NuLegacy Gold (TSXV: NUG) announces a private placement of 100,000,000 units at a price of C$0.025 per unit to raise gross proceeds to the company of C$2.5M.
Up to 80% of the net proceeds of the offering will be used to carry out NuLegacy’s planned 2023 exploration programme of five or more reverse circulation drill holes on the company’s flagship 108km2 Red Hill property in the Cortez-gold trend of Nevada, as more particularly described in our news release of 22 August 2023, at a budgeted cost of US$1.25M (C$1.75M). The balance of the net proceeds from the offering will be used for general corporate and working capital purposes including management fees and salaries.
Additionally, drilling is expected to begin within 10 days of closing of the offering, with an initial Closing expected to occur on or about 12 October 2023, or such earlier date as the company has received subscriptions for more than 50% of the offering.
Each unit consists of one common share of the company and one transferable common share purchase warrant. Each warrant will entitle the holder to acquire one common share of the company for a five-year term following closing of the offering at an exercise price of C$0.05, subject to acceleration only in the event of a take-over bid, merger, plan of arrangement or similar business combination transaction of the company, provided the then trading price of the company’s shares is at least C$0.15 per share.
NuLegacy’s CEO Albert Matter comments that “In the event of over-subscription, the company will seek to accommodate long-term shareholders.”
The offering includes a lead order from Crescat Capital, a US based investment fund, to a minimum of 10% of the offering up to 10,000,000 Units or C$250,000.
In addition, certain directors and/or officers of NuLegacy will participate in the Offering to a minimum of 10% of the offering up to 10,000,000 Units or C$250,000, which participation will constitute a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”).
The company expects that the participation by directors and/or officers in the offering will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101 based on the fact that neither the fair market value of the Units subscribed for by the Insiders, nor the consideration for the units to be paid by the Insiders, will exceed 25% of the company’s market capitalization.
NuLegacy further understands that certain Insiders will make available for sale a portion of their existing free trading shares of the company in the market prior to closing to facilitate purchases by investors seeking free-trading shares of the company (as opposed to four months hold units), with proceeds of such Insiders sales to fund subscription for Units under the offering.
The completion of the offering is subject to, among other things, acceptance of the TSX Venture Exchange, and all securities issued pursuant to the Offering will be subject to a four month hold period from the date of closing.
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