(TheNewswire)
Vancouver, British Columbia -December 14, 2023 - Majestic Gold Corp. (“ Majestic ” or the “ Company ”) (TSXV:MJS ) ( FSE:A0BK1D) ispleased to announce that Majestic’s 94% owned subsidiary,Persistence Resources Group Ltd. (“Persistence”), has issued itsprospectus in respect of its listing of shares in the capital ofPersistence (the "Shares") on the Main Board of The StockExchange of Hong Kong Limited (the "HKEX") and the initialpublic offering (the "IPO") of newly issued Shares ofPersistence representing 25% of its total issued and paid-up Sharesupon successful listing of the Shares.
As previously announced, Persistence filed its listingapplication with the HKEX on March 30,2022. Through its subsidiary,Persistence owns a 75% indirect interest in Yantai Zhongjia Mining Co.Ltd., which operates the Songjiagou Gold Mine (the"Property") located in the eastern part of the ShandongProvince, China. While Majestic will continue to own approximately70.5% of total issued and paid-up Shares of Persistence uponsuccessful listing of the Shares, which could materially diluteMajestic’s ownership in the Property. Subsequent to the successfullisting of the Shares on the HKEX, Persistence could issue additionalShares, which may further dilute Majestic's cumulative effectiveinterest in the Property to less than 50%. The Board of Directors ofMajestic, with the advice from its legal and financial advisors, haveconsidered the potential dilutive effects and determined that alisting on the HKEX by Persistence may achieve a greater valuation forPersistence, which would help to better access capital for its futureneeds. Accordingly, the Board of Directors of Majestic unanimouslyapproved the IPO.
Persistence plans tooffer a total of 500,000,000 Shares (subject to the over-allotmentoption), of which 450,000,000 are international offer shares (subjectto reallocation and the over-allotment option) and 50,000,000 are HongKong offer shares (subject to reallocation). The indicative offerprice per offer share ranges from HK$0.55 to HK$0.75 (subject todownward offer price adjustment of up to 10% below the bottom end ofthe indicative offer price range). After deducting the underwritingfees and other estimated expenses relating to the global offering, andassuming that the over-allotment option is not exercised and the offerprice is set at HK$0.65 per share (being the mid-point of theindicative offer price range), the aggregate net proceeds from theglobal offering are estimated to be approximately HK$265million.
The Hong Kong publicoffering will commence at 9:00 a.m. HKT on 14 December 2023 and end at12 p.m HKT on 19 December 2023. The final offer price and allotmentresults will be announced on 21 December 2023. Trading in the Sharesof Persistence is expected to commence on the Main Board of the HKEXon 22 December 2023 under the stock code 02489. The Shares will betraded in board lots of 5,000 Shares each.
Innovax Capital Limitedis the Sole Sponsor and Innovax Securities Limited is the OverallCoordinator, Sole Global Coordinator, Joint Bookrunner and Joint LeadManager of the global offering.
Based on the offer priceof HK$0.65 per offer share (being the mid-point of the indicativeoffer price range of HK$0.55 to HK$0.75), Persistence estimates thatthe net proceeds from the global offering (after deducting theunderwriting fees and other estimated expenses relating to the globaloffering) will be approximately HK$265 million before theover-allotment option is exercised, which will be utilised asfollows:
Use of Proceeds | Percentage |
| 55.0% |
| 20.4 % |
| 12.6% |
| 10.0% |
| 2.0% |
Selective acquisition of gold mining assets to increase marketshare
Persistence plans toexpand its mineral resources and increase its market share throughacquisition of surrounding high-quality gold mining assets. Thecriteria for acquisition targets include mines located in ShandongProvince with potential gold resources of at least 10 tonnes at adepth of less than 1,000 meters, a life of mine (“LoM”) of morethan five years and a payback period of less than 10 years.
Persistence is activelyimplementing the mine optimization plan, which includes expanding themining surface area around 150 meters south of the existing boundaryof Songjiagou Open-Pit Mine so as to increase the pit opening areafrom 0.34 square kilometers to 0.46 square meters and to deepen thedepth of the pit to –171 meters above sea level. For this purpose,Persistence will construct new benches and plans to construct a waterstorage pool and drainage system to dewater groundwater, set upsubstations and topsoil storage yards, and acquire three excavatorsfor the new mining area.
Additional exploration at existing mine area to increase goldreserves
According to the 2023SRK Technical Report, the Songjiagou Open-Pit Mine area has potentialfor exploration and upgrading of its mineral resource. Persistenceplans to identify additional mineral resources in the unmined areasadjacent to and below the current pit opening area covered by themining license of its Songjiagou Open-Pit Mine by conducting furtherexploration work, which includes 26 drilling surveys in three phasesat various depths ranging from 0 to 550 meters with a total depth ofover 6,500 meters, so as to increase its gold mineral resources and toincrease the LoM of its Songjiagou Open-Pit Mine.
Fullyelectronic application process
Persistence has adopteda fully electronic application process for the Hong Kong publicoffering. No printed copies of the prospectus or any application formswill be made available. The prospectus has been published on the StockExchange website at www.hkexnews.hk under “HKEXnews (New Listings) New Listing Information”and Majestic’s website www.majesticgold.com and Persistence’s website www.persistenceresource.com .
The closing of the proposed listing is subject toobtaining all required approvals, including the TSX.V and HKEX and anyother regulatory approvals required.
About Majestic Gold
Currently focused inChina, Majestic Gold Corp. is a British Columbia based company engagedin commercial gold production at the Songjiagou Gold Mine in easternShandong Province, China. Majestic is the thirdlargest gold producing mining company (1) in ShandongProvince. Additional information on the Companyand its projects is available at www.sedarplus.ca and on theCompany’s website at www.majesticgold.com .
(1) Source: Frost & Sullivan Report, basedon mine production volume in 2022
For further information, pleasecontact:
James Mackie, CFO and Corporate Secretary
Telephone: (604) 560-9060
Email: info@majesticgold.com
Website: www.majesticgold.com
Majestic invites the public to visit its website at www.majesticgold.com or e-mail thecompany at info@majesticgold.com to be added to the company's e-mail list for press releasesand updates.
Neither the TSX Venture Exchange nor its RegulationServices Provider (as that term is defined in policies of the TSXVenture Exchange) accepts responsibility for the adequacy or accuracyof this release.
Cautionary Notes
Certain statements contained hereinmay constitute forward?looking statements and are made pursuant tothe "safe harbor" provisions of the United States PrivateSecurities Litigation Reform Act of 1995 and Canadian securities laws.Forward?looking statements are statements which relate to futureevents. Such statements include estimates, forecasts, and statementsas to management's expectations with respect to, among other things,business and financial prospects, financial multiples and accretionestimates, future trends, plans, strategies, objectives, andexpectations, including with respect to production, explorationdrilling, reserves and resources, exploitation activities and eventsor future operations. Information inferred from the interpretation ofdrilling results and information concerning mineral resource estimatesmay also be deemed to be forward-looking statements, as it constitutesa prediction of what might be found to be present when, and if, aproject is actually developed.
In some cases, you can identifyforward?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. Thesestatements are only predictions and involve known and unknown risks,uncertainties and other factors that may cause our or our industry'sactual results, level of activity, performance, or achievements to bematerially different from any future results, levels of activity,performance, or achievements expressed or implied by theseforward?looking statements.
While these forward?lookingstatements, and any assumptions upon which they are based, are made ingood faith, and reflect our current judgment regarding the directionof our business, actual results will almost always vary, sometimesmaterially, from any estimates, predictions, projections, assumptions,or other future performance suggestions herein. Except as required byapplicable law, Majestic does not intend to update anyforward?looking statements to conform these statements to actualresults .
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