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West Red Lake Gold closes $7 million flow-through private placement

Aug 14, 2023

West Red Lake Gold Mines Ltd.  announces the closing of its previously announced non-brokered private placement for gross proceeds of $7,000,000 from the sale of 10,000,000 flow-through shares at $0.70/FT Share. 

The Company intends to use the proceeds from the Offering for the exploration and advancement of the Company’s properties in Red Lake, Ontario. 

Proceeds from the sale of Flow-Through Shares will be used to incur "Canadian exploration  expenses" as defined in subsection 66.1(6) of the Income Tax Act and "flow through mining  expenditures" as defined in subsection 127(9) of the Income Tax Act. Such proceeds will be  renounced to the subscribers with an effective date not later than December 31, 2023 and  incurred no later than December 31, 2024, in the aggregate amount of not less than the total  amount of gross proceeds raised from the issue of FT Shares. 

Certain Insiders of the Company purchased FT Shares under the Offering, constituting, to that  extent, a “related party transaction” as defined under Multilateral Instrument 61-101 (“MI 61- 101”). The Company has relied on the exemptions from the formal valuation and minority  shareholder approval requirements of MI 61-101, as neither the fair market value of the  securities distributed in the Offering nor the consideration received for those securities, in so far  as the Offering involves the directors and officers, exceeds 25% of the Company’s market  capitalization. The Offering remains subject to final approval of the TSX Venture Exchange. 

The connection with the financing, the Company paid an aggregate cash finders fee of  $216,288.45 of which $64,800.12 was to Accilent Capital Management Inc., $55,500.06 to Red  Cloud Securities Inc., $45,840.06 to Canaccord Genuity, $24,000.06 to Cypress Capital Capital  Management Ltd., $14,400.12 to PI Financial Corp., $9,900.03 to Haywood Securities Inc., $1,260  to StephenAvenue Securities Inc. and $588 to Leede Jones Gable Inc.

The securities issued under this Offering are subject to a four-month hold period ending on  December 12, 2023. The securities described herein have not been, and will not be, registered under the United States Securities Act, or any state securities laws, and accordingly may not be  offered or sold within the United States except in compliance with the registration requirements  of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions  therefrom. This press release does not constitute an offer to sell or a solicitation to buy any securities in any jurisdiction. 

Deferred Consideration Payment to Sprott 

Further to an unsecured convertible promissory note dated June 16, 2023 in the amount of  US$6,783,932 for deferred consideration related to the acquisition of Pure Gold Mining Inc. (the  ”Obligation”) between the Company and a fund managed by Sprott Resource Lending Corp (“Sprott”), the Company has received A Conversion Election Notice from Sprott to convert  US$1,250,838 of the Obligations into 2,400,000 common shares in the capital of the Company at  a purchase price of C$0.70 per common share of the Company. (Refer to news release of June 19, 2023 for more details.) Issuance of the 2,400,000 common shares are subject to final approval of the TSX Venture Exchange. 

Investor Relations Contract with Zinger Ventures Inc. 

The Company has entered into a consulting agreement (the "Consulting Agreement") with Zinger Ventures Inc. (the "Consultant"), based in Vancouver, British Columbia, pursuant to which the Consultant will provide the Company with investor relations services (the "Services"). The  Consulting Agreement effective June 1, 2023 has an initial term of six (6) months, unless terminated earlier in accordance the Consulting Agreement, and which may be extended for ensuing one month terms by agreement in writing between the Consultant and the Company. 

The Services provided by the Consultant will include, but not be limited to, consulting with the Company's management concerning marketing and investor relations services, building relationships with the Company's investors, and attending conferences while representing the Company. 

As consideration for the provision of the Services and in accordance with the terms and provisions of the Consulting Agreement, the Company will (i) pay the Consultant a monthly fee  of $5,000 plus GST, (ii) grant the Consultant 300,000 stock options (the "Options"), and (iii) reimburse the Consultant for pre-approved out of pocket expenses actually and properly incurred by the Consultant in connection with the Services. The Options will vest in stages over a 12 month period with 75,000 Options vesting every three months following the grant date (June  26, 2023) 

The Consultant and its principal, Dustin Zinger, are arm's length from the Company and hold  directly, or indirectly 17,500 common shares of the Company. The Company's engagement of  the Consultant and the issuance of the Options are subject to the acceptance of the TSX Venture Exchange

Marketing Agreement with Gold Standard Media, LLC 

The Company has entered into a 12 month marketing agreement (the “Marketing Agreement”)  with Gold Standard Media, LLC (“GSM”), an internet marketing and advertising company, for an  aggregate consideration of US$500,000. GSM will provide marketing services including email  marketing campaigns, landing pages, advertisements, and other related services to assist the Company in raising public awareness of the Company and enhance its online presence.  

GSM is a limited liability company existing under the laws of the State of Texas with an office at  723 W, University Ave. #110-283 Georgetown Texas. GSM uses third party service providers for  the purpose of these marketing activities. The Marketing Agreement is subject to TSX Venture  approval.  


West Red Lake Gold Mines Ltd. is a mineral exploration company that is publicly traded and  focused on advancing and developing its flagship Madsen Gold Mine and the associated 47 km2 highly prospective land package in the Red Lake district of Ontario. The highly productive Red  Lake Gold District of Northwest Ontario, Canada has yielded over 30 million ounces of gold from  high-grade zones and hosts some of the world's richest gold deposits. WRLG also holds the wholly  owned Rowan Property in Red Lake, with an expansive property position covering 31 km2 

including three past producing gold mines - Rowan, Mount Jamie, and Red Summit. 

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