Not for distribution to U.S. news wire services or dissemination in the United States.
Toronto, ON / April 2, 2019 / Victoria Gold Corp. (TSX.V-VIT) (“Victoria” or the “Company”) announces today that it has closed its previously announced offering (the “Public Offering”) of common shares and “flow-through” common shares with a syndicate of underwriters (the “Underwriters”) led by BMO Capital Markets. The Public Offering consisted of 5,799,091 common shares at a price of $0.44 per common share for gross proceeds of $2,551,600, and 28,310,000 flow-through common shares at a price of $0.53 per flow-through common share for gross proceeds of $15,004,300, for aggregate gross proceeds from the Public Offering of $17,555,900. It is expected that the over-allotment option will be exercised later this week pursuant to which the Company will issue and sell up to an additional 4,221,604 common shares at a price of $0.44 per share for additional gross proceeds of up to $1,857,506.
Concurrent with the Public Offering, the Company completed the previously announced private placement (the “Private Placement”) with Osisko Gold Royalties Ltd. (“Osisko”) at a price of $0.44 (being the price per common share under the Public Offering), pursuant to which they acquired in aggregate approximately 34,090,909 common shares for gross proceeds from the Private Placement of $15,000,000.
The net proceeds of the Public Offering and the Private Placement are expected to be used to advance construction at the Eagle Gold Project at the Company’s Dublin Gulch property, including mechanical and piping, power, electrical and instrumentation, EPCM and construction support. The gross proceeds from the sale of the flow‐through common shares will be used for expenditures which qualify as Canadian development expenses (“CDE”) (within the meaning of the Income Tax Act (Canada)), including clearing, removing overburden and stripping to support pre-commercial production activities and early operations support. The Company will renounce such CDE with an effective date of no later than December 31, 2019.
Pursuant to existing participation rights granted by the Company to each of Osisko and Orion Mine Finance Management II Limited (“Orion”, and together with Osisko, the “Insiders”), each of Osisko and Orion exercised its right to participate in the Public Offering and Private Placement by purchasing 34,090,909 common shares and 13,636,364 common shares, respectively. As a result, each of Osisko and Orion hold an approximate 18.1% and 19.2% interest in the Company after giving effect to the Public Offering and Private Placement, respectively.
The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Participation by the Insiders in the Public Offering and the Private Placement was considered a “related party transaction” pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company was exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the Insiders’ participation in the Offering in reliance of sections 5.5(b) and 5.7(1)(a) of MI 61-101. A material change report was filed in connection with the participation of Insiders in the Public Offering and Private Placement less than 21 days in advance of the closing of the Public Offering and Private Placement, which the Company deemed reasonable in the circumstances so as to be able to avail itself of potential financing opportunities and complete the Offering and Private Placement in an expeditious manner.
The common shares issued pursuant to the Private Placement are subject to a statutory four month and one day hold period.
About the Dublin Gulch Property
Victoria Gold's 100%-owned Dublin Gulch gold property is situated in central Yukon Territory, Canada, approximately 375 kilometers north of the capital city of Whitehorse, and approximately 85 kilometers from the town of Mayo. The Property is accessible by road year round, and is located within Yukon Energy's electrical grid.
The Property covers an area of approximately 555 square kilometers, and is the site of the Company's Eagle Gold Deposit. The Eagle Gold Mine is under construction and is expected to be Yukon's next operating gold mine. The Eagle and Olive deposits, include Proven and Probable Reserves of 2.7 million ounces of gold from 123 million tonnes of ore with a grade of 0.67 grams of gold per tonne, as outlined in a National Instrument 43-101 feasibility study entitled Report for the Eagle Gold Project and dated October 26, 2016. The NI 43-101 Mineral Resource for the Eagle and Olive deposits has been estimated, as at December 5, 2018, to host 208 million tonnes averaging 0.66 grams of gold per tonne, containing 4.4 million ounces of gold in the "Measured and Indicated" category, inclusive of Proven and Probable Reserves, and a further 20 million tonnes averaging 0.64 grams of gold per tonne, containing 0.4 million ounces of gold in the "Inferred" category.
Cautionary Language and Forward-Looking Statements
Neither the TSX Venture Exchange, nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release. This press release includes certain statements that may be deemed "forward-looking statements". All statements in this discussion, other than statements of historical facts, that address statements the Public Offering and the Private Placement, including the use of proceeds therefrom, exercise of the over-allotment option, future exploration drilling, exploration activities, anticipated completion of mine construction, anticipated metal production, internal rate of return, estimated ore grades, commencement of production estimates and projected exploration and capital expenditures (including costs and other estimates upon which such projections are based) and events or developments that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include metal prices, exploration successes, continued availability of capital and financing (including the flow-through financing outlined above), unfavourable weather conditions, delays in the delivery of materials to the mine site, and general economic, market or business conditions. Accordingly, readers should not place undue reliance on forward-looking statements.
For Further Information Contact:
President & CEO
Victoria Gold Corp