Home > News > Sprott injects $15M into...

Sprott injects $15M into Red Lake's PureGold

May 21, 2020

"How much? I'll take it all." That's essentially what happened this week as billionaire gold investor Eric Sprott continued his support for Red Lake's upstart near-term producer Pure Gold Mining Inc. 

Pure Gold agreed to issue, on a non-brokered private placement basis, 9,868,421 charity flow through common shares of the Company at a price of $1.52 per FT Share for gross proceeds to PureGold of $15,000,000. Mr. Eric Sprott has agreed to be the back-end buyer of all of the FT Shares.

“PureGold has all the attributes I look for in a Company - location, grade, size and growth,” said Eric Sprott.  “PureGold’s mine in Red Lake has over 7km of strike with known high grade shoots that have only been defined down to 1,200 metres compared to 2,500 metres in the neighbouring Red Lake mine complex.  The ultra-high grade hits in the 8 zone remind me a lot of the HG Zone that built Goldcorp, as well as SMC at Macassa and the Swan Zone at Fosterville.  These are the types of discoveries that have the potential to be company makers and tend to lead to a much higher production profile than originally given credit.” 

“Mr. Sprott is a cornerstone investor of PureGold and continues to be a strong supporter of our vision to becoming a high margin, long-life gold producer uniquely positioned in the Red Lake camp,” said Darin Labrenz, President & CEO of PureGold. “We are fully funded and on-track to pour our first gold in Q4 2020 into a record high gold price environment for Canadian producers.  This new investment in exploration enables us to concurrently ramp up our focus on aggressive resource growth without impacting our capital budget for final mine completion and first gold pour.  We believe this combination of near-term cash flow through production and organic resource growth will create significant value for our shareholders in the near term.” 





The gross proceeds from the issuance of the FT Shares will be used for “Canadian exploration expenses” and will qualify as “flow-through mining expenditures” (the “Qualifying Expenditures”), as those terms are defined in the Income Tax Act (Canada), which will be renounced to the initial purchasers of the FT Shares with an effective date no later than December 31, 2020 in an aggregate amount not less than the gross proceeds raised from the issue of the FT Shares, and, if the Qualifying Expenditures are reduced by the Canada Revenue Agency, the Company will indemnify each initial purchaser of FT Shares for any additional taxes payable by such subscriber as a result of the Company’s failure to renounce the Qualifying Expenditures as agreed

It is expected that the closing of the Financing will occur on or about June 17, 2020 (the “Closing Date”) and is subject to the satisfaction of certain conditions, including receipt of all applicable regulatory approvals including the approval of the TSX Venture Exchange. The FT shares to be issued under the Financing will have a hold period of four months and one day from the applicable Closing Date in accordance with applicable securities laws.

In consideration for their services, a finders’ fee equal to 6.0% of the gross proceeds of the Financing is payable to a group of financial advisors led by Clarus Securities Inc.

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the FT shares in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the FT shares in the United States of America. The FT shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”) or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.

About Pure Gold Mining Inc.
The PureGold Red Lake Mine is Canada’s next gold mine.  Fully funded, the project is on track to deliver near term gold production into a rising Canadian gold price environment, with first production scheduled for late 2020. The orebody is situated within a seven-kilometre-long gold system that is wide open for expansion at depth and along strike, and multiple discoveries by the Company suggest potential opportunities for near-term growth.

Tags: Northern Ontario / Deals & Financial / Gold / All Articles