Northern Gold Mining Inc.
TSX VENTURE : NGM

Northern Gold Mining Inc.

October 14, 2014 07:30 ET

Northern Gold Announces Closing of $5,000,000 Secured Debt Facility

TORONTO, ONTARIO--(Marketwired - Oct. 14, 2014) - NORTHERN GOLD MINING INC. (TSX VENTURE:NGM) ("Northern Gold" or the "Company") is pleased to announce that the Company has entered into a senior secured credit agreement (the "Agreement") with a qualified arm's length investor (the "Lender") in relation to a $5,000,000 principal amount senior secured debt facility (the "Facility"). The Facility was drawn down in one advance of $5,000,000 on the date hereof (the "Effective Date").

Eric Moeller, President and Chief Executive Officer of the Company, said, "We will use the proceeds from this Facility to develop our Golden Bear Project and for general working capital purposes. This Facility will enable us to advance our operations without any immediate dilution to our shareholders."

The key terms of the Facility are as follows:

  • the Facility has a one-year term commencing on the Effective Date and bears interest at a rate of 10% per annum, payable quarterly;
  • the Facility is secured by a security interest granted over all of the assets of the Company, including, without limitation, the Company's Golden Bear Project located east of Timmins, Ontario; and
  • the Lender is granted certain participation rights and rights of first refusal in respect of any future financing that may be undertaken by the Company during the three years following the Effective Date.

Upon entering into the Agreement, Northern Gold paid the Lender a cash structuring fee in the amount of $100,000 (equivalent to 2.0% of the principal amount of the Facility), and also issued to the Lender an aggregate of 24,000,000 common share purchase warrants (the "Warrants"), with each Warrant entitling the Lender to acquire one common share in the capital of the Company at a price of $0.08. Of the 24,000,000 Warrants, 19,000,000 have a term of three years from the Effective Date and 5,000,000 have a term of one year from the Effective Date. All Warrants will be subject to a statutory hold period lasting four months from the Effective Date. In addition, the Company will reimburse the Lender for certain costs incurred in connection with the Agreement and the Facility.

The Facility remains subject to the final approval of the TSX Venture Exchange (the "TSXV"). In connection with the Facility, Northern Gold paid a $50,000 cash fee to an arm's length entity providing financial advisory and consulting services to the Company.

About Northern Gold

Northern Gold is a TSXV-listed gold company based in Toronto, Ontario. The Company's main focus is the exploration and development of its prospective mineral properties at the Golden Bear Project in the Larder Lake Mining Division in northeastern Ontario. Northern Gold has a portfolio of advanced exploration projects, including the Jonpol and Garrcon Deposits and the Buffonta Property. Recent transactions, including the amalgamation with Victory Gold Mines Inc. and acquisition of the Lac Minerals Property, add to the Company's regional consolidation strategy along the Destor-Porcupine Fault Zone.

For further information on Northern Gold, please visit Northern Gold's website at www.northerngold.ca.

CAUTIONARY STATEMENT: Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release. No stock exchange, securities commission or other regulatory authority has approved or disapproved of the information contained herein. This news release contains forward-looking information which is not comprised of historical facts. Forward-looking information is characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur, and includes information with respect to, among other things, the uses of proceeds from the Facility, the Company's present and future financial condition, and the ability of the Company to secure additional sources of financing. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, changes in the state of equity and debt markets, fluctuations in commodity prices, delays in obtaining or failures to obtain TSXV or other required regulatory or governmental approvals, and other risks involved in the mineral exploration and development industry, including those risks set out in Northern Gold's management's discussion and analysis for the three month period and year ended March 31, 2014 as filed under the Company's SEDAR profile at www.sedar.com. Forward-looking information in this news release is based on the opinions and assumptions of management considered reasonable as of the date hereof, including, among other things, that financing will continue to be available to the Company on favourable terms or at all, the results of the Company's exploration and development activities will be favourable, and all necessary governmental and regulatory approvals, including TSXV approval, will be received as and when expected. Although Northern Gold believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Northern Gold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable securities laws.

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