(TheNewswire)
Toronto, ON – TheNewswire- February 8, 2021 – Otso Gold Corp. (“Otso” or the“Company”), (TSX.V:OTSO) is pleased toannounce that it has now closed its previously announced arm’slength financing with Brunswick Gold Ltd (“ Brunswick Gold ”)for a strategic investment of US$11 million in the Company (the“ Financing ”). Pursuant to the Financing, Brunswick Gold was issued284,944,440 units (each, a “ Unit ”), at an issuance price equal to $0.05per Unit. 25,904,020 of such Units were used to settle the principalon the US$1 million unsecured loan (the “ Loan ”) owed toBrunswick Gold.
The net proceeds from the Financing after repayment ofthe Loan will fund the Company to enable it to restart its detaileddirectional diamond drilling program to inform a robust geologicalmodel, updated technical report, detailed mine plan as well asupgrades on site to underpin the previously announced return toproduction.
Details of Financing
As previously announced, the Financing was based on aCDN$ / US$ exchange rate of $1.29520 and was approved by theCompany’s shareholders at the annual and special meeting (the“ Meeting ”) of shareholders held on January 20, 2021.
Each Unit consists of one common share in the capitalof the Company (each, a “ Common Share ”) and one Common Share purchasewarrant (each, a “ Warrant ”). Each Warrant will entitle theBrunswick Gold to purchase one Common Share at an exercise price equalto $0.05 per Warrant for a period of five years from the date ofissuance.
As described in the management information circularprepared in connection with the Meeting and as provided pursuant tothe terms of an investor rights agreement dated December 13, 2020, theCompany’s board of directors (the “ Board ”) nowconsists of seven directors – namely Brian Wesson, Clyde Wesson,Yvette Harrison and four new nominees from Bruswick Gold (namelyVladimir Lelekov, Nicolas Pascault, Victor Koshkin and Martin Smith). Additionally, Mr. Vladimir Lelekov has been appointed as Chairpersonof the Board. To facilitate the incoming Board members, Mr.Christopher Towsey resigned as a director of the Company and willremain as a consultant to Otso.
As also previously announced and as set out in themanagement information circular, on closing of the Financing, B&AWesson Pty Ltd (“ B&A ”) and C&C Wesson Pty Ltd(“ C&C ”) were issued (in aggregate) 32,380,050 “top-up”Common Shares and PFL Raahe Holdings LP (“ PFL ”) was issued31,909,280 “top-up” Common Shares. Accordingly, as a result ofthe Financing, on a non-diluted basis, Brunswick Gold now owns 46.03%of the Common Shares; PFL now owns 12.79% of the Common Shares andeach of B&A and C&C now own 6.69% of the Common Shares.
In connection with the 31,909,280 Common Shares issuedto PFL on closing, such issuance fully settles the Company’soutstanding debt to PFL in the amount of US$1,231,826.21.
All securities issued pursuant to the Financing are subject to a statutory hold period of four months andone day from the date of issuance, in accordance with applicableCanadian securities legislation.
For furtherinformation, please contact:
Clyde Wesson
Vice President
1 917 287 0716
info@otsogold.com
www.otsogold.com
Caution
The Company cautions that it has notdefined or delineated any proven or probable reserves for the OtsoMine Project and mineralization estimates may therefore requireadjustment or downward revision based upon further exploration ordevelopment work or actual production experience. Mineral resourcesthat are not mineral reserves do not have demonstrated economicviability.
The Company also cautions that thedecision by the Company to proceed to develop the Otso Mine Projectand extract mineralization proceeded without the Company firstestablishing reserves supported by a technical report and completing apre-feasibility or feasibility study. Accordingly, there is a higherrisk of technical and economic failure at Otso because developmentproceeded without first establishing reserves supported by a technicalreport and completing a feasibility study. This is particularlyrelevant as the Company has proceeded with development at Otso onindicated and inferred resources without first completing apreliminary economic report.
Forward-lookingStatements
This press release containsforward-looking statements regarding the Company based on currentexpectations andassumptions of management, which involve known andunknown risks and uncertainties associated with our business and theeconomic environment in which the business operates. All suchstatements are forward-looking statements under applicable Canadiansecurities legislation. Any statements contained herein that are notstatements of historical facts may be deemed to be forward-lookingstatements. By their nature, forward-looking statements require us tomake assumptions and are subject to inherent risks and uncertainties.We caution our readers of this press release not to place unduereliance on our forward-lookingstatements as a number of factors couldcause actual results or conditions to differ materially from currentexpectations. Please refer to the risks set forth in the Company'scontinuous disclosure documents that can be found on SEDAR( www.sedar.com ) underthe Company’s issuer profile. The Company does not intend, anddisclaims any obligation, except as required by law, to update orrevise any forward-looking statements whether as a result of newinformation, future events or otherwise.
About the Company
Otso Gold Corp. wholly owns the Otso Gold Mine near thetown of Raahe in Finland. The Otso Gold Mine is developed, fullypermitted, has all infrastructure in place, two open pits and is progressing towards production in 2021 toprocess ore at name plate capacity of 2 million tonnes perannum.
Neither the TSX Venture Exchange nor its Regulation Services Provider(as that term is defined in the policies of the TSX Venture Exchange)accepts responsibility for the adequacy or accuracy of thisrelease.
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