West Red Lake raises another $30 million for Madsen restart
West Red Lake Gold Mines Ltd. has entered into an agreement with Raymond James Ltd. as sole bookrunner, on behalf of a syndicate of underwriters (collectively, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase, on a “bought deal” basis, 27,778,000 units (the “Units”) and 11,236,000 charity-flow through units (the “Charity Flow-Through Units”) of the Company at a price of C$0.72 per Unit (the “Unit Issue Price”) and C$0.89 per Charity Flow-Through Unit (the “Charity Flow-Through Issue Price”), respectively, for aggregate gross proceeds to the Company of approximately C$30 million (the “Offering”).
Each Unit will consist of one common share of the Company (“Common Shares”) and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant will entitle the holder to acquire one common share of the Company for an exercise price of $1.00 per share for 24 months from the Closing Date. The Warrants will be subject to an acceleration provision pursuant to which, in the event that the ten (10) trading day volume weighted average closing price of the Company’s Shares on the TSX Venture Exchange (the “TSX-V”) is equal to or greater than $1.70 (or such other price to be determined and agreed to by both RJL and the Company), then the Company will earn the right, by providing notice to the Warrant holder(s) (the “Acceleration Notice”), to accelerate the expiry date of the Warrants to that date which is 30 days from the date of the Acceleration Notice.
The Company has agreed to grant the Underwriters an over-allotment option to purchase up to an additional 15% of the aggregate number of Units at the Unit Issue Price, exercisable in whole or in part at any time for a period ending 30 days from the closing of the Offering.
The net proceeds pursuant to the issuance of the Units are expected to be used to continue to advance the development of a restart plan for the Madsen Gold Mine as well as for working capital and general corporate purposes. The gross proceeds pursuant to the issuance of the Charity Flow-Through Units will be used to incur qualifying Canadian development expenses on the Company’s assets.
The Units and Charity Flow-Through Units will be offered under the short form base shelf prospectus (the “Base Prospectus”) of the Company dated April 30, 2024, as supplemented by a shelf prospectus supplement (the “Supplement”) to be prepared and filed in each of the provinces of Canada, other than the Province of Quebec (collectively, the “Jurisdictions”). The Units will also be offered by way of a private placement in the United States, and in those jurisdictions outside of Canada and the United States which are agreed to by the Company and the Underwriters, where the Units can be issued on a private placement basis, exempt from any prospectus, registration or other similar requirements.
The Offering is expected to close on or about May 15, 2024 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange.
The securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any U.S. state securities laws, and may not be offered or sold in the United States without registration under the U.S. Securities Act and all applicable state securities laws or compliance with the 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 United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
ABOUT WEST RED LAKE GOLD MINES
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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