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TORONTO, Nov. 9, 2020 /CNW/ - Troilus Gold Corp. (TSX:
TLG) (OTCQB: CHXMF) ("Troilus" or the "Company") announces that it
has entered into a definitive agreement with First Quantum Minerals
Ltd. ("FQML") pursuant to which it will buy back the sliding 2.5%
Net Smelter Royalty (the "NSR") attached to the 81 mineral claims
and one surveyed mining lease known as the Troilus Mine, which were
previously acquired from FQML (see press release dated April 12, 2018), thereby cancelling the FQML NSR.
In consideration for the repurchase and cancellation of the FQML
NSR, Troilus will pay cash consideration of C$20M to FQML from cash on hand. The transaction
is expected to close within the next 24 hours.
Troilus also announces that it has entered into an agreement
with Cormark Securities Inc., on behalf of a syndicate of
underwriters (collectively, the "Underwriters"), pursuant to which
the Underwriters have agreed to purchase, on a bought deal public
offering basis 5,470,000 common shares of the Company that qualify
as "flow-through shares" for the purposes of the Income Tax
Act (Canada) and Taxation
Act (Quebec) (the
"Flow-Through Shares"), at a price of C$1.92 per Flow-Through Share (the "Flow-Through
Offering Price") for gross proceeds of C$10,502,400.
Pursuant to the agreement, the Underwriters have also agreed to
purchase, on a bought deal private placement basis, 9,100,000
common shares (the "Common Shares") of the Company, at a price of
C$1.10 per Common Share (the "Common
Share Offering Price") for gross proceeds of C$10,010,000.
The Common Shares and the Flow-Through Shares are collectively
referred to herein as the "Offered Shares". The aggregate gross
proceeds of the two offerings will be approximately C$20.5 million.
Troilus CEO Justin Reid
commented, "We view the buy-back of the FQML NSR as a highly
accretive transaction to Troilus shareholders based on the
modelling and economics as presented in the recently filed positive
preliminary economic assessment (see news releases dated
August 31, 2020 and October 15, 2020). When presented with the chance
to repurchase and cancel a 2.5% NSR on the Troilus Project, we were
eager to take advantage of this opportunity to further improve the
economics and value of our project. Subject to completion, the
proceeds of the offerings will replenish our balance sheet and
enable us to accomplish our exploration and development
objectives."
The Underwriters also have an option to purchase up to 820,500
additional Flow-Through Shares at the Flow-Through Offering Price,
for market stabilization purposes and to cover over-allotments, if
any, for a period expiring 30 days after the date of closing
for additional proceeds of up to C$1,575,360, assuming the over-allotment is
exercised in full.
The net proceeds from the offerings will serve to replenish the
Company's balance sheet following the utilisation of cash on hand
for the buy-back of the FQML NSR. The Company would not have
proceeded with the buy-back transaction without entering into the
agreement for the offerings and thereby preserve its strong cash
position.
The proceeds of the sale of the Flow-Through Shares will be used
on exploration expenses on the Troilus Gold Project as permitted
under the Income Tax Act (Canada) and the Taxation Act
(Quebec) to qualify as "Canadian
exploration expenses", "flow-through mining expenditures" and, for
eligible investors, for the two 10% enhancements under section
726.4.9 and section 726.4.17.1 of the Taxation
Act (Quebec). The
proceeds of the sale of the Common Shares will be used for the
Company's previously planned development program for the Troilus
Gold Project and for working capital purposes.
The Flow-Through Shares will be offered by way of short form
prospectus in each of the provinces of Canada, pursuant to
National Instrument 44-101 – Short Form Prospectus
Distributions and some may be resold in the United States pursuant to an exemption
from the registration requirements of the United States
Securities Act of 1933, as amended (the "U.S. Securities Act")
and in such other jurisdictions outside of Canada and
the United States as agreed to by
the Company, in each case in accordance with all applicable laws
and provided that no prospectus, registration statement or similar
document is required to be filed in such jurisdiction.
The Common Shares will be offered on a private placement basis
solely in the United States
pursuant to an exemption from the registration requirements of the
U.S. Securities Act, and internationally, as permitted. It is
intended that the Underwriters will seek to arrange for a large,
value focused US institution to acquire all or a significant
portion of the Common Shares as a substituted purchaser for the
Common Shares.
The offerings are scheduled to close on or before December 1, 2020 and are subject to certain
conditions including, but not limited to, receipt of all applicable
regulatory approvals, including the approval of the Toronto Stock
Exchange and the applicable securities regulatory authorities.
The Offered Shares have not been, and will not be, registered
under the U.S. Securities Act or any U.S. state securities laws,
and may not be offered or sold in the
United States or to, or for the account or benefit of,
United States persons absent
registration or any applicable exemption from the registration
requirements of the U.S. Securities Act and applicable U.S. state
securities laws. This press release shall not constitute an offer
to sell or the solicitation of an offer to buy securities in
the United States, nor will there
be any sale of these securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful.
About Troilus Gold Corp.
Troilus is a Toronto-based,
Quebec focused, advanced stage
exploration and early-development company focused on the mineral
expansion and potential mine re-start of the former gold and copper
Troilus mine. The 107,326 hectare Troilus property is located
within the Frotêt-Evans Greenstone Belt in Quebec, Canada. From 1996 to 2010, Inmet
Mining Corporation operated the Troilus project as an open pit
mine, producing more than 2,000,000 ounces of gold and nearly
70,000 tonnes of copper.
Cautionary Note Regarding Forward-Looking Statements and
Information
This press release contains forward-looking statements and
forward-looking information (collectively, "forward-looking
statements") within the meaning of applicable securities laws. Such
forward-looking statements include, without limitation, statements
regarding the closing of the NSR buy-back and its impact on the
Company, the closing of the offerings, the timing of the closing of
the offerings, the use of proceeds from the Offerings, the receipt
of regulatory approvals, the exercise of the option granted to
the Underwriters and future results of operations, performance and
achievements of the Company. Although the Company believes that
such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be
correct. Forward-looking statements are typically identified
by words such as: believe, expect, anticipate, intend, estimate,
postulate and similar expressions, or are those, which, by their
nature, refer to future events. The Company cautions investors that
any forward-looking statements by the Company are not guarantees of
future results or performance, and that actual results may differ
materially from those in forward-looking statements as a result of
various factors and risks, including, uncertainties with respect to
obtaining all regulatory approvals to complete the offerings,
uncertainties relating to the COVID-19 pandemic, uncertainties of
the global economy, market fluctuations, the discretion of the
Company in respect to the use of proceeds discussed above, any
exercise of termination by counterparties under applicable
agreements, the Company's inability to obtain any necessary
permits, consents or authorizations required for its activities, to
produce minerals from its properties successfully or profitably, to
continue its projected growth, to raise the necessary capital or to
be fully able to implement its business strategies and other risks
identified in its disclosure documents filed at www.sedar.com. This
press release is not, and is not to be construed in any way
as, an offer or recommendation to buy or sell securities in
Canada or in the United States.
Although the Company believes the expectations expressed in
such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future
performance and actual events, results and/or developments may
differ materially from those in the forward-looking statements.
Readers should not place undue reliance on the Company's
forward-looking statements. The Company does not undertake to
update any forward-looking statement that may be made from time to
time by the Company or on its behalf, except in accordance with and
as required by applicable securities laws.
SOURCE Troilus Gold Corp.