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Delta Resources Announces C$7 Million Bought Deal Private Placement of Flow-Through Units

Apr 30, 2023

Delta Resources Limited entered into an agreement with Cormark Securities Inc., as lead underwriter to purchase, on a "bought deal" private placement basis 7,143,000 "flow-through" (FT) units of the company at a price of $0.63 per FT Unit for gross proceeds of $4,500,090.
Another 5,556,000 units of the Delta Resources were purchased  at a price of $0.45 per HD Unit (the "HD Issue Price") for gross proceeds of $2,500,200, for aggregate gross proceeds to the company of approximately $7.0 million (collectively, the "Offering").
Delta Resources Limited is a Canadian mineral exploration company focused on growing two very high-potential gold and base-metal projects in Canada. DELTA-1 covers 58.3 square kilometres located 50 kilometres west of Thunder Bay, Ontario where a gold mineralized zone 1500 metres long was outlined through drilling in a multi-kilometre-scale intense alteration halo. DELTA-2 VMS and DELTA-2 GOLD covers 194 square kilometres in the prolific Chibougamau District of Quebec.
The Offering is expected to close on or about May 17, 2023, or such other date as the company and the Underwriters may agree and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals including the acceptance of the TSX Venture Exchange.
Each FT Unit will be comprised of one common share of the company and one-half of one common share purchase warrant (each whole common share purchase warrant, a "Warrant"), each of which will qualify as a "flow-through share" (within the meaning of subsection 66(15) of the Income Tax Act (Canada). Each HD Unit will comprise one common share of the company and one-half of one Warrant. Each Warrant will entitle the holder thereof to purchase one common share of the company (a "Warrant Share") at an exercise price of C$0.63 for a period of 2 years following the closing of the Offering. For greater certainty, the proceeds from the exercise of the Warrants will not be flow-through eligible.
Flow-through shares are a financing tool available to a Canadian resource company that allows it to issue new equity (shares) to investors at a higher price than it would receive for “normal” shares, thereby assisting it in raising money for exploration and development. Investors are willing to pay more for flow-through shares because the investors are permitted to claim deductions for the issuing corporation’s CEE (and in some cases CDE). This reduces the investor’s Canadian taxes.
A bought deal is a securities offering in which an investment bank commits to buy the entire offering from the client company. A bought deal eliminates the issuing company’s financing risk, ensuring that it will raise the intended amount.
HD Units means the hard dollar units issued in connection with the Bought Deal Private Placement with each unit being comprised of one Common Share and one have of one Bought Deal Private Placement Warrant
The underwriters will have the option, exercisable in whole or in part at any time up to 48 hours prior to the closing of the offering, to arrange for the purchase of up to that number of additional HD Units at the HD Issue Price and/or FT Units at the FT Issue Price as is equal to 15% of the number of securities issued in connection with the offering.
The net proceeds from the issue of the HD Units will be used for working capital and general corporate purposes.
The company will use an amount equal to the gross proceeds received by the company from the sale of the FT Units, pursuant to the provisions in the Income Tax Act (Canada), to incur eligible "Canadian exploration expenses" that qualify as "flow-through mining expenditures" as both terms are defined in the Income Tax Act (Canada) and "eligible Ontario exploration expenditures" as defined in subsection 103(4) of the Taxation Act, 2007 (Ontario) (the "Qualifying Expenditures") related to the company's projects in Ontario, on or before December 31, 2024, and to renounce all the Qualifying Expenditures in favour of the subscribers of the FT Units effective December 31, 2023.
The Offering will be made way of private placement pursuant to applicable exemptions from the prospectus requirements in each of the provinces of Canada and, in the case of the HD Units, such other jurisdictions, in each case in accordance with all applicable laws, provided that no prospectus, registration statement or other similar document is required to be filed in such jurisdiction.
The securities offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, or any state securities law, and may not be offered, sold or delivered, directly or indirectly, within the United States, or to or for the account or benefit of U.S. persons, absent registration or an exemption from such registration requirements. This news release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
 For further information:                      Frank Candido, Chairman, VP Corporate Communications, Tel: 514-969-5530, fcandido@deltaresources.ca


Andre Tessier, CEO and President,      Tel: 613-328-1581, atessier@deltaresources.ca

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