Majestic Announces Change IN Use of the Net Proceeds from Global Offering
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MAJESTIC ANNOUNCES CHANGE IN USE OF THE NET PROCEEDS FROM
GLOBAL OFFERING
Vancouver, British Columbia – August 2 3, 2024 - Majestic Gold Corp. (TSX.V: MJS, FSE:
A0BK1D) (“Majestic”, together with its subsidiaries, the “ Company”) announces with r eference
made to (i) the prospectus of Persistence Resources Group Ltd (the “ Persistence ”) dated December
14, 2023 in relation to the Global Offering (the “Prospectus ”); (ii) the news release dated March
25, 2024 in relation to an LOI to acquire gold project through use of the net proceeds from Global
Offering (the “Net Proceeds ”); and (iii) the 2023 annual report of the Company dated March 28,
2024 (the “Annual Report ”).
The Company hereby announces that after careful consideration and detailed evaluation of the
Company’s operations and business strategy, it has resolved to change the use of the unutilised
portion of the Net Proceeds in the manner as set out below.
CHANGE IN USE OF UNUTILISED NET PROCEEDS FROM GLOBAL OFFERING
The original intended purposes and uses of the Net Proceeds, which amounted to
approximately HK$218.3 million, were disclosed in the section headed “Future Plans and Use of
Proceeds – Use of Proceeds” in the Prospectus, and further updated in the section headed
“Management Discussion and Analysis – Use of Proceeds from Global Offering” in the Annual
Report.
306 - 1688 152nd Street
Surrey, British Columbia
Canada, V4A 4N2
Telephone: 604-560-9060
Facsimile: 604-560-9062
Email: [email protected]
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As at June 30, 2024, the Company has utilised approximately HK$24.9 million of the Net Proceeds and
the unutilised portion of the Net Proceeds amounted to approximately HK$193.4 million (the
“Unutilised Net Proceeds”). The original and revised allocation of the Net Proceeds is as follows:
Net Proceeds and utilisation
Business objective as stated
% of the
Actual amount
available
Utilised
amount as of
Unutilised
Net Proceeds as
Revised
Expected
timeline for
in the Prospectus Net Proceeds for utilisation June 30, 2024 of June 30, 2024 allocation utilisation
HK$ million HK$ million HK$ million HK$ million
Further construction of 20.4% 44.5 15.3 29.2 29.2 By June 2025
mining infrastructure in
accordance with the mine
optimisation plan of the
Group
pgrade gold reserves to increase
LoM through additional
exploration activities at the
existing mine area of
Songjiagou Project
2.0% 4.4 0 4.4 4.4 By December 2024
xpand the business of
Persistence through selective
55.0% 120.1 0 120.1 147.6 By February 2025
acquisitions of gold mining
assets
payment of existing bank loans
guarantees
12.6% 27.5 0 27.5 eallocated to
acquisitions
N/A
Working Capital 10.0% 21.8
9.6
12.2
12.2 By December 2025
Total
100.0%
218.30
24.9
193.4
193.4
Note: The portion initially allocated for repayment of existing bank loans guarantees is reallocated to the expansion of
the business of Persistence through selective acquisitions of gold mining assets. Other than that, Company has no
other changes to the use of the Unutilised Net Proceeds.
On the basis of the change in use of Unutilised Net Proceeds as set out in the table above, the Company
currently expects to fully utilise the Unutilised Net Proceeds by December 31, 2025. The expected
timeline for utilising the Unutilised Net Proceeds is based on the best estimation of the commercial market
situations made by the Company and may be subject to changes based on the market conditions.
REASONS FOR THE CHANGE IN USE OF PROCEEDS
As originally disclosed in the section headed “Future Plans and Use of Proceeds – Use of Proceeds” in the
Prospectus, approximately 12.6% of the Net Proceeds was allocated to repay certain borrowings of the
Company from Huaxia Bank Co., Ltd. Yantai Branch (the “Original Repayment Plan”).
However, pursuant to the recent regulatory updates from the State Administration of Foreign Exchange
of the PRC or its local branch (the “SAFE ”), the whole application process of the Original Repayment
Plan has been significantly extended. As such, the Company has resolved to (i) use internal source of fund
(denominated in RMB) of the Company for the repayment of existing bank loans, in order to comply with
the repayment schedule of such existing bank loans; and (ii) reallocate the whole portion of the Unutilised
Net Proceeds which is originally intended for loan repayment to the expansion of the business of the
Company through selective acquisitions of gold mining assets, resulting an increase of such portion
from approximately HK$120.1 million to approximately HK$147.6 million.
The Company confirms that there are no material changes in the nature of the business of the Company
as set out in the Prospectus. The Company believes that the above change in the use of the Unutilised
Net Proceeds will not have any material adverse impact on the operations of the Company, and such
change will allow the Company to deploy its financial resources more efficiently and enhance the
business performance in the long run. The Company has no other changes to the plan for utilising the
remaining net proceeds from Global Offering other than as disclosed in this announcement .
About Majestic Gold
Currently focused in China, Majestic Gold Corp. is a British Columbia based company engaged in commercial
gold production at the Songjiagou Gold Mine in eastern Shandong Province, China. Additional information on
the Company and its projects is available at www.sedarplus.ca and on the Company’s website at
www.majesticgold.com.
For further information, please contact:
James Mackie, CFO and Corporate Secretary
Telephone: (604) 560-9060
Email: [email protected]
Website: www.majesticgold.com
Cautionary Notes
Certain statements contained herein may constitute forward‐looking statements and are made pursuant to the "safe
harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities laws.
Forward‐looking statemen ts are statements which relate to future events. Such statements include estimates,
forecasts, and statements as to management's expectations with respect to, among other things, business and
financial prospects, financial multiples and accretion estimates , future trends, plans, strategies, objectives, and
expectations, including with respect to production, exploration drilling, reserves and resources, exploitation activities
and events or future operations. Information inferred from the interpretation of drilling results and information
concerning mineral resource estimates may also be deemed to be forward ‐looking statements, as it constitutes a
prediction of what might be found to be present when, and if, a project is actually developed.
In some cases, you can identify forward‐looking statements by terminology such as "may", "should", "expects", "plans,
"anticipates", believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties
and other factors that may cause our or our industry's actual results, level of activity, performance, or achievements
to be materially different from any future r esults, levels of activity, performance, or achievements expressed or
implied by these forward‐looking statements.
While these forward‐looking statements, and any assumptions upon which they are based, are made in good faith,
and reflect our current judgment regarding the direction of our business, actual results will almost always vary,
sometimes materially, from any estimates, predictions, projections, assumptions, or other future performance
suggestions herein. Except as required by applicable law, Majestic Gold does not intend to update any forward‐
looking statements to conform these statements to actual results