VLMZF - Volcanic Closes $8.6 Million Financing Silvercorp Elects to Maintain 19.9% Pro-Rata Interest
(TheNewswire)
Vancouver, Canada - TheNewswire - October 20, 2020 - Volcanic Gold Mines Inc. (TSXV:VG),("Volcanic" or the "Company") is pleased to announce that it has closed its previouslyannounced over-subscribed bought deal financing (the" Offering "), and a concurrent private placement (the" Concurrent PrivatePlacement ") with its largest shareholder,Silvercorp Metals Inc. (" Silvercorp "), for aggregate grossproceeds of approximately $8.6 million (the " Financing ").
Pursuant to the Offering, Volcanic issued 12,546,500units of the Company (the " Units "), including 1,636,500 Units issuedin connection with the exercise in full of the over-allotment optiongranted to the Underwriters (as defined below) in connection with theOffering, at a price of C$0.55 per Unit (the " Issue Price ")for aggregate gross proceeds of C$6,900,575. The Offering wascompleted through a syndicate of underwriters led by HaywoodSecurities Inc., and including Canaccord Genuity Corp. (collectively,the " Underwriters ").
Pursuant to the Concurrent Private Placement, Volcanicissued 3,117,100 Units to Silvercorp at the Issue Price for aggregategross proceeds of C$1,714,405. Silvercorp, which held approximately19.9% of the issued and outstanding shares of Volcanic prior to theOffering, exercised its participation right to maintain its 19.9%interest upon closing of the Financing. The securities issued toSilvercorp are subject to a four month holdperiod which will run until February 21,2021.
Each Unit consists of one common share in the capitalof the Company (a " CommonShare ") and one-half of one Common Sharepurchase warrant (a " Warrant "). Each whole Warrant entitlesthe holder thereof to purchase one Common Share at a price of C$0.70until April 20, 2022.
In connection with the Offering, the Underwritersreceived a cash commission of 6.0% of the gross proceeds of theOffering, subject to a reduced cash commission paid on sales tomembers of the president's list (the " Presidents List Sales ") and were issued compensation options (the" CompensationOptions ") exercisable at any time prior toOctober 20, 2022 at a price of C$0.55 per Compensation Option topurchase such number of units (the " Compensation Units ") as is equal to 6% (reduced in the case of President'sList Sales) of the aggregate number of Units issued pursuant to theOffering. Each Compensation Unit is comprised of one Common Share andone-half of one Common Share purchase warrant (a " Compensation Warrant "). Each whole Compensation Warrant entitles the holderthereof to purchase one Common Share at a price of C$0.70 untilOctober 20, 2022.
In connection with the Concurrent Private Placement anda portion of the Offering, the Company will pay a finder's fee to RothCapital Partners LP of C$133,098.35 cash and 241,997 finder's warrantswith the same terms as the Warrants and subject to a four month holdperiod which will run until February 21, 2021.
The Company intends to use the net proceeds from theFinancing for the exploration and advancement of the Company'sprincipal assets in Guatemala and for general corporate purposes.
Because Silvercorp is a "related party" tothe Company, the Concurrent Private Placement constitutes a"related party transaction" within the meaning of TSXVenture Exchange Policy 5.9 and Multilateral Instrument 61 101Protection of Minority Security Holders in Special Transactions(" MI 61 101 "). The Company has relied on exemptions from the formalvaluation and minority shareholder approval requirements of MI 61 101contained in sections 5.5(b) and 5.7(1)(b) of MI 61 101.
The securities offered pursuant to the Offering havenot been, and will not be, registered under the U.S. Securities Act of1933, as amended (the " U.S. Securities Act ") or any U.S. statesecurities laws, and may not be offered or sold in the United Statesor to, or for the account or benefit of, United States persons absentregistration or any applicable exemption from the registrationrequirements of the U.S. Securities Act and applicable U.S. state securities laws. This news releaseshall not constitute an offer to sell or the solicitation of an offerto buy securities in the United States, nor shall there be any sale ofthese securities in any jurisdiction in which such offer, solicitationor sale would be unlawful.
Volcanic brings together an experienced and successfulmining, exploration and capital markets team focused on buildingmulti-million ounce gold and silver resources in underexploredcountries. Through the strategic acquisition of mineral propertieswith demonstrated potential for hosting gold and silver resources, andby undertaking effective exploration and drill programs, Volcanicintends to become a leading gold-silver company. For furtherinformation, visit our website at www.volgold.com .
Volcanic Gold MinesInc.
Charles Straw, Director/CEO
Neither the TSX-V nor the InvestmentIndustry Regulatory Organization of Canada accepts responsibility forthe adequacy or accuracy of this release.
Cautionary Note Regarding Forward Looking Statements
Certain statements contained in thisnews release constitute forward-looking statements within the meaningof Canadian securities legislation. All statements included herein,other than statements of historical fact, are forward-lookingstatements and include, without limitation, statements about theCompany's current expectations on future exploration plans, and theexpected use of proceeds of the Financing. Often, but not always,these forward looking statements can be identified by the use of wordssuch 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 involveknown and unknown risks, uncertainties and other factors which maycause the actual results, performance or achievements of the Companyto be materially different from any results, performance orachievements expressed or implied by forward-looking statements. Suchuncertainties and factors include, among others, whether explorationon the Company's principal assets in Guatemala will proceed asplanned; changes in general economic conditions and financial markets;the Company or any joint venture partner not having the financialability to meet its exploration and development goals; risksassociated with the results of exploration and development activities,estimation of mineral resources and the geology, grade and continuityof mineral deposits; unanticipated costs and expenses; risksassociated with COVID-19 including adverse impacts on the worldeconomy, exploration efforts and the availability of personnel; andsuch other risks detailed from time to time in the Company's quarterlyand annual filings with securities regulators and available under theCompany's profile on SEDAR at www.sedar.com. Although the Company hasattempted to identify important factors that could cause actualactions, events or results to differ materially from those describedin forward-looking statements, there may be other factors that causeactions, events or results to differ from those anticipated, estimatedor intended.
Forward-looking statements containedherein are based on the assumptions, beliefs, expectations andopinions of management, including but not limited to: that theCompany's stated goals and planned exploration and developmentactivities will be achieved; that there will be no material adversechange affecting the Company or its properties; and such otherassumptions as set out herein. Forward-looking statements are made asof the date hereof and the Company disclaims any obligation to updateany forward-looking statements, whether as a result of newinformation, future events or results or otherwise, except as requiredby law. There can be no assurance that forward-looking statements willprove to be accurate, as actual results and future events could differmaterially from those anticipated in such statements. Accordingly,investors should not place undue reliance on forward-lookingstatements.
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