AUXX.V · 2021-02-26 12:00:00

Goldshore and Sierra Madre Complete $25 Million Equity Financing

Financings

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE U.S.

Vancouver, BC - February 26, 2021 – Goldshore Resources Inc. (“ Goldshore”) and Sierra

Madre Developments Inc. (“Sierra Madre”) (TSX-V: SMG.H) are pleased to announce the closing

of the previously-announced brokered private placement offerings, pursuant to which Goldshore

issued an aggregate of 23,076,924 subscription receipts (the “Subscription Receipts”) at a price

of $0.65 per Subscription Receipt and Sierra Madre issued an aggregate of 13,333,335 flow-

through subscription receipts (the “Flow-Through Subscription Receipts” and together with the

Subscription Receipts, the “ Offered Securities”) at a price of $0.75 per Flow -Through

Subscription Receipt , for combined aggregate gross proceeds of $25,000,001.85 (the

“Offerings”). The Offerings were conducted by a syndicate of agents, led by Eventus Capital

Corp. (the “Lead Agent”), and included Canaccord Genuity Corp., Laurentian Bank Securities

Inc., Haywood Securities Inc., and Desjardins Securities Inc. (together with the Lead Agent, the

“Agents”).

The Offerings were undertaken in conjunction with the previously announced transaction (the

“Business Combination”), which will result in the reverse takeover of Sierra Madre by Goldshore

(the resulting entity being the “ Resulting Issuer ”). As previously announced, Goldshore also

entered into an agreement to acquire the interest of Wesdome Gold Mines Ltd. (the “Proposed

Acquisition”) in the Moss Lake gold project located in Ontario.

The Offerings and the Business Combination were originally announced by way of press releases

on January 26, 2021 and February 22, 2021.

“We are truly excited by the proposed Business Combination with Sierra Madre and acquisition

of the Moss Lake Project from Wesdome, as well as the completion of the $25M financing, which

funds are expected to advance development on the Moss Lake project. We fully believe that we

have assembled the best positioned team to advance Moss Lake, which has significant resource

growth potential along its existing historic resource and 20km+ trend. We have already identified

several areas of prospective follow up work as we are going through an extensive data compilation

exercise, and intend to work diligently with the entire team to advance activities on the ground

and unlock value from the asset,” stated Goldshore’s incoming President and Chief Executiv e

Officer, Brett A. Richards.

Each Subscription Receipt entitles the holder to receive one common share in the capital of

Goldshore (a "Goldshore Share") for no additional consideration upon satisfaction of the Escrow

Release Conditions (as defined below) . Each Flow -Through Subscription Receipt entitles the

holder to receive one flow-through common share in the capital of Sierra Madre (a "Sierra Madre

Share"), to be issued as a “flow -through share” as defined in subsection 66(15) of the Income

Tax Act (Canada) (the “ Tax Act ”), upon satisfaction of the Escrow Release Conditions. In

connection with the completion of the Business Combination, each Goldshore Share will be

exchanged into one common share of the Resulting Issuer (a “Resulting Issuer Share”).

Sierra Madre will incur (or be deemed to incur) resource exploration expenses which will

constitute “Canadian exploration expenses” as defined in subsection 66.1(6) of the Tax Act and

“flow through mining expenditures” as defined in subsection 127(9) of the Tax Act, in an amount

equal to the amount raised pursuant to the sale of Flow-Through Subscription Receipts and Sierra

Madre will renounce the Canadian exploration expenses (on a pro rata basis) to each subscriber

with an effective date of no later than December 31, 2021 in accordance with the Tax Act.

The gross proceeds of (a) the sale of Subscription Receipts , less 50% of the Agents’ cash

commission (as described below) and certain expenses of the Agents, and (b) the sale of the

Flow-Through Subscription Receipts, have been deposited in escrow until the satisfaction of the

Escrow Release Conditions (the “Escrowed Amount”).

If the Escrow Release Conditions have not been satisfied prior to June 30, 2021 , the total

escrowed amount (plus any interest earned thereon in respect of the gross proceeds from the

sale of Subscription Receipts ) will be returned to the holders (net of any applicable withholding

taxes), and the Offered Securities will be automatically cancelled and be of no further force and

effect.

The remai ning Escrow Release Conditions are summarized as follows: confirmation that all

conditions to the completion of the Proposed Acquisition have been satisfied or waived;

confirmation that all conditions to the completion of the Business Combination have been satisfied

or waived, (other than the such conditions to be satisfied at completion of the Business

Combination); receipt of all approvals required for completion of the Business Combination; the

Resulting Issuer Shares being conditionally approved for lis ting on the TSX -V; counsel to the

Resulting Issuer having delivered a standard legal opinion ; Goldshore, Sierra Madre and the

Resulting Issuer not being in breach of covenants or obligations under the transaction

agreements; and Goldshore, Sierra Madre and the Lead Agent having delivered a release notice

to the escrow agent.

In connection with the Offerings, the Agents are entitled to a cash fee equal to 6% of the

aggregate gross proceeds of the Offerings ( 4% for president’s list subscribers) (50% of which

such cash fee payable in respect of the sale of Subscription Receipts was paid to the Agent’s on

closing of the Offering) and were issued such number of compensation options (the

“Compensation Options ”) equal to 6% of the number of Offered Se curities sold under the

Offerings (4% for president’s list subscribers). Each Compensation Option issued by Goldshore

(the “Goldshore Compensation Options”) is exercisable for one Goldshore Share for a period

of two years from the satisfaction of the Escrow Release Conditions (the “Expiry Date”) at a price

of $0.65 per Goldshore Share. Each Compensation Option issued by Sierra Madre is exercisable

for one Sierra Madre Share until the Expiry Date at a price of $0.75 per Sierra Madre Share. In

connection wit h the Business Combination, each Goldshore Compensation Option will be

exchanged for one compensation option of the Resulting Issuer, which will be exercisable for one

Resulting Issuer Share at a price of $0.65 until the Expiry Date.

The Subscription Recei pts are subject to an indefinite hold period, and the Flow -Through

Subscription Receipts are subject to a four-month statutory hold period expiring on June 27, 2021.

The Resulting Issuer Shares issued in exchange for the Goldshore Shares pursuant to the

Business Combination are expected to be free of any statutory hold periods in Canada, other than

in respect of control block sales.

Upon satisfaction of the Escrow Release Conditions, it is expected that the net proceeds from the

Offerings will be used to advance development of the Moss Lake gold project located in Ontario,

Canada and for working capital and general corporate purposes.

Website: www.goldshoreresources.com

Goldshore Resources Inc.

“Galen McNamara”

Galen McNamara

CEO & Director

Sierra Madre Developments Inc.

“Hani Zabaneh”

Hani Zabaneh

CEO & Director

Cautionary Note Regarding Forward-Looking Statements

This news release contains statements that constitute “forward-looking statements.” Such forward

looking statements involve known and unknown risks, uncertainties and other factors that may

cause Sierra Madre’s, Goldshore’s and the Resulting Issuer’s actual results, performance or

achievements, or developments to differ materially from the anticipated result s, performance or

achievements expressed or implied by such forward -looking statements. Forward looking

statements are statements that are not historical facts and are generally, but not always, identified

by the words “expects,” “plans,” “anticipates,” “ believes,” “intends,” “estimates,” “projects,”

“potential” and similar expressions, or that events or conditions “will,” “would,” “may,” “could” or

“should” occur.

Forward-looking statements in this document include, among others, statements relating to

expectations regarding the completion of the Business Combination (including all required

approvals), the listing on the TSX -V, the use of proceeds from the Offerings, the satisfaction of

the Escrow Release Conditions, payment of the Agents’ commission from escrow, the conversion

of the Offered Securities, the business plans of the Resulting Issuer, and other statements that

are not historical facts. By their nature, forward -looking statements involve known and unknown

risks, uncertainties and other factors which may cause our actual results, performance or

achievements, or other future events, to be materially different from any future results,

performance or achievements expressed or implied by such forward -looking statements. Such

factors and risks include, among others: that there is no assurance that the parties hereto will

obtain the requisite director, shareholder and regulatory approvals for the Business Combination,

and there is no assurance that the Business Combination will be complet ed as anticipated, or at

all; following completion of the Business Combination, the Resulting Issuer may require additional

financing from time to time in order to continue its operations which may not be available when

needed or on acceptable terms and co nditions acceptable; compliance with extensive

government regulation; domestic and foreign laws and regulations could adversely affect the

Resulting Issuer’s business and results of operations; the stock markets have experienced

volatility that often has b een unrelated to the performance of companies and these fluctuations

may adversely affect the price of the Resulting Issuer's securities, regardless of its operating

performance; and the impact of COVID-19.

The forward-looking information contained in this news release represents the expectations of

Sierra Madre and Goldshore as of the date of this news release and, accordingly, is subject to

change after such date. Readers should not place undue importance on forward -looking

information and should not rely upon this information as of any other date. Neither Sierra Madre

nor Goldshore undertakes no obligation to update these forward -looking statements in the event

that management's beliefs, estimates or opinions, or other factors, should change.

This news re lease does not constitute an offer to sell, or a solicitation of an offer to buy, any

securities in the United States. 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 state

securities laws and may not be offered or sold within the United States or to U.S. Persons unless

registered under the U.S. Securities Act and applicable state securities laws or an exemption from

such registration is available.

Completion of the transactions are subject to a number of conditions, including but not limited to,

TSX-V acceptance and if applicable, disinterested shareholder approval. Where applicable, the

transaction cannot close until the required shareholder approval is ob tained. There can be no

assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing

statement to be prepared in connection with the transactions, any information released or

received with respect to the transaction s may not be accurate or complete and should not be

relied upon. Trading in the securities of Sierra Madre (and the Resulting Issuer) should be

considered highly speculative.

The TSX-V has in no way passed upon the merits of the proposed transaction and has neither

approved nor disapproved the contents of this news release.

← Back to feed