in PureGold as well as the interest to be acquired pursuant to the AngloGold Subscription is for investment purposes and its interest may increase or decrease depending on market and other circumstances.
The Company intends to use the net proceeds raised from the Transactions to complete the ramp up of operations to design capacity at its 100%-owned PureGold Mine located in Red Lake, Ontario and for general corporate purposes.
In connection with the AngloGold Subscription, PureGold and AngloGold Ashanti will enter into a shareholder rights agreement providing AngloGold Ashanti with certain rights, standard anti-dilution and equity participation rights as well as certain rights to PureGold’s technical and scientific data.
The Transactions are expected to close on February 15, 2022 and are subject to certain conditions including receipt of all applicable regulatory approvals, the approval of the TSX Venture Exchange and, for the AngloGold Subscription, the approval of the South African Reserve Bank. Closing of the AngloGold Subscription is subject to execution of definitive documentation. The securities to be issued under the Transactions will be issued on a private placement basis and will have a hold period of four months and one day from the applicable closing date in accordance with applicable securities laws.
AngloGold Ashanti is considered a “related party” of PureGold as it currently owns approximately 14.9% of the issued and outstanding common shares of PureGold on a non-diluted basis and, accordingly, the AngloGold Subscription constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The AngloGold Subscription is exempt from the minority approval requirement of Section 5.6 and the formal valuation requirement of Section 5.4 of MI 61-101 as neither the fair market value of the AngloGold Subscription, nor the fair market value of the consideration for the AngloGold Subscription, exceeds 25% of PureGold’s market capitalization. A material change report in connection with the AngloGold Subscription will be filed less than 21 days before the closing of the AngloGold Subscription. This shorter period is reasonable and necessary in the circumstances as the Company wishes to complete the AngloGold Subscription in a timely manner.
Source: Company Press Release