SOURCE: Integra Gold Corp.

Integra Gold Corp.

April 08, 2016 07:05 ET

Integra Gold Corp. Announces Strategic Investment in Eastmain Resources Inc.

VANCOUVER, BC--(Marketwired - April 08, 2016) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN

Integra Gold Corp. (TSX VENTURE: ICG) (OTCQX: ICGQF) ("Integra" or the "Company") announces that it has entered into a share purchase agreement (the "Agreement") with Eastmain Resources Inc. ("Eastmain") whereby Integra will make a $6 million strategic investment in Eastmain by way of a non-brokered private placement (the "Private Placement"). The Private Placement is conditional on the successful election of the revised slate of Eastmain Board nominees at Eastmain's annual general meeting ("AGM") of shareholders scheduled for April 29, 2016, agreed upon management changes, and satisfaction of customary closing conditions including receipt of all required regulatory approvals.

Integra has agreed to purchase 3.1 million flow-through common shares at $0.50 each for gross proceeds of $1,550,000 and 12.8 million units (the "Units") at $0.35 each for gross proceeds of $4,480,000. Each Unit will consist of one common share and one-half of one share purchase warrant. Each whole share purchase warrant will entitle the holder to acquire an additional common share at a price of $0.50 for a period of 30 months from closing of the Private Placements. Integra has the option of cancelling its subscription for flow-through common shares and increasing its subscription for Units to 14,950,000 Units.

As a result of the Private Placement, Integra will hold approximately 9.9% of Eastmain's issued and outstanding common shares (the "Common Shares") on an undiluted basis.

"We believe this is an excellent strategic investment opportunity for Integra and our shareholders. This investment leverages the extensive experience and regional knowledge of our technical team, including several individuals who previously worked at Goldcorp's nearby Éléonore Mine. Eastmain holds a significant portfolio of exploration properties in Québec, including its advanced stage Clearwater project located in the James Bay region. I am confident we can unlock further value for both Integra and Eastmain shareholders through this investment," stated Stephen de Jong, President and CEO of Integra Gold. "While we are excited about this transaction, we remain firmly committed to our Lamaque Project and our strategic investment in Eastmain will have no impact on our 2016 exploration and project plan."

New Slate Proposed for Eastmain Board of Directors

Integra and Eastmain have worked diligently to prepare a new slate of directors to join the three existing independent directors that currently serve on Eastmain's board of directors. The proposed board of directors to be voted on at Eastmain's April 29, 2016 AGM is as follows:

  • Stephen de Jong -- As President and Chief Executive Officer of Integra, Mr. de Jong brings extensive experience in mining finance and mine development, particularly in northern Québec.
  • George Salamis, B.Sc. Geologist -- Mr. Salamis, originating from Québec, is the Executive Chairman of Integra and brings over 25 years of experience in mineral exploration, mine development, operations and mine finance.
  • Claude Lemasson, P.Eng., MBA -- Mr. Lemasson brings extensive experience in both mining construction and operations within Québec and Canada, including being the former general manager for Goldcorp Inc. responsible for the Company's Éléonore Joint Venture project.
  • Laurence (Laurie) Curtis, Ph.D., P.Geo. -- Mr. Curtis brings a proven track record in corporate development, mine development and project financing. Mr. Curtis is Chair of the Board.
  • Michael L. Hoffman, P.Eng. -- Mr. Hoffman brings solid experience in managing emerging producers and large, complex capital projects in northern Canada and elsewhere from initial concept to construction.
  • Blair Schultz -- Mr. Schultz brings corporate director experience in mergers and acquisitions, restructuring companies, revitalizing management teams, leading transactions and maximizing shareholder value. He also has a deep understanding of the capital markets through his experience as a portfolio manager. 
  • Timo Jauristo -- Mr. Jauristo is a geologist with more than 30 years of international experience in the mining industry in gold, base metals and uranium and was formerly Executive Vice President, Corporate Development of Goldcorp Inc.

Integra's investment in Eastmain is conditional upon the new slate of directors being approved to Integra's satisfaction.

Investor Rights Agreement

Integra will also have the following rights, as set out in an investor rights agreement between Eastmain and Integra (the "Investor Rights Agreement"), which will take effect upon the closing of the Private Placement:

  • the right to appoint one director to Eastmain's Board of Directors (the "Board Nomination Right");
  • the right to participate in future equity offerings by Eastmain. In any such offering, Integra, at its own discretion, will be entitled to either maintain its percentage ownership prior to such offering or subscribe for securities to increase its holdings to up to a maximum of 15.0% of Eastmain's issued and outstanding Common Shares (the "Participation Right");
  • Integra and Eastmain will each have the right to appoint two members to a newly created Technical Committee, which will be comprised of four members whose purpose will consist of reviewing and providing recommendations in an advisory capacity in respect of exploration activities on Eastmain's Clearwater Project.

The Board Nomination Right and the Participation Right will remain in effect so long as Integra maintains ownership of 5.0% or more of Eastmain's Common Shares.

Terms of the Private Placement

The closing of the Private Placement is expected to occur in May 2016 and is subject to, among other things, the slate of directors supported by Integra being appointed at Eastmain's AGM, the appointment of Claude Lemasson as the Interim President and Chief Executive Officer of Eastmain, and all necessary regulatory approvals, including approval of the Toronto Stock Exchange. All securities issued in the Private Placement will be subject to a statutory four-month hold period.

Project and Company Profile

Integra is a junior gold exploration company advancing projects in Val-d'Or, Québec, one of the top mining jurisdictions in the world. The Company's primary focus is its high grade Lamaque South project. In 2014, Integra completed the accretive acquisition of the Sigma Mill and Mine Complex, a fully permitted 2,200 ton per day mill and tailings facility. With major federal and provincial permits in place, existing infrastructure and exploration potential, this acquisition removed major costs and shortened timelines typically associated with mine projects. With a current market capitalization of approximately $215 million, Integra has raised over $85 million since 2013 despite depressed gold prices. In February 2016, Eldorado Gold Corporation completed a strategic investment in Integra, acquiring 15% of the outstanding common shares. Integra was recently named to the TSX Venture top 50 performers in 2015 and the OTCQX Best 50 award for 2015.

About Eastmain

Eastmain is a Canadian exploration company with a 100% interest in the Eau Claire and Eastmain gold deposits, both of which are located within the James Bay District of Quebec. Eau Claire, is Eastmain's core asset, has superior infrastructure within a favourable jurisdiction and is royalty free. Eastmain also holds a pipeline of exploration projects in this new Canadian mining district. In October 2015, Eastmain was presented with the "Discovery of the Year 2015" award by the Association L'Exploration Minière du Quebec for its contributions to the development of Quebec's mining exploration industry. Eastmain's common shares trade on the Toronto Stock Exchange (TSX: ER).

ON BEHALF OF THE BOARD OF DIRECTORS,

Stephen de Jong
CEO & President

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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 this news release.

Cautionary Note Regarding Forward-Looking Statements:  Certain disclosures in this release constitute forward-looking statements, including timing of completion of the Private Placement. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that are based on the Company's current beliefs as well as assumptions made by and information currently available to the Company, including that the Company is able to obtain any government or other regulatory approvals, that the Company is able to procure personnel, equipment and supplies required for its exploration and development activities in sufficient quantities and on a timely basis and that actual results are consistent with management's expectations. Although the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect, and the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such risk factors include, among others, those matters identified in its continuous disclosure filings, including its most recently filed MD&A. Readers are cautioned not to place undue reliance on forward-looking statements. The Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

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