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VG.V ·

Volcanic proposes $5.0 million private placement

Financings

VOLCANIC GOLD MINES INC.

Suite 1600, 609 Granville Street

Vancouver, British Columbia

V7Y 1C3

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR

DISSEMINATION IN THE UNITED STATES

NEWS RELEASE

Volcanic proposes $5.0 million private placement

January 31, 2017 – Vancouver, British Columbia – Volcanic Gold Mines Inc. (the “Company”)

(TSXV: VG) announces that it proposes, subject to stock exchange approval, to complete a non-

brokered private placement financing of up to 12.5 million units at $0.40 pe r unit, for proceeds of

up to $5.0 million. Each unit will consist of one common share and one full warrant, each warrant

entitling the holder to purchase one additional common share of the Company at $0.80 for five

years from closing. The warrants will be subject to an acceleration provision such that if the closing

price of the Company’s shares for 10 consecutive trading days is $1.00 or greater, the Company

may give notice to the holders of the warrants that the warrants will expire 30 calendar days after

receipt of such notice. The Company may pay a finder’s fee on a portion of this financing.

The proceeds of the placement are intended to be used for exploration of the re cently acquired

Mandiana Project located in Guinea, for possible future property acquisitions, and for general

working capital purposes.

The securities referred to in this news release have not been, and will not be, registered under

the United States Se curities Act of 1933, as amended, and may not be offered or sold in the

United States or to, or for the account or benefit of, U.S. persons absent registration or an

applicable exemption from the registration requirement s of such Act. This news release shall

not constitute an offer to sell, nor the solicitation of an offer to buy, any securities. Any public

offering of securities in the United States must be made by means of a prospectus containing

detailed information about the company and management, as well as financial statements.

For further information, contact Jeremy Crozier at 604-801-5432.

On behalf of the Board,

Volcanic Gold Mines Inc.

Jeremy Crozier, President

-2-

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts

responsibility for the adequacy or accuracy of this release.

Forward-looking statements

Certain statements contained in this news release constitute forward- looking statements within the meaning of

Canadian securities legislation. All statements included herein, other than statements of historical fact, are forward -

looking statements and inc lude, without limitation, statements about the proposed private placement . Often, but not

always, these forward looking statements can be identified by the use of words such as “estimate”, “estimates”,

“estimated”, “potential”, “open”, “future”, “assumed” , “projected”, “used”, “detailed”, “has been”, “gain”,

“upgraded”, “offset”, “limited”, “contained”, “reflecting”, “containing”, “remaining”, “to be”, “periodically”, or

statements that events, “could” or “should” occur or be achieved and similar expressions, including negative

variations.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the

actual results, performance or achievements of the Company to be materially different from any results, pe rformance or

achievements expressed or implied by forward -looking statements. Such uncertainties and factors include, among

others, whether the private placement will be completed as planned, and whether the Company will spend the financing

proceeds as intended; changes in general economic conditions and financial markets; t he Company or any joint venture

partner not having the financial ability to meet its exploration and development goals; risks associated with the results

of exploration and development activities, estimation of mineral resources and the geology, grade and continuity of

mineral deposits; unanticipated costs and expenses; and such other risks detailed from time to time in the Company’s

quarterly and annual filings with securities regulator s and available under the Company’s profile on SEDAR at

www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions,

events or results to differ materially from those described in forward -looking statements, there may be other factors that

cause actions, events or results to differ from those anticipated, estimated or intended.

Forward-looking statements contained herein are based on the assumptions, beliefs, expectations and opinions of

management, including but not limited to: that the Company will complete the private placement as planned, and spend

the financing proceeds as intended; that the Company’s stated goals and planned exploration and development

activities will be achieved; that there will be no material adverse change affecting the Company or its properties; and

such other assumptions as set out herein. Forward-looking statements are made as of the date hereof and the Company

disclaims any obligation to update any forward- looking statements, whether as a result of new information, future

events or results or otherwise, except as requi red by law. There can be no assurance that forward- looking statements

will prove to be accurate, as actual results and future events could differ materially from those anticipated in such

statements. Accordingly, investors should not place undue reliance on forward-looking statements.