NuLegacy
Gold commences a private placement of
100,000,000 units (“
Units”) at a price of
C$0.01 per Unit for gross proceeds of
C$1.0 million (the “
Offering”)
sufficient to maintain the ownership and advance the value of its
100% ownership/controlling interest in the highly prospective Red
Hill property in the Cortez Gold trend of Nevada through to
December 2025.
Each Unit consists of one common share of the
Company (a “Common Share”) and one transferable
warrant to purchase an additional Common Share for a period of five
years at a nominal1 exercise price of C$0.05 per share (a
“Warrant”).
NuLegacy Gold is pleased to report that Crescat
Capital, together with NuLegacy’s directors and advisors have
provided a minimum lead commitment of C$550,000 to purchase 55
million Units of the total 100 million Unit Offering (the
“Lead Commitment”) described herein. Use of
proceeds:
Expenditure Item |
Assuming 100% of the
Offering |
Mineral Properties Maintenance
Costs2 |
$399,000 |
General and Administrative |
$300,000 |
Issue expenses est’d. |
75,000 |
Related party expenses |
65,000 |
Unallocated Working Capital |
$161,200 |
Total: |
$1,000,000 |
Exploration Update: Since
December 2023, our Exploration Manager Charles Weakly, and our team
of successful3 Carlin deposit discovery geologists completed a deep
dive into the Red Hill database:
- Affirming4 the promise of the
previously identified as yet untested targets (four) in the Mid and
South-rifts, and,
-
Adding two new targets, one of which is outside the previous focus
of exploration area, thus warranting this disclosure:
-
Located well to the west and identified by the tried and true
‘hand-calculations and cross-section creation’ of Robert
Leonardson5, long considered the ‘dean’ of Carlin-type gold system
geologists, and
-
Geologically analogous to the prolific Cambrian dolomite/Eureka
gold systems just south of Red Hill in the Cortez trend, further
details to follow upon full team review.
An Annual General Meeting is being
called for October 7th, 2024, to
approve capitalization restructuring: With the change of
scale in the Company’s operations (see “More on Business and
further cost rationalization” below), it is considered the
appropriate time for a roll back/reverse split of the Company’s
issued capital to assist the Company in re-establishing itself as a
‘viable’ enterprise.
NuLegacy Gold intends to seek shareholder and
TSX Venture Exchange (the “Exchange”) approvals
for a consolidation or reverse split of its capital stock on the
basis of a 25 old shares to 1 new share ratio (the
“Consolidation”). The Consolidation shall be
subject to approval of 50% plus 1 vote of the votes cast at the
Company’s 2024 annual general meeting of shareholders as planned
for October 7, 2024, to consider and, if deemed appropriate,
approve the Consolidation.
Following the approvals and implementation of
the Consolidation, the post-consolidated Warrant exercise price
would be deemed to be C$1.25; however, the Company intends to apply
to the Exchange6 to have the Warrant exercise price amended to an
exercise price of C$0.50 (the “Price Amendment”).
Effectively that would make the warrant exercisable at C$0.02 per
share on a pre-reverse split basis, and the Company’s new
capitalization will be substantially as follows on a pre and post
25:1 reverse split (RS) basis:
|
|
Pre-RS |
Post RS |
Current shares outstanding |
636,573,953 |
25,462,958 |
63.8 |
% |
Planned PP financing |
|
100,000,000 |
4,000,000 |
10.0 |
% |
Property cost reduction |
|
42,000,000 |
1,680,000 |
4.2 |
% |
Sub-total of additions |
|
142,000,000 |
5,680,000 |
14.2 |
% |
|
|
|
|
|
New total shares outstanding |
778,573,953 |
31,142,958 |
78.1 |
% |
New wts with planned offering and |
|
|
property cost reduction |
|
142,000,000 |
5,680,000 |
14.2 |
% |
Existing wts |
|
40,742,400 |
1,629,696 |
4.1 |
% |
Existing options |
|
36,200,000 |
1,448,000 |
3.6 |
% |
Sub-totals of dilutables |
|
218,942,400 |
8,757,696 |
21.9 |
% |
|
|
|
|
|
Fully diluted totals outstanding |
997,516,353 |
39,900,654 |
100.0 |
% |
As a condition for acceptance of the Price
Amendment, the Exchange will require that if, for any 10
consecutive trading days during the unexpired term of the Warrants
(the “Premium Trading Days”), the closing price of
the Company’s shares as traded on the Exchange exceeds the new
exercise price by 25% or more (i.e., C$0.625 or more), then the
Warrants shall have a reduced exercise period of 30 days (the
“Accelerated Exercise Period”) which will begin no
more than seven (7) calendar days after the tenth Premium Trading
Day.
Property cost rationalization:
NuLegacy Gold also announces that its subsidiary, NuLegacy Gold
Corporation NV (“NuLegacy US”), and Idaho
Resources Corporation, a subsidiary of Metalla Royalty &
Streaming Ltd. (“Metalla”), have amended NuLegacy
US’ mining lease over a portion of the unpatented lode mining
claims comprising the Red Hill Property (the “Idaho
Claims”) to eliminate NuLegacy US’ obligation to incur
annual exploration expenditures of ~US$150,000 per annum on or for
the benefit of the Idaho Claims for calendar years 2024 and 2025 in
consideration for NuLegacy Gold issuing, subject to acceptance of
the Exchange, a total of 42,000,000 units (the “Amendment
Units”) to Metalla at a deemed price of C$0.01 per
Amendment Unit and having an aggregate deemed price of C$420,000.
The Amendment Units will be issued on the same basis as the Units
being offered under the Offering including, upon completion of the
Consolidation and Exchange acceptance, the Price Amendment and
Accelerated Exercise Period. The Company shall also discharge the
2% GSR in favour of NuLegacy Gold on the claims covered by the
Idaho lease.
Mini-Max Participation: Apart
from the Lead Commitment, the minimum ‘individual’ participation
has been set at C$3,500/US$2,500, to provide our many long-term
individual shareholders with the opportunity to participate. As
most of the Company’s expenditures are in US$ we are happy to
receive subscription payments in US$ at a conversion price set at
US$1=C$1.40.
Minimum/Maximum Subscriptions:
Initial closing is scheduled for August 27th, 2024.
Subscriber |
Minimum |
Maximum |
Individual |
C$3,500 (US$2,500) |
C$140,000 (US$100,000) |
Institutional |
C$70,000 (US$50,000) |
C$280,000 (US$200,000) |
|
Business and further cost
rationalization:
-
As reported above, with the generous cooperation of the lessor of
the Idaho Claims, we have reduced Red Hill’s ‘claims maintenance
budget’ to a more manageable US$ ~275,000/year for 2024 and 2025
(from the ~US$ 500,000 of BLM fees and minimum exploration
expenditures, etc.).
-
Since suspending drilling in December 2023, costs have been reduced
significantly while advancing Red Hill’s value (see above under
“Target/Exploration Update”):
-
Executive management personnel have been reduced by half, and the
salaries/fees of the remaining executives have been reduced by
25%.
- Administrative staffing has also
been reduced to the minimum required for maintenance of the
Company’s continuing business.
- Currently, NuLegacy Gold has four
directors, and a search has begun to add two new directors, thus
allowing our aging founding director Dr. Steininger the opportunity
to retire, and to add new energy to the Company by having one of
the candidates possibly assume the role of CEO, allowing Mr.
Matter, who has had some health issues, to reduce his executive
commitment to the Company.
Offering Notes: The Offering is
subject to, among other things, acceptance of the Exchange and all
securities issued pursuant to the Offering will be subject to a
four month hold period from the date of Closing. In addition to any
applicable resale restrictions under Securities Laws, all
securities issued at a price or deemed price that is less than
$0.05, will be subject to the Exchange Hold Period of four months
and legended accordingly. The Company may pay 7% finder’s fees in
cash or Common Shares or any combination thereof to certain finders
and/or advisors in connection with the sale of Units in accordance
with the policies of the Exchange.
Pursuant to the Lead Commitment, insiders of the
Company have committed to subscribe for a minimum of 55 million
Units of the Offering. Such insider participation will be exempt
from the valuation and minority shareholder approval requirements
of Multilateral Instrument 61-101 ("MI 61-101") by
virtue of the exemptions contained in sections 5.5(a) and 5.7(1)
(a) of MI 61-101 on the basis that the fair market value of the
consideration for the Units to be issued to the insiders will not
exceed 25% of the Company’s market capitalization.
The Company expects to file a material change
report in connection with, inter alia the Offering less than 21
days before the expected closing of the Offering as the Company
wishes to close on an expedited basis in order to fund the annual
BLM and county maintenance fees for the Red Hill property prior to
the September 1, 2024 deadline and for sound business reasons.
The securities described herein have not been,
and will not be, registered under the United States Securities Act
of 1933, as amended (the "U.S. Securities Act"),
or any state securities laws, and accordingly, may not be offered
or sold within the United States except in compliance with the
registration requirements of the U.S. Securities Act and applicable
state securities requirements or pursuant to exemptions therefrom.
This press release does not constitute an offer to sell or a
solicitation to buy any securities in any jurisdiction.
About NuLegacy Gold:
Exploration: NuLegacy is focused on exploring for
high-grade Carlin-style gold deposits on its premier 108
sq. km (42 sq. mile) district scale Red Hill property. The Red Hill
is on trend/adjacentI to three of Nevada Gold Mines’ most
profitable multi-million ounce
Carlin-type gold mines; the Pipeline, Cortez and
GoldrushII with their massive 50+ million ounces gold endowment.
These are three of the world’s thirty largest, lowest cost, highest
grade, and politically safest gold mines, producing annually circa
3% of the world’s gold.
- The
similarity and proximity of these deposits in the Cortez Trend
including Goldrush are not necessarily indicative of the gold
mineralization in NuLegacy’s Red Hill Property.
- Currently structured as an
underground mine Goldrush contains P&P: 7.8 M oz @ 7.29 g/t;
M&I: 8.5 M oz @ 7.07 g/t (inclusive of P&P); and Inferred:
4.5 M oz @ 6.0 g/t (as of December 31, 2021). Source: Corporate
presentation of Nevada Gold Mines – Goldrush Underground dated
September 22, 2022.
On Behalf Of The Board Of NuLegacy Gold
Corporation
Albert J. Matter, Chief Executive Officer &
Cofounding Director Tel: +1 (604) 639-3640; Email:
albert@nuggold.com
For more information about NuLegacy visit:
www.nulegacygold.com or www.sedarplus.ca
Dr. Roger Steininger, a Director of NuLegacy, is
a Certified Professional Geologist (CPG 7417) and the qualified
person as defined by NI 43-101, Standards of Disclosure for Mineral
Projects, responsible for approving the scientific and technical
information contained in this news release.
Cautionary Statement on Forward-Looking
Information: This news release contains forward-looking
information and statements under applicable securities laws, which
information and/or statements relate to future events or future
performance (including, but not limited to, the Offering, the
proposed size, timing and use of proceeds therefrom and the
anticipated Lead Commitment for and participation of insiders in
the Offering, the prospective nature of the Red Hill Property
including the targets identified thereon and the proposed
Consolidation, Warrant Price Amendment and post-Consolidation
capitalization of the Company) and reflect management’s current
expectations and beliefs based on assumptions made by and
information currently available to the Company. Readers are
cautioned that such forward-looking information and statements are
neither promises nor guarantees, and are subject to risks and
uncertainties that may cause future results to differ materially
from those expected including, but not limited to, market
conditions, availability of financing, actual results of
exploration activities and drilling, unanticipated geological,
stratigraphic and structural formations, misinterpretation or
incorrect analysis of projected geological structures, alterations
and mineralization, environmental risks, operating risks, adverse
weather conditions, accidents, labour issues, delays in obtaining
governmental approvals and permits, inability to secure drilling
equipment and/or contractors on a timely basis or at all, delays in
receipt of assay results from third party laboratories, inflation,
future prices for gold, changes in personnel and other risks in the
mining industry. There are no assurances that the net proceeds from
the Offering will be sufficient to maintain and advance the Red
Hill Property and the Company’s continued operations through
December 2025, that the Consolidation will be approved by the
Company’s shareholders and the Exchange or that the Warrant Price
Amendment will be affected on the basis contemplated herein or at
all. Furthermore, there are no known mineral resources or reserves
in the Red Hill Property and the presence of gold resources on
properties adjacent or near the Red Hill Property including the
Goldrush deposit is not necessarily indicative of the gold
mineralization on the Red Hill Property. Future exploration
programs on the Red Hill Property, if any, will be exploratory
searches for ore. There is also uncertainty surrounding elevated
inflation and high interest rates, the ongoing wars in Ukraine and
Gaza and the continued spread and severity of COVID-19, and the
impact they will have on the NuLegacy’s operations, personnel,
supply chains, ability to raise capital, access properties or
procure exploration equipment, supplies, contractors, and other
personnel on a timely basis or at all and economic activity in
general. All the forward-looking information and statements made in
this news release are qualified by these cautionary statements and
those in our continuous disclosure filings available on SEDAR+ at
www.sedarplus.ca. The forward-looking information and statements in
this news release are made as of the date hereof and the Company
does not assume any obligation to update or revise them to reflect
new events or circumstances save as required by applicable law.
Accordingly, readers should not place undue reliance on
forward-looking information and statements.
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 release.
1 Application to be reduced - pending.2 For 2024 and 2025.3
https://bit.ly/NUGgeos4 Review session on July 30-31, 2024, Elko,
NV.5 Versus computer generated, as more ounces have been found with
a pen than with a drill!6 Company has had preliminary conversations
with the Exchange regarding the Price Amendment.
Nulegacy Gold (TSXV:NUG)
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Nulegacy Gold (TSXV:NUG)
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