Scorpio Gold Announces Increase in Private Placement and Restructure of Outstanding Loans
Scorpio Gold Announces Increase in Private
Placement and Restructure of Outstanding
Loans
Vancouver, British Columbia--(Newsfile Corp. - January 30, 2024) -
Scorpio Gold Corporation
(TSXV:
SGN) ("
Scorpio Gold
" or the "
Company
") is pleased to announce that due to investor interest, it has
increased the size of its non-brokered private placement described in the press release dated January
12, 2024 ("
Private Placement
") by an additional $1,000,000, for the issuance of an aggregate of up to
33,333,333 units of the Company at a price of $0.15 per unit for gross proceeds to the Company of up to
$5,000,000. Each unit is comprised of one common share of the Company and one common share
purchase warrant, with each warrant exercisable to acquire one common share of the Company at an
exercise price of $0.20 for a period of two years from the date of issuance. To date, the Company has
closed two tranches of the Private Placement, issuing an aggregate of 9,584,966 units for aggregate
gross proceeds of $1,437,745. The Private Placement remains subject to the final approval of the TSX
Venture Exchange (the "
Exchange
").
The Company and Altus Gold Corp. have agreed to extend the outside date for the completion of the
Company's acquisition of all the issued and outstanding shares of Altus Gold Corp. by way of a three-
cornered amalgamation (the "
Transaction
") to February 14, 2024. For further information on the
Transaction, see the Company's press release dated January 18, 2024.
Restructure and Extension of Outstanding Loans
The Company also announces that, subject to the approval of the Exchange, the Company intends to
restructure its outstanding loans owing to the Ianco Holdings Ltd. and Matco Holdings Ltd. (collectively,
the "
Lenders
") in the aggregate principal amount of $3,100,000 together with accrued interest
(collectively, the "
Debt
") by: (i) settling $750,000 of the principal amount of the Debt through the issuance
of 5,000,000 common shares in the capital of the Company (the "
Common Shares
") at a deemed
issue price of $0.15 per Common Share to the Lenders, and (ii) restructuring the remaining Debt (the
"
Loans
") into two amended and restated convertible loan agreements (the "
Amended and Restated
Loan Agreements
") to be entered into between the Company and each Lender.
Under the terms of the Loans, up to $1,000,000 of the outstanding principal amount of the Loans will be
convertible, at the election of the applicable Lender, from July 1, 2024 until the maturity date into
Common Shares at a conversion price of $0.40 per Common Share, subject to adjustment in certain
circumstances. The maturity date of the Loans will be two years from the date of the Amended and
Restated Loan Agreements. The Loans will bear interest at a rate of 10% per annum. If the Company
raises gross proceeds of more than $20,000,000 in one or more financings prior to the maturity date of
the Loans, the Company will pay all remaining debt under the Loans in cash at the option of the
applicable Lender.
Similar to the outstanding Debt, the Loans will be secured in favour of the Lenders on a pari passu basis
by the present and after-acquired personal property of the Company and each of the following
subsidiaries of the Company: Scorpio Gold (US) Corporation, Mineral Ridge Gold, LLC, Goldwedge,
LLC and Pinon LLC (collectively, the "
Subsidiaries
"), as well as a pledge over each of the outstanding
shares and membership interests of the Subsidiaries, and guarantees provided by each of the
Subsidiaries.
The Debt restructure is a condition precedent to the completion of the Transaction. The Common Shares
issuable in settlement of a portion of the Debt will be subject to a hold period expiring four months from
the date of issuance, in accordance with applicable securities laws and the policies of the Exchange.
The Loans and the Common Shares issuable on conversion of the principal amount of the Loans will be
subject to a hold period expiring four months from the date of the Amended and Restated Loan
Agreements, in accordance with applicable securities laws and the policies of the Exchange.
Related Party Transaction Disclosure
Ianco Holdings Ltd. is a related party of the Company by virtue of the fact that it is a company wholly-
owned by Ian Dawson, a director of the Company, and as a result, the issuance of 2,500,000 Common
Shares to Ianco Holdings Ltd. and the restructure of the remaining Debt owing to Ianco Holdings Ltd. into
an Amended and Restated Loan Agreement constitutes a "related party transaction" (the "
Related
Party Transaction
") for the purposes of Multilateral Instrument 61-101
Protection of Minority Security
Holders in Special Transactions
("
MI 61-101
").
The Company anticipates that there will be a material change in the percentage of the outstanding
securities of the Company that are owned by Ian Dawson as a result of the Related Party Transaction.
Currently, Ian Dawson beneficially owns, or exercises control or direction over 2,493,310 Common
Shares, representing approximately 7.55% of the issued and outstanding Common Shares on a non-
diluted basis (or approximately 7.98% of the issued and outstanding Common Shares on a partially-
diluted basis including all convertible securities of the Company owned or controlled by Ian Dawson).
Upon the completion of the Debt restructure, it is anticipated that Ian Dawson will beneficially own, or
exercise control or direction over 4,993,310 Common Shares, representing approximately 13.13% of
the issued and outstanding Common Shares on a non-diluted basis (or approximately 16.22% of the
issued and outstanding Common Shares on a partially-diluted basis including all convertible securities of
the Company owned or controlled by Ian Dawson).
The Company is relying upon exemptions from the formal valuation and minority shareholder approval
requirements under MI 61-101 in respect of the Related Party Transaction, in reliance on Sections 5.5(b)
and 5.7(1)(b) of MI 61-101, respectively, as no securities of the Company are listed on a specified
market under MI 61-101 and the fair market value of the Related Party Transaction does not exceed
$2,500,000 as determined in accordance with MI 61-101. Neither the Company, nor, to the knowledge of
the Company after reasonable inquiry, Ian Dawson has knowledge of any material information
concerning the Company or its securities that has not been generally disclosed.
The securities described herein have not been, and will not be, registered under the United States
Securities Act of 1933, as amended (the "
1933 Act
") or any state securities laws, and accordingly, may
not be offered or sold within the United States except in compliance with the registration requirements of
the 1933 Act and applicable state securities requirements or pursuant to exemptions therefrom. This
press release does not constitute an offer to sell or a solicitation to buy any securities in any jurisdiction.
ON BEHALF OF THE BOARD OF SCORPIO GOLD CORPORATION
Chris Zerga, CEO and President
Tel: (819) 825-7618
Email:
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of
the Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
The Company relies on litigation protection for forward-looking statements. This news release
contains forward-looking statements that are based on the Company's current expectations and
estimates. Forward-looking statements are frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or
statements that certain events or conditions "may" or "will" occur, and include, without limitation,
statements regarding the terms and completion of the Private Placement and Debt restructure, and
satisfying closing conditions for the Transaction. There is significant risk that the forward-looking
statements will not prove to be accurate, that the management's assumptions may not be correct and
that actual results may differ materially from such forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that could cause actual
events or results to differ materially from estimated or anticipated events or results implied or
expressed in such forward-looking statements, including the inability to complete the Transaction, the
Private Placement, the Debt restructure and related transactions, receipt of all regulatory approvals
required for the Transaction, the Private Placement, the Debt restructure and related transactions, and
those risk factors outlined in the Company's Management Discussion and Analysis as filed on
SEDAR+. Any forward-looking statement speaks only as of the date on which it is made and, except
as may be required by applicable securities laws, the Company disclaims any intent or obligation to
update any forward-looking statement, whether as a result of new information, future events or results
or otherwise. Forward-looking statements are not guarantees of future performance and accordingly
undue reliance should not be put on such statements due to the inherent uncertainty thereof.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/196204