Galleon Gold Completes $3M Private Placement of Convertible Debentures with Lead Order from Eric Sprott
Galleon Gold Completes $3M Private
Placement of Convertible Debentures with
Lead Order from Eric Sprott
Toronto, Ontario--(Newsfile Corp. - April 19, 2024) -
Galleon Gold Corp.
(TSXV: GGO) (FSE: 3H90)
(the "
Company
" or "
Galleon Gold
") is pleased to announce that it has closed a second and final
tranche of a non-brokered private placement offering of convertible debenture units (the "
Debenture
Units
") at a price of $1,000 per Debenture Unit.
The second tranche consists of 1,968 Debenture Units
for proceeds of C$1,968,000. Aggregate gross proceeds from the first tranche and together with the
second tranche (the "
Offering
"), are C$3,000,000 from the issuance of 3,000 Debenture Units.
Comment from the CEO
David Russell, CEO and President of Galleon Gold comments,
"We would like to thank our current
shareholders who participated in this offering and welcome several new investors including Michael
Gentile. We would also like to acknowledge Eric Sprott for his consistent support of the Company
since 2020.
"
The Offering
Each Debenture Unit consists of $1,000 in principal of convertible debentures (the "
Debentures
") and
3,030 common share purchase warrants (the "
Warrants
") of the Company. Each Warrant will be
exercisable to acquire one common share of the Company (a "
Warrant Share
") for a period of three
years (3) from the date of issuance at an exercise price of $0.25 per Warrant Share. The Debentures will
bear interest at a rate of 7.5% per annum from the date of issuance (the "
Issue Date
") until the Maturity
Date (in each case calculated on the basis of a 365-day year; 366 days in a leap year) calculated and
payable semi-annually in arrears and will have a three-year (3) term (the "
Term
"). Holders shall have the
option cause the Company to redeem the Debentures on the 24-month anniversary of the Debentures by
providing written notice to the Company at least 15 days prior to the 24-month anniversary of the
Debentures.
During the Term, the Company will have the option to (i) pay interest payments in cash or (ii) make
payments-in-kind by way of issuance of common shares of the Company (the "
Common Shares
") at a
price equal to the market price of the Common Shares at the time the accrued interest becomes
payable.
As security for the Debentures, the Company will grant the holders a security interest in the gold
contained in an ore stockpile located on the Company's Golden Trove property. In particular, an interest
in 0.333 ounces of contained gold for each $1,000 principal amount Debenture.
At any time during the Term, each holder of Debentures may elect to convert any portion of the principal
amount of the Debentures into Common Shares at a conversion price equal to $0.165 per Common
Share (the "
Conversion Price
").
Eric Sprott, through 2176423 Ontario Ltd., a corporation which is beneficially owned by him, and an
insider of the Corporation, acquired 750 Units for C$750,000 under the Offering. The participation of the
insiders in the Offering constitutes a "related party transaction" for the purposes of Multilateral Instrument
61-101 - Protection of Minority Security Holders in Special Transactions ("
MI 61-101
").
The Company is
exempt from the requirements to obtain a formal evaluation or minority shareholder approval in
connection with the insider participation in reliance on sections 5.5 (a) and 5.7 (1) (a) of MI 61-101, as
neither the fair market value of the securities issued, nor the fair market value of the consideration for the
securities issued exceeds 25% of the Company's market capitalization as calculated in accordance with
MI 61-101. The Company did not file a material change report containing all of the disclosure required by
MI 61-101 more than 21 days before the expected closing date of the Offering as the aforementioned
insider participation had not been confirmed at that time and the Company wished to close the Offering
as expeditiously as possible.
Finders' fees consisting of a cash commission of $64,500 and 390,909 non-transferrable finders'
warrants have been paid in connection with the second tranche of the Offering. Each finder warrant
entitles the holder to acquire one common share at $0.165 per share over a two (2) year period.
The Company intends to use the proceeds raised from the Offering for the exploration and advancement
of the Company's West Cache Gold Project in Timmins, Ontario and for general working capital
purposes.
The Debentures, Warrants and underlying Common Shares, will be subject to a hold period of four
months and one day in accordance with applicable securities laws. The Offering is subject to the final
acceptance of the TSX Venture Exchange.
This news release does not constitute an offer of securities for sale in the United States. The securities
being offered have not been, nor will they be, registered under the United States Securities Act of
1933, as amended, and such securities may not be offered or sold within the United States absent
U.S. registration or an applicable exemption from U.S. registration requirements.
About Galleon Gold
Galleon Gold is an advanced exploration and development company focused on the West Cache Gold
Project in Timmins, Ontario.
The West Cache Gold Project is located 7 km northeast of Pan American
Silver's Timmins West Mine and 14 km southwest of Newmont's Hollinger Mine.
A 2022 Preliminary
Economic Assessment (PEA) for the Project demonstrates strong economics. The Company is in the
process of planning and permitting for an 86,500-tonne underground bulk sample. Eric Sprott owns
approximately 21% of the Company's outstanding common shares.
For further information:
Galleon Gold
R. David Russell
Chairman and CEO
T. (416) 644-0066
www.galleongold.com
Investor Relations
Harbor Access
Graham Farrell
T. (416) 842-9003
Forward-Looking Statements
This news release contains certain "forward-looking statements", as defined under applicable Canadian
securities laws, that reflect the current views and/or expectations of Galleon Gold with respect to its long-
term strategy, proposed work, plans, bulk sample program and other reports including the PEA for its
projects.
Forward-looking statements are based on the then-current expectations, beliefs, assumptions,
estimates and forecasts about the business and the markets in which Galleon Gold operates.
Some of
the statements contained herein may be forward-looking statements which involve known and unknown
risks and uncertainties.
Without limitation, statements regarding potential mineralization and resources,
exploration results, expectations, plans, and objectives of Galleon Gold are forward-looking statements
that involve various risks.
The following are important factors that could cause Galleon Gold's actual
results to differ materially from those expressed or implied by such forward-looking statements: changes
in the world-wide price of mineral commodities, general market conditions and uncertainty of access to
additional capital, risks inherent in mineral exploration, delays in the receipt of government approvals,
risks associated with development, construction, mining operations and third party contractor activities,
risks related to unanticipated events related to health, safety and environmental matters. There can be no
assurance that forward-looking statements will prove to be accurate as actual results and future events
may differ materially from those anticipated in such statements.
Galleon Gold undertakes no obligation to
update such forward-looking statements if circumstances or management's estimates or opinions should
change.
The reader is cautioned not to place undue reliance on such forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
Not for distribution to United States Newswire Services or for dissemination in the United States
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/206243