NexGold and Signal Gold Announce Oversubscription and Upsizing of Concurrent Financing up to a Total of $17 million
Not for distribution to U.S. newswire services or dissemination in the United States
TORONTO, Oct. 23, 2024 (GLOBE NEWSWIRE) -- NexGold Mining Corp. (TSXV:NEXG, OTCQX:NXGCF) ("NexGold") and Signal Gold Inc. (TSX:SGNL, OTCQB:SGNLF) ("Signal") are pleased to announce that, due to significant demand, its previously announced Concurrent Financing (as defined below) has been oversubscribed and the companies are increasing the aggregate financing size to up to C$17 million, subject to an option to further increase the Hard Dollar Financing (as defined below) by an additional 15%.
The Concurrent Financing is being carried out in connection with the proposed plan of arrangement, pursuant to which NexGold will acquire all of the shares of Signal to create a near-term gold developer, advancing NexGold's Goliath Gold Complex Project ("Goliath Project") in Northern Ontario and Signal's Goldboro Gold Project ("Goldboro Project") in the historic Goldboro Gold District in Nova Scotia (the "Transaction").
In addition to the exercise of their respective options to increase the size of the Concurrent Financing, the parties announce that the previously announced private placement of units ("NFT Units") at a price of C$0.08705 per NFT Unit, comprised of one common share in the capital of Signal (a "Signal Share") and one-half of one share purchase warrant (each whole warrant, an "NFT Unit Warrant"), has been amended to a subscription receipt financing.
Pursuant to the revised financing structure, Signal will now offer up to 103,388,857 subscription receipts (the "Signal Subscription Receipts") at a price of $0.08705 per Signal Subscription Receipt for gross proceeds of up to $9 million (the "Hard Dollar Financing"), with an option (the "Option") to offer up to an additional 15,508,328 Signal Subscription Receipts for additional gross proceeds of up to $1,350,000. The Signal Subscription Receipts will be issued by Signal and will automatically convert into NFT Units, upon satisfaction or waiver of certain release conditions (including the satisfaction of all conditions precedent to the completion of the Transaction, other than those conditions that can only be satisfied at the effective time of the transaction, including, but not limited to, the issuance of the consideration shares to shareholders of Signal) (the "Escrow Release Conditions"). Each NFT Unit Warrant will entitle the holder thereof to purchase one Signal Share at a price of $0.11818 for a period of 24 months following the issue date of the NFT Unit Warrant, subject to customary adjustments in accordance with the terms of the warrant certificates.
Each Signal Share issued on conversion of the Signal Subscription Receipts will then be exchanged for 0.1244 (the "Exchange Ratio") of a common share of NexGold (each whole share a "NexGold Share") pursuant to the terms of the Transaction. Further, NFT Unit Warrants issued on conversion of the Signal Subscription Receipts will be adjusted in accordance with their terms such that the NFT Unit Warrants will be exercisable to acquire NexGold Shares based on the Exchange Ratio.
The terms of the flow-through offering of NexGold will remain unchanged from what was previously announced other than the increase in the amount of the offering. NexGold will now offer up to 10,000,000 units ("FT Units") at a price of C$0.80 per FT Unit, with each FT Unit comprised of one flow-through common share and one-half of one warrant, for aggregate gross proceeds of up to $8 million (the "FT Financing" and together with the Hard Dollar Financing, the "Concurrent Financing").
The net proceeds of the Hard Dollar Financing are expected to be used by the combined company to fund the retirement of certain debt, the exploration and advancement of the Goliath Project and Goldboro Project and for working capital and general corporate purposes. An amount equal to the gross proceeds from the issuances of the FT Shares will be used to fund advancement of NexGold's projects (which would include Signal's projects assuming closing of the Transaction). NexGold will, in a timely and prescribed manner and form, incur expenses which will: (i) constitute "Canadian exploration expenses", and (ii) constitute "flow-through mining expenditures", (as all such terms are defined in the Income Tax Act (Canada)), in an amount equal to the gross amount raised pursuant to the sale of FT Shares. NexGold will, in a timely and prescribed manner and form, renounce the Canadian exploration expenses (on a pro rata basis) to each subscriber with an effective date of no later than December 31, 2024, in accordance with the Income Tax Act (Canada), as applicable, all in accordance with the terms of the subscription and renunciation agreements to be entered into by NexGold and the subscribers in the FT Financing.
It is anticipated that the Hard Dollar Financing and the FT Financing will close concurrently in early November 2024.
Completion of the Concurrent Financing is subject to, as applicable, Toronto Stock Exchange, TSX Venture Exchange and other necessary regulatory approvals. The conversion of the Signal Subscription Receipts to NFT Units is subject to the escrow release conditions, including requisite shareholder approval of the Hard Dollar Financing by Signal shareholders.
In connection with the Concurrent Financing, it is anticipated that each of Signal and ...
