Damara to complete shares for debt $210,000
NOT FOR DISTRIBUTION TO U.S NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
NEWS RELEASE
Damara to complete shares for debt $210,000
January 17, 2017 TSX-V: DMR
DAMARA GOLD CORP. (TSX-V:DMR) (“Damara” or the “Company”) announces that it has entered into a debt settlement agreement (the “Debt Agreement“) with Colorado Resources Ltd. (“Colorado”) to settle a portion of the outstanding amount of $225,000 plus interest (the “Debt”) in advances received in connection with the Company’s former Namibia project. Subject to TSX Venture Exchange ("Exchange") approval, Damara has agreed to settle $210,000 of the Debt by the issuance of the issuance of 4,200,000 common shares at a deemed issue price of $0.05 per share (the “Debt Shares”).
The Debt was incurred wherein Colorado advanced funds in connection with the Company’s former option on the DGP Project located in Namibia whilst the parties contemplated a proposed transaction. The parties did not conclude such agreement and as such the advances were recorded as interestbearing advances (15% per annum). The remaining balance of the Debt in the amount of $79,479 in principle and interest will remain outstanding and non-interest bearing and shall be settled at a future date as the parties agree. Upon completion of the Debt Settlement, Colorado will hold a 19.79% interest in the common shares of Damara.
As Damara and Colorado have two common directors the Debt Settlement will constitute a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”), which is incorporated into Policy 5.9 of the Exchange Corporate Finance Manual.
The independent board members of the Company have determined that neither the value of the shares to be issued to Colorado, nor the aggregate debt settled in connection with the Debt Settlement will exceed 25% of the Company’s market capitalization on the date hereof. The Company intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(a) of MI 61-101 as neither the fair market value of the Debt Shares nor the debt exceeds 25% of the Company’s market capitalization.
The securities issued pursuant to the Debt Settlement will be subject to a four-month hold period from the date of issuance. Completion of the Debt Settlement is subject to acceptance by the Exchange.
About Damara
Damara Gold Corp. is a TSX Venture listed Canadian public company with a Board of Directors seasoned in the mineral exploration industry with extensive and successful international experience with a focus on identifying and acquiring prospective and under-explored gold properties worldwide.
ON BEHALF OF THE BOARD OF DIRECTORS OF DAMARA
“Larry Nagy”
Larry Nagy, Chief Executive Officer
For additional information visit Damara’s website at www.damaragoldcorp.com or contact:
Damara Gold Corp.
Larry Nagy
Chief Executive Officer or
Terese Gieselman Chief Financial Officer
Ph: (250-768-1168)
NR: 17-01
Neither the 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.
Statements Regarding Forward-Looking Information
Certain statements contained in this news release may contain forward-looking information within the meaning of Canadian securities laws. Such forward-looking information is identified by words such as “estimates”, “intends”, “expects”, “believes”, “may”, “will” and include, without limitation, statements regarding the company’s plan of business operations (including plans for progressing assets), estimates regarding mineral resources, projections regarding mineralization and projected expenditures. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, metal prices, risks inherent in the mining industry, financing risks, labour risks, uncertainty of mineral resource estimates, equipment and supply risks, title disputes, regulatory risks and environmental concerns. Most of these factors are outside the control of the company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933 (the “1933 Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration is available.