TUDOR GOLD ARRANGES $9.3 MILLION PRIVATE PLACEMENT WITH MR. ERIC SPROTT
VANCOUVER, BC, June 15, 2020 - Tudor Gold Corp. (TSXV: TUD) (Frankfurt: TUC) (the "Company" or "Tudor Gold") is pleased to announce that the Company intends to complete a non-brokered private placement of up to 6,652,700 common shares of the Company that will qualify as "flow-through shares" (within the meaning of subsection 66 (15) of the Income Tax Act (Canada)) to be issued as part of a charity arrangement ("Charity FT Shares") at a price of $1.40 per Charity FT Share for aggregate gross proceeds of C$9.3 million (the “Offering”). The Offering is expected to close on or about July 7, 2020.
Subject to and concurrently with the completion of the Offering, Mr. Eric Sprott has agreed to be the back-end buyer of all of the shares issued in connection with the Offering through 2176423 Ontario Ltd., a corporation which is beneficially owned by him. Following the closing of the Offering, it is anticipated that Mr. Sprott will beneficially own and control 32,340,619 common shares, representing approximately 19.9% of the issued and outstanding common shares of the Company on a non-diluted basis. Currently, Mr. Sprott beneficially owns and controls 25,687,919 common shares, representing approximately 16.6% of the issued and outstanding common shares of the Company on a non-diluted basis. Mr. Sprott has agreed to enter into a support agreement with the Company in connection with any takeover bid or business combination supported by management.
Tudor Gold anticipates using an amount equal to the gross proceeds received by the Company from the sale of the Charity FT Shares, pursuant to the provisions in the Income Tax Act (Canada) (“ITA”), to incur eligible "Canadian exploration expenses" that qualify as "flow-through mining expenditures" as both terms are defined in the ITA (the "Qualifying Expenditures") on or before December 31, 2021, and to renounce all the Qualifying Expenditures in favour of the subscribers of the Charity FT Shares effective December 31, 2020.
In connection with the Offering, the Company expects to pay a finder’s fee equal to 2% of the gross proceeds of the Offering to Paradigm Capital Inc.
Mr. Sprott is an insider of the Company and as such, his participation in the Offering is considered a "related party transaction" within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). It is anticipated that the related party transaction will be exempt from minority approval and formal valuation requirements pursuant to the exemptions contained in Sections 5.5(a) and 5.7(1)(a) of MI 61-101, as neither the fair market value of the FT Shares to be purchased on behalf of Mr. Sprott nor the consideration to be paid by him exceeds 25% of the Company's market capitalization.
The Offering is subject to regulatory approval and any changes to the ITA prior to closing that impact the proposed transaction. All securities issued pursuant to the Offering will have a hold period of four months and one day.
The securities have not been, and will not be, registered under the Unites States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any U.S. state security laws, and may not be offered or sold in the Unites States without registration under the U.S. Securities Act and all applicable state securities laws or compliance with requirements of an applicable exemption therefrom. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the Unites States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
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