Premier Gold Mines Ltd.’s [PG-TSX] wholly owned subsidiary i-80 Gold Corp., has entered into an agreement with a syndicate of underwriters led by CIBC Capital Markets where the company proposes to issue and sell, on a private placement basis, 34 million subscription receipts at a price of $2.60 per subscription receipt for aggregate gross proceeds of up to $88.4-million.
In addition, the company will grant the agents an option, exercisable in whole or in part at any time up until 48 hours prior to the Closing Date to purchase at the Issue Price up to such number of additional Subscription Receipts of the company as is equal to 15% of the Offering.
Pursuant to the arrangement agreement dated December 16, 2020 among Premier, Equinox Gold Corp. and i-80, whereby Equinox Gold agreed to acquire all of the outstanding shares of Premier, Premier will concurrently spin-out to its shareholders the shares of i-80, in each case, by way of a statutory plan of arrangement.
Upon completion of the arrangement, i-80 will indirectly hold all of Premier’s U.S.-based assets including the South-Arturo and McCoy-Cove properties in Nevada. Following completion of the Arrangement, i-80 intends to complete Premier’s previously announced acquisition of the Getchell Project in Nevada.
Each Subscription Receipt will be automatically exchanged for one common share of the company upon satisfaction of certain escrow release conditions which will include the completion of the Arrangement and the conditional approval of the TSX for the listing of the common shares issuable on exchange of the Subscription Receipts. In conjunction with the offering, Equinox Gold has agreed to subscribe for 30% of the aggregate number of Subscription Receipts to be issued under the Offering, up to a maximum aggregate subscription price of ~C$28.3 mm ($22.5 mm) and it is expected that management and affiliates will subscribe for up to ~C$5.8mm ($4.6 mm).
Proceeds of the offering are expected to be used for working capital and to pay for exploration and development expenses of mining projects, and to fund the cash portion of the purchase price of the Getchell gold project from Waterton Global Resource Management, Inc. and its affiliates.