Successful New Financing by 1911 Gold Corporation
1911 Gold Corporation (TSXV: AUMB) has announced the successful completion of its latest financing initiative, a sold-out "bought deal" offering that raised approximately C$13,225,232.30 in gross proceeds. This funding success comes on the heels of notable demand from investors, leading to substantial oversubscription of the offering.
Details of the Offering
The offering comprised several components: the sale of 3,750,000 common shares at a price of C$0.20 per share, 2,924,000 common shares at C$0.342 per share, and 31,163,633 shares priced at C$0.288 each. Additionally, 10,163,000 common shares were sold for C$0.246 per share. These shares qualify under the flow-through designation per Canadian tax regulations.
Management Insights on Investor Interest
Shaun Heinrichs, President and CEO of 1911 Gold, expressed enthusiasm about the overwhelming investor interest manifest in this financing round. He highlighted the pivotal role of Eric Sprott, who increased his investment well beyond his proportional share. This influx of capital will enable the company to intensify exploration efforts and progress development activities at the True North underground mine, putting it on a trajectory for potential operational restart.
Eric Sprott's Substantial Contribution
Through 2176423 Ontario Ltd., Eric Sprott acquired 9,288,734 common shares in this offering, totaling an investment of over $1.8 million. After this transaction, Sprott's total shareholding in 1911 Gold amounts to 42,622,068 shares, representing 17.2% ownership. His long-term investment outlook positions him as a significant stakeholder in the company.
How the Funds Will Be Utilized
The company anticipates using the proceeds from the sale of these shares primarily for general corporate purposes and working capital. Specifically, the gross proceeds from the CEE Offered Shares will fund eligible Canadian exploration expenses as defined in the Tax Act. The company has committed to incurring these qualifying expenditures promptly after the offering's close.
Compensation for Underwriters
As a token of appreciation for their services, the underwriters received a cash commission totaling C$688,513.94, equivalent to 6% of the gross proceeds from the offering. Additionally, 2,505,037 non-transferable compensation options were issued, empowering them to purchase common shares at C$0.22 each over two years.
Insider Participation in the Offering
Insiders of 1911 Gold participated in the offering extensively, acquiring a total of 10,288,734 shares. This involvement presents a related-party transaction, but the company has opted for exemptions from formal valuation requirements due to the transaction's relatively minor impact on the company's market capitalization.
Forwarding Looking Endeavors
1911 Gold is firmly positioned within the Archean Rice Lake greenstone belt in Manitoba, holding over 61,647 hectares of promising land ripe for exploration. The True North mine and mill complex reflect the company’s potential to establish a vital mining district aimed at resource development.
Commitment to Stakeholder Relationships
Recognizing the traditional territory of the Hollow Water First Nation, 1911 Gold emphasizes maintaining respectful engagement and cooperation with local communities. The company is keen to foster beneficial partnerships that further their shared interests in the region.
Frequently Asked Questions
What is the purpose of the C$13.2 million raised by 1911 Gold?
The funds from the offering will primarily be used for general corporate purposes and advancing exploration and development at the True North underground mine.
Who is Eric Sprott, and what is his involvement?
Eric Sprott is a notable investor who significantly increased his stake in 1911 Gold by purchasing over 9 million shares as part of the recent offering.
What are flow-through shares?
Flow-through shares allow investors to claim tax deductions for eligible exploration expenses incurred by the company, enhancing the financial attractiveness of investments in mining firms.
What is the significance of the True North mine for 1911 Gold?
The True North mine is central to 1911 Gold's operations and future potential, setting the stage for significant exploration activities and possible operational restart.
How will the company maintain relationships with local First Nations?
1911 Gold is committed to open communication and collaboration with the Hollow Water First Nation to ensure mutual benefits from their operations in the region.
