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Generation Mining closes $3.3m financing for Marathon Palladium project

Dec 31, 2020

Generation Mining Limited has closed a previously announced non-brokered private placement through the issuance of 4,292,367 common shares of the company issued on a flow-through basis at a price of C$0.77 per FT Share for gross proceeds of C$3,305,122.59. Eric Sprott purchased 2 million shares of the offering.

The company will incur "Canadian exploration expenses" as defined in subsection 66.1(6) of the Income Tax Act (Canada) (the "Tax Act") in an amount equal to the gross proceeds from the issuance of the FT Shares on the Marathon Property in the Province of Ontario and will renounce to subscribers in the Offering effective December 31, 2020. Such Canadian exploration expenses will also qualify as "flow-through mining expenditures" as defined in subsection 127(9) of the Tax Act.

In connection with the Offering, the Company paid an aggregate cash commission of $166,320 to certain eligible persons. All securities issued under the Offering are subject to a four-month hold period from the date of issuance in accordance with applicable securities laws. The Offering is subject to final acceptance of the Toronto Stock Exchange.

Mr. Sprott, a related party within the meaning of Multilateral Instrument 61-101 ("MI 61-101") subscribed for 2,000,000 FT Shares pursuant to the Offering, which participation constituted a related party transaction under MI 61-101. The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the participation in the Offering by Mr. Sprott does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101. The Company did not file a material change report in respect of the related party transaction at least 21 days before the closing of the Offering, which the Company deems reasonable in the circumstances in order to complete the Offering in an expeditious manner.

About Generation Mining Limited

Generation Mining's focus is the development of the Marathon Palladium Project, the largest undeveloped platinum group metal Mineral Resource in North America. The Marathon property covers a land package of approximately 22,000 hectares, or 220 square kilometres. Generation Mining acquired a 51% interest in the Marathon Project from Sibanye Stillwater in 2019 and has since increased that ownership to 80%. Upon completion of the Feasibility Study, Sibanye Stillwater has certain back-in rights that can bring its interest in the property back to 51% (see the company's press release of July 11, 2019, for more details). A feasibility study was started in the second quarter of 2020 with completion expected in the first quarter of 2021.

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