TDG Gold arranges $35 million financing

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TDG Gold Corp. [TDG-TSXV] said Wednesday it will raise at least $35 million through a brokered private placement of subscription receipts priced at 50 cents each. The financing is connected to TDG’s planned acquisition of the Nueva Esperanza silver-gold project in Chile.

On October 13, 2021, TDG said it had signed a binding definitive agreement with ASX-listed Kingsgate Consolidated Ltd. for the acquisition of the advanced stage Nueva Esperanza project, which is located in the Maricunga Belt of the Atacama Region of northern Chile.

The company said the agreement supersedes a non-binding letter of intent announced in June 29, 2021.

Under the terms of the financing, each subscription receipt will entitle the holder to receive one unit of the company consisting of one common share of the company and one-half of one common share purchase warrant.

Net proceeds of the offering will be used to fund the payment of the first tranche of the purchase price of the acquisition, which will be due on closing, as well as for exploration at Nueva Esperanza and the company’s other mineral projects.

TDG is already a major holder of mineral claims and mining leases in the historical Toodoggone production corridor of north-central British Columbia.

The Nueva Esperanza project is located in the northern half of the Maricunga Belt, 140 kilometres northeast of the city of Copiapo, the regional mining centre. It is situated at an elevation of between 4,000 and 4,200 metres and encompasses three mining area, Arqueros, Chimberos and Teterita, with permits for development. The project also comes with associated water rights.

Under the agreement, TDG will pay Kingsgate the following amounts, including $25 million cash on closing, 14% of TDG’s outstanding common shares, as well as up to $25 million in future milestone payments, of which up to $10 million may be settled in TDG’s common shares.

The applicable milestones include a $6.2 million cash payment on or before the date that is three months after the date that TDG completes a feasibility study, and a payment of $5 million cash or 10 million common shares on or before the date that a construction decision is made.

The milestones also include a cash payment of $5 million or 10 million shares on or before the first anniversary of the commencement of production and an $8.7 million cash payment on or before the second anniversary of commercial production.

Under an investor rights agreement, Kingsgate is entitled to designate one nominee to TDG’s board of directors as long as it owns at least 10% of TDG’s outstanding shares.

For 24 months following the date of closure, Kingsgate will maintain the right to participate in the issuance of securities offerings in order to maintain its percentage interest, and/or to increase its percentage ownership in TDG to up to 19.9%.

In early trading Wednesday, TDG Gold shares advanced on the news rising 1.6% or $0.01 to 65 cents. The shares are currently trading in a 52-week range of 75 cents and 24 cents.


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