NexGold Mining Corp. (
TSXV: NEXG; OTCQX:
NXGCF) (“
NexGold”) and
Signal
Gold Inc. (TSX: SGNL; OTCQB: SGNLF) (“
Signal
Gold”) are pleased to announce the successful completion
of the previously-announced transaction pursuant to which, among
other things, NexGold acquired all of the issued and outstanding
common shares of Signal Gold (the “
Signal Shares”)
pursuant to a court-approved plan of arrangement under the Business
Corporations Act (Ontario) (the “
Arrangement”).
The Arrangement combines the two companies to create a top
near-term gold developer advancing NexGold’s Goliath Gold Complex
Project (“
Goliath Project”) in Northern Ontario
and Signal Gold’s Goldboro Gold Project (“
Goldboro
Project”) in the historic Goldboro Gold District in Nova
Scotia.
Kevin Bullock, President, CEO and Director of
the combined company, stated: “Today we have created a stronger and
larger company with two cornerstone assets that we believe are
near-term gold development projects. We have also strengthened the
balance sheet, and now have a great opportunity to create immense
value for our combined shareholder base. We extend our thanks to
shareholders, stakeholders and our Rightsholders that will help us
realize our vision. With this transaction, NexGold is primed to
move forward on our path to development.” Mr. Bullock continued: “I
would like to thank the outgoing members of the Signal Gold board
of directors for their diligence and hard work in moving us towards
this next phase.”
Pursuant to the Arrangement, former Signal Gold
shareholders received 0.1244 of a NexGold common share (each whole
share, a “NexGold Share”) in exchange for each
Signal Share held. NexGold issued approximately 31.9 million
NexGold Shares to former Signal Gold shareholders, prior to taking
into consideration any of the financings connected to the
Arrangement, representing approximately 70% and 30% of the issued
and outstanding NexGold Shares, respectively, on a fully-diluted
in-the-money basis and without taking into account any securities
of NexGold issued in connection with the Arrangement. As of
the completion of the Arrangement, there are 142,246,958
NexGold Shares outstanding.
Board of Directors and Senior Management
of Combined Company
Mary-Lynn Oke (a former Signal Gold director)
and Kevin Bullock have joined the NexGold Board of Directors (the
“Board”). Reporting to the Board, the combined
company will be managed by Kevin Bullock as President and Chief
Executive Officer, Jeremy Wyeth as Chief Operating Officer and Orin
Baranowsky as Chief Financial Officer.
Jim Gowans, Chairman of NexGold, stated: “I am
excited for the path forward for NexGold, a company that I believe
has two of the most advanced gold projects in Canada, with
significant exploration potential and an excellent team in place
capable of delivering on a clear path to being a multi-asset
producer. With the recently announced Benefits Agreement with the
Assembly of Nova Scotia Mi’kmaq, the first of its kind in the
Province of Nova Scotia, NexGold has demonstrated a commitment to
building meaningful relationships towards mutual benefits with the
Mi’kmaq of Nova Scotia in a responsible, respectful and sustainable
manner.”
Mr Gowans continued: “I would like to welcome
Kevin and Mary-Lynn to the Board and would like to thank Michele
Ashby for her contributions to the Board as Chair of the
Compensation Committee and Jeremy Wyeth, who will be taking on the
newly-created role of Chief Operating Officer responsible for the
successful delivery of the Goliath and Goldboro Projects. I’d also
like to thank Morgan Lekstrom, who will continue on as a Director,
for his instrumental leadership and contributions to the creation
of NexGold, creating a clear vision and strong path forward to
being one of the next Canadian mid-tier gold companies”.
Debt Restructuring
NexGold and Signal Gold are also pleased to
announce the completion of a restructuring of the two entities’
respective debt facilities (the “Debt
Restructuring”), significantly reducing the debt profile
of the combined entity going forward. Signal Gold’s outstanding
credit facility of approximately US$20.8 million with Nebari and
NexGold’s US$6.2 million facility with Extract Capital
(“Extract”) have been repaid in connection with
the Arrangement.
Under the Debt Restructuring, NexGold has
entered into a new US$12.0 million facility with Nebari, which has
a 30-month term with an interest rate of 11.4%, payable monthly in
arrears and secured against both the Goliath and Goldboro Projects.
Under the facility, existing Signal Gold warrants associated with
the prior Nebari facility were cancelled, and 3,160,602 new NexGold
warrants were issued to Nebari with an exercise price of $1.00 per
NexGold Share with a term of 30 months.
In addition, Nebari has paid NexGold US$6.0
million for a 0.6% net smelter return royalty (the
“Royalty”) on the Goldboro Project, which includes
a 100% buy-back right for the first 30 months at NexGold’s option.
If the Royalty is not repurchased during the 30-month period, then
the Royalty rate shall increase to 2.0%.
The new Nebari facility and Royalty, together
with a US$4.0 million equity placement with Nebari and certain
proceeds from the Signal Gold subscription receipt financing, as
well as existing working capital, were used to retire the existing
Nebari and Extract debt.
Steven Bowles, Managing Director of Nebari,
stated: “We have been monitoring the progress of the Goliath
Project for many years and have been a partner with Signal in
advancing the Goldboro Project. We are very pleased to continue
this relationship with NexGold as they progress the development of
both of their advanced projects. The experience and dedication of
the combined teams demonstrated throughout Nebari’s due diligence
during the merger process between NexGold and Signal provides us
with a great deal of confidence in the organization’s ability to
execute on its development plans and are excited to add another
asset in a Tier-One mining jurisdiction to our growing
portfolio.”
Advisory Shares
In connection with the Arrangement, Fiore
Management and Advisory Corp. was issued 638,334 NexGold Shares in
consideration for advisory services provided to NexGold.
BMO Nesbitt Burns Inc. will be issued NexGold
Shares as partial consideration for financial advisory services
provided to Signal Gold in connection with the Arrangement. The
number of NexGold Shares to be issued will be determined based on
NexGold’s closing share price today and disclosed in NexGold’s
material change report to be filed in connection with the closing
of the Arrangement.
Delisting of Signal Shares
The Signal Shares are expected to be delisted
from the Toronto Stock Exchange (“TSX”) and OTCQB
Venture Market (“OTCQB”) at the close of business
on December 16, 2024 and Signal Gold intends to submit an
application to cease to be a reporting issuer and to otherwise
terminate its public company reporting requirements as soon as
possible thereafter.
About NexGold Mining Corp.
NexGold Mining Corp. is a gold-focused company
with assets in Canada and Alaska. NexGold’s Goliath Gold Complex
(which includes the Goliath, Goldlund and Miller deposits) is
located in Northwestern Ontario. The deposits benefit substantially
from excellent access to the Trans-Canada Highway, related power
and rail infrastructure and close proximity to several communities
including Dryden, Ontario. For information on the Goliath Project,
refer to the technical report, prepared in accordance with NI
43–101, entitled ‘Goliath Gold Complex – NI 43–101 Technical Report
and Prefeasibility Study’ and dated March 27, 2023, with an
effective date of February 22, 2023, led by independent consultants
Ausenco Engineering Canada Inc. The technical report is available
on SEDAR+ at www.sedarplus.ca, on the OTCQX at www.otcmarkets.com
and on NexGold’s website at www.nexgold.com.
NexGold will be advancing the Goldboro Gold
Project in Nova Scotia, a significant growth project subject to a
positive Feasibility Study. For further details, refer to the
technical report entitled ‘NI 43-101 Technical Report and
Feasibility Study for the Goldboro Gold Project, Eastern Goldfields
District, Nova Scotia’ dated January 11, 2022, with an effective
date of December 16, 2021. The technical report is available on
SEDAR+ at www.sedarplus.ca. On August 3, 2022, the Goldboro Project
received its environmental assessment approval from the Nova Scotia
Minister of Environment and Climate Change, a significant
regulatory milestone, and Signal Gold has now submitted all key
permits including the Industrial Approval, Fisheries Act
Authorization and Schedule 2 Amendment, and the Mining and Crown
Land Leases. The Goldboro Project has significant potential for
further mineral resource expansion, particularly towards the west
along strike and at depth, and the company has consolidated 28,525
hectares (~285 km2) of prospective exploration land in the Goldboro
Gold District.
NexGold also owns several other projects
throughout Canada, including the Weebigee-Sandy Lake Gold Project
JV, and grassroots gold exploration property Gold Rock. In
addition, NexGold holds a 100% interest in the high-grade Niblack
copper-gold-zinc-silver VMS project, located adjacent to tidewater
in southeast Alaska. NexGold is committed to inclusive, informed
and meaningful dialogue with regional communities and Indigenous
Nations throughout the life of all our Projects and on all aspects,
including creating sustainable economic opportunities, providing
safe workplaces, enhancing of social value, and promoting community
wellbeing. Further details about NexGold are available on NexGold’s
website at www.nexgold.com.
Contact:
Kevin BullockPresident & CEO(647)
388-1842kbullock@signalgold.com |
Orin BaranowskyChief Financial Officer(647)
697-2625obaranowsky@nexgold.com |
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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 news release. No stock exchange, securities
commission or other regulatory authority has approved or
disapproved the information contained herein.
This news release has been reviewed and approved
by Kevin Bullock, P. Eng., President and CEO of NexGold, a
"Qualified Person", under National Instrument 43-101 - Standard for
Disclosure for Mineral Projects.
Cautionary Note Regarding
Forward-Looking Information
This news release includes certain
“forward-looking information” and “forward-looking statements”
(collectively, forward-looking statements”) within the meaning of
Canadian and United States securities legislation that is based on
expectations, estimates, projections and interpretations as at the
date of this news release. Any statement that involves predictions,
expectations, interpretations, beliefs, plans, projections,
objectives, assumptions, future events or performance (often, but
not always, using phrases such as “expects”, or “does not expect”,
“is expected”, “interpreted”, “management’s view”, “anticipates” or
“does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”,
“estimates”, “potential”, “feasibility”, “believes” or “intends” or
variations of such words and phrases or stating that certain
actions, events or results “may” or “could”, “would”, “might” or
“will” be taken to occur or be achieved) are not statements of
historical fact and may be forward-looking information and are
intended to identify forward-looking information. Such
forward-looking statements include, but are not limited to,
statements regarding the expected delisting of Signal Shares from
the TSX and OTCQB and Signal Gold’s application to cease to be a
reporting issuer in Canada; expectations regarding the potential
benefits and synergies of the Arrangement and the ability of the
combined company to successfully achieve business objectives;
expectations relating to future exploration, development and
production activities; expectations regarding growth potential for
NexGold’s operations; and the company’s assessments of, and
expectations for, future business activities and operating
performance
Since forward-looking information address future
events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results could differ materially
from those currently anticipated due to a number of factors and
risks. These include, but are not limited to, the delisting of
Signal Shares from the TSX and OTCQB, and Signal ceasing to be a
reporting issuer in Canada, may not be on the timing anticipated;
the ability of the combined company to realize the benefits and
synergies of the Arrangement and the ability of the combined
company to successfully achieve business objectives, including
integrating the companies or the effects of unexpected costs,
liabilities or delays; changes to expectations relating to future
exploration, development and production activities, and growth
potential for NexGold’s operations; delays or changes in plans with
respect to exploration or development projects or capital
expenditures; the uncertainty of mineral resource, production and
cost estimates; health, safety and environmental risks; worldwide
demand for gold and base metals; gold price and other commodity
price and exchange rate fluctuations; environmental risks;
competition; incorrect assessment of the value of acquisitions;
ability to access sufficient capital from internal and external
sources; and changes in legislation, including but not limited to
tax laws, royalties and environmental regulations. Actual results,
performance or achievement could differ materially from those
expressed in, or implied by, the forward-looking information and,
accordingly, no assurance can be given that any of the events
anticipated by the forward-looking information will transpire or
occur, or if any of them do so, what benefits may be derived
therefrom and accordingly, readers are cautioned not to place undue
reliance on the forward-looking information. Neither NexGold nor
Signal Gold undertakes to update any forward-looking information,
except in accordance with applicable securities laws.
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