VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 28, 2014) -
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
True Gold Mining Inc. ("True Gold" or the "Company") (TSX VENTURE:TGM) is pleased to announce that it has entered into an agreement with RBC Capital Markets and a syndicate of underwriters, pursuant to which they have agreed to purchase, on a bought deal basis by way of a short form prospectus, 91,400,000 units (the "Units") of True Gold, each unit consisting of one common share and one-half of one common share purchase warrant, at a price of C$0.40 per Unit (the "Issue Price") for aggregate gross proceeds to True Gold of approximately C$36.6 million (the "Bought Deal Financing"). Each whole common share purchase warrant will entitle the holder to purchase one common share of the Company at a price of C$0.47 prior to the date which is six months following the closing of the Bought Deal Financing. In addition, True Gold has granted the underwriters an option, exercisable at any time, in whole or in part, until the date that is 30 days following the closing of the Bought Deal Financing, to purchase up to an additional 15% of the number of Units solely to cover over-allotments, if any, and for market stabilization purposes. The Underwriters can elect to exercise the option for Units, common shares only, or warrants only, or any combination thereof. In the event that the option is exercised in its entirety, the aggregate gross proceeds of the Bought Deal Financing to True Gold will be approximately C$42.0 million.
In addition, True Gold is pleased to announce that Liberty Metals & Mining Holdings, LLC ("LMM"), a subsidiary of Liberty Mutual Insurance and the Company's largest shareholder has elected to exercise their participation rights and has agreed to purchase 21,181,218 Units (24,358,400 Units in the event the Over-Allotment Option is exercised in full) at the Issue Price in order to maintain its pro rata interest in the Company (the "Non-Brokered Financing"). Closing of the Non-Brokered Financing is expected to occur concurrently with the closing of the Bought Deal Financing and is conditional upon closing of the Bought Deal Financing. LMM has agreed not to exercise any Warrant if, after giving effect to such exercise, it and its affiliates, will own in excess of 19.9% of the outstanding common shares, unless the Company, at the request of LMM, has obtained any required shareholder and regulatory approvals prior to such exercise.
Aggregate gross proceeds from the Bought Deal Financing and the Non-Brokered Financing (collectively the "Offering") will total approximately C$45.0 million, prior to the exercise of the over-allotment option.
The net proceeds of the Offering will be used to allow the Company to proceed with its proposed development and construction activities at the Karma Gold Project in Burkina Faso and for working capital purposes.
The Offering is scheduled to close on or about February 18, 2014 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange and the securities regulatory authorities.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
On behalf of the Board:
Mark O'Dea, Executive Chairman
Neither 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 release.
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to completion of the Offering, use of proceeds of the Offering, and information with respect to future exploration and development plans concerning the Karma and Liguidi projects. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", "estimates", "intends", "anticipates" or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made at the date that such statements are made. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including a need to reallocate the use of proceeds of the Offering due to changes in the exploration and development plans for the Karma and Liguidi projects, or for other prudent business reasons, and the risk factors disclosed elsewhere in the Company's public disclosure. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information contained herein is presented for the purposes of assisting investors in understanding the Company's financial and operating performance and the Company's plans and objectives and may not be appropriate for other purposes. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.