(TheNewswire)
Vancouver, British Columbia – TheNewswire - December 21, 2023 - Majestic Gold Corp. (“ Majestic ” or the “ Company ”) (TSXV:MJS ) ( FSE:A0BK1D) ispleased to announce the successful listing of Majestic’s 70.5% ownedsubsidiary, Persistence Resources Group Ltd. (“ Persistence ”),being the third largest gold miner (1) in ShandongProvince, China, on the Main Board of The Stock Exchange of Hong KongLimited (the "HKEX") under stock code 02489. Persistenceoffered 25% of its total issued and paid-up shares (“ Shares ”) forsubscription by public in Hong Kong and international placing underthe global offering .
The HKEX listing represents a significant milestone forPersistence’s entry into the Hong Kong capital market. Goingforward, Persistence aims to capitalize on growth opportunities in thegold mining market leveraging Hong Kong’s international capitalplatform and prestige associated with the HKEX listing. Persistence iscommitted to enhancing its technological and operational managementcapabilities, to strengthen its competitiveness in the market, andaspiring to become a benchmark for gold companies in Yantai, ShandongProvince, ultimately rewarding its shareholders and investors.
Persistence successfully conducted a global offering ofthe Shares by way of issuing 500,000,000 shares at HK$0.55 (CAD$0.0943) per share, generating gross proceeds of HK$275 million(approximately CAD$47.2 million). After deducting the underwritingfees and other estimated expenses related to the global offering, netproceeds are approximately HK$217 million (approximately CAD$37.2million).
The allocation of net proceeds by Persistence will beas follows: 55.0% will be allocated to acquisition of gold miningassets, 20.4% towards its mine optimization plan; and 12.6%, 10.0%,and 2.0% for the repayment of existing bank loan guarantees, workingcapital, and additional exploration activities to upgrade goldreserves, respectively.
Selective acquisition of gold mining assets to increase marketshare
Persistence will direct55.0% of net proceeds towards the selectiveacquisition of surrounding high-quality gold mining assetswhereby expanding its mineral resources andmarket share. The criteria for acquisition targets include mineslocated in Shandong Province with potential gold resources of at least10 tonnes at a depth of less than 1,000 meters, a life of mine(“ LoM ”) of more than five years and a payback period of lessthan 10 years.
Persistence willdedicate 20.4% of net proceeds to implementing the mine optimizationplan, involving the expansion the mining surface area around 150meters south of the existing boundary of Songjiagou Open-Pit Mine soas to increase the pit opening area to 0.46 square meters and todeepen the depth of the pit to –171 meters above sea level.
Working capital, and bank loan repayment
Approximately 12.6% ofnet proceeds will be utilized to repay existing bank loans andapproximately 10% will be allocated for working capital purposes.
Additional exploration at existing mine area to increase goldreserves
2.0% will be allocatedfor additional exploration activities at the Songjiagou Open-Pit Minearea. Persistence aims to identify additional mineral resources in theunmined areas adjacent to and below the currentpit opening area covered by the Songjiagou Open-Pit Mine mininglicense. Exploration plans include 26 drilling surveys in three phasesat various depths for a total of over 6,500 meters, to identifyadditional gold mineral resources.
As previously announced, Persistence issued itsProspectus in respect of its listing of shares on the HKEX on December14, 2023. Through its subsidiary, Persistence owns a 75% indirectinterest in Yantai Zhongjia Mining Co. Ltd., which operates theSongjiagou Gold Mine (the " Property ") located in the eastern part ofthe Shandong Province, China. Majestic owned 94% of Persistenceprior to the issuance of the Shares, Majestic now owns approximately70.5% of the total issued and paid-up shares of Persistence, pursuantto and at time listing of the Shares on the HKEX, Persistence could issue additional shares, which may furtherdilute Majestic's cumulative effective interest in the Property toless than 50%. However, considering the greater valuation and improvedaccess to capital the HKEX listing may afford Persistence for itsfuture needs, the Board of Directors of Majestic, with the advice fromits legal and financial advisors, unanimously approved thelisting.
Majestic confirms that all necessary approvals,including those from the TSX.V and HKEX have been obtained for thesuccessful closing of the listing.
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.
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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