Sanatana Resources Inc. (“Sanatana” or the “Company”: TSX-V: STA) has closed its previously announced acquisition of the Gold Strike Two Project (the “Project”). The acquisition of the Project (the “Transaction”) was completed pursuant to a quartz claim purchase agreement dated May 5, 2025 (the “Definitive Agreement”) with LIRECA Resources Inc. (“LIRECA”).
Peter Miles, CEO of Sanatana commented: “We are pleased with the completion of the LIFE offering and the concurrent private placement and the strong interest the private placements received in the market. The acquisition of the Gold Strike Two Project positions Sanatana as one of the few publicly traded companies with a prospective land position in the Rogue Plutonic Complex region which has received significant industry recognition from Snowline Gold Corp.’s recent Valley discovery.”
John Fiorino, principal of the Florin Group commented: “The Florin Group is pleased to have closed the Transaction and looks forward to engaging in further discussions with Sanatana’s management to explore possible additional mineral property transactions, identifying opportunities where our complementary strengths can drive mutually beneficial transactions.”
Acquisition of the Project
As consideration for the Transaction, Sanatana paid cash consideration of $250,000 on closing. Pursuant to the terms of the Definitive Agreement, a further $250,000 is held in escrow and will be payable to the Florin Group within 90 days of closing (the “Escrowed Funds”). The payment date of the Escrowed Funds is subject to acceleration if Sanatana raises $300,000 or more in equity or debt financing within 90 days post closing.
Additionally, Sanatana issued 6,000,000 common shares to LIRECA on closing (the “Consideration Shares”). The Consideration Shares were issued pursuant to a prospectus exemption and are subject to a statutory restricted period ending on October 5, 2025. As a result of the issuance of the Consideration Shares, LIRECA became an insider of the Company pursuant to Canadian securities laws and will file an early warning report (and associated news release) in accordance with the requirements of National Instrument 62-104 – Take-Over Bids and Issuer Bids.
The Project is subject to a 3% net smelter returns royalty, an annual advance royalty payment, and a bonus payment.
Pursuant to the Definitive Agreement, LIRECA has the right, but not the obligation, to nominate one director to the Company’s board of directors.
No finder’s fee was paid in connection with the Transaction.
Closing of Concurrent LIFE Offering and Private Placement
In connection with the Transaction, Sanatana concurrently closed two non-brokered private placements for cumulative gross proceeds of $1,380,000 from the sale of 13,800,000 units of the Company (each, a “Unit”) at a price of $0.10 per Unit.
3,660,000 Units were offered to investors under the listed issuer financing exemption (the “LIFE Exemption”) under Part 5A of National Instrument 45-106 – Prospectus Exemptions (the “LIFE Offering”) and 10,140,000 Units are offered under the concurrent private placement offering (the “Concurrent Offering”, and together with the LIFE Offering, the “Offerings”). An offering document related to the LIFE Offering (the “Offering Document”) is accessible under the Company’s profile at www.sedarplus.ca and on the Company’s website at www.sanatanaresources.com. The Offering Document was originally filed on May 15, 2025, and was amended and restated on May 29, 2025. The minimum amount for the Offerings was the full amount of $1,380,000 which included a 15% over-allotment ($180,000), which was exercised in full.
Each Unit is comprised of one common share in the capital of the Company (a “Share” and collectively, the “Shares”) and one Share purchase warrant (a “Warrant”). Each Warrant entitles the holder to purchase one additional Share (a “Warrant Share”) at a price of $0.12 per Warrant Share until June 4, 2026 (the “Expiry Date”). The Warrants are non-transferable.
The Warrants are subject to an acceleration clause whereby if the closing price of the Shares of the Company on the TSX Venture Exchange (the “TSXV”) is equal to or exceeds $0.25 for 10 consecutive trading days (with the 10th such trading date hereafter referred to as the “Eligible Acceleration Date”), the Expiry Date shall accelerate to the date which is 30 calendar days following the date a news release is issued by the Company announcing the reduced Warrant term, provided, no more than five business days following the Eligible Acceleration Date: (i) the news release is issued; and (ii) notices are sent to all Warrant holders.
The LIFE Offering was made to purchasers resident in all provinces of Canada, except Quebec, pursuant to the LIFE Exemption. Securities issued from the sale of Units to Canadian resident subscribers under the LIFE Offering are not subject to a hold period under applicable Canadian securities laws. Insiders and certain consultants that participated in the LIFE Offering are subject to a four-month hold period in respect of their securities pursuant to applicable policies of the TSXV.
The Concurrent Offering was completed on the same terms as the LIFE Offering for 10,140,000 Units for gross proceeds of $1,140,000. Securities issued from the sale of Units under the Concurrent Offering are subject to a four month and one day hold period from the date of issue.
In connection with the Offerings, Sanatana was permitted to pay a cash commission finder’s fee of up to 5% to eligible arm’s length parties in accordance with the polices of the TSXV in consideration for their efforts in introducing subscribers to the Company, as set out in the Offering Document. Sanatana is pleased to announce that the Company did not pay any finder’s fees in connection with the Offerings.
Certain insiders of the Company subscribed for Units under the Offerings. These issuances are considered to be “related party transactions” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company relied on exemptions from the formal valuation requirements of MI 61-101 pursuant to section 5.5(a) and the minority shareholder approval requirements of MI 61-101 pursuant to section 5.7(1)(a), as the fair market value of the transaction, insofar as it involves interested parties, does not exceed 25% of the Company’s market capitalization.
Insiders of the Company subscribed for 40,000 Units under the LIFE Offering and 1,510,000 Units under the Concurrent Offering.
The Company intends to use the net proceeds from the Offerings: (i) to satisfy the cash consideration for the Transaction, (ii) general working capital expenses, and (iii) exploration expenses for the Project. Under the terms of a $200,000 secured promissory note (the “Promissory Note”) the Company issued on December 31, 2024, the Company must repay the Promissory Note in full if it raises at least $800,000 in debt or equity financing. Due to the Offerings, the Promissory Note will require repayment or conversion of the note in full. The Promissory Note is held by an affiliate of Florin Group. A full breakdown of the net proceeds from the Offerings can be found in the Offering Memorandum.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This news release will not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
