Capital raise is successful
CONTACT GOLD ANNOUNCES UNDERWRITERS HAVE AGREED TO PURCHASE $4 MILLION OF COMMON STOCK IN PUBLIC OFFERING
Vancouver, B.C. (May 13, 2019) – Contact Gold Corp. (the “Company” or “Contact Gold”) (TSXV: C) is pleased to announce that further to its news release dated April 10, 2019, it has entered into an underwriting agreement with Raymond James Ltd. and Cormark Securities Inc., as joint bookrunners and underwriters, together with their U.S. affiliates Raymond James (USA) Ltd. and Cormark Securities (USA) Limited (collectively, the “Underwriters”) whereby the Underwriters have agreed to purchase 20,000,000 shares of common stock (the “Offered Shares”) at a price of $0.20 per Offered Share (the “Offering Price”) for gross proceeds of $4,000,000 (the “Offering”). The Company has granted to the Underwriters an option (the “Over-Allotment Option”), exercisable in whole or in part, in the sole discretion of the Underwriters, for a period of 30 days from and including the closing of the Offering, to purchase up to an additional 3,000,000 Offered Shares at the Offering Price. If the Over-Allotment Option is exercised in full, the total gross proceeds to the Company will be $4,600,000.
The Offering is being conducted (A) in Canada pursuant to a prospectus supplement (the “Prospectus Supplement”) to the Company’s short form base shelf prospectus dated October 24, 2018 filed in all of the provinces and territories of Canada, except for Québec (the “Canadian Jurisdictions”), and (B) to the public under an offering statement on Form 1-A, which includes an offering circular (the “Offering Statement”), pursuant to Regulation A under the U.S. Securities Act of 1933, as amended (the “1933 Act”), filed with the United States Securities and Exchange Commission (the “SEC”). The qualification of the Offering Statement by the SEC is expected to occur on or about May 15, 2019.
The Company intends to use the net proceeds of the Offering to undertake further drilling at Contact Gold’s flagship Pony Creek project located in Elko County, Nevada, for other exploration expenditures on Contact Gold’s other properties and for general working capital purposes as further detailed in the Prospectus Supplement and Offering Statement. Closing of the Offering is expected to occur on or about May 22, 2019 and is subject to the receipt of all necessary securities regulatory and stock exchange approvals.
Pursuant to an existing investor rights agreement between the Company and Waterton Nevada Splitter, LLC (“Waterton”), Waterton has the right to participate in the Offering in order to maintain its pro rata ownership interest in the Company. Waterton has notified the Company that it plans to purchase 8,448,000 Offered Shares pursuant to the Offering. As a result, Waterton will hold approximately 38% of the issued and outstanding common stock of the Company after giving effect to the Offering.
The Prospectus Supplement and the Offering Statement containing important information relating to the Offering will be filed with the securities commissions in the Canadian Jurisdictions and in the United States with the SEC, respectively. Copies of the Prospectus Supplement and the Offering Statement will be available at www.sedar.com and www.sec.gov and may be obtained from Raymond James at Raymond James Syndication, 416-777-7000, 5400-40 King St West, Toronto Ontario, M5H 3Y2, or Cormark Securities at Cormark Securities Inc., 416-943-6405, Royal Bank Plaza, South Tower, Suite 2800, 200 Bay Street, P.O. Box 63, Toronto, On M5J 2J2.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any offer or sale of any securities, in any state or jurisdiction in which the offer, solicitation, or sale of securities would be unlawful. The securities being offered have not been approved or disapproved by the SEC or any Canadian securities commission, nor has any such regulatory authority passed upon the accuracy or adequacy of the Prospectus Supplement or the Offering Statement. The securities being offered have not been and will not be registered under the 1933 Act.
About Contact Gold Corp.
Contact Gold is an exploration company focused on producing district scale gold discoveries in Nevada. Contact Gold’s extensive land holdings are on the prolific Carlin, Independence and Northern Nevada Rift gold trends which host numerous gold deposits and mines. Contact Gold’s land position comprises approximately 200 km2 of target rich mineral tenure hosting numerous known gold occurrences, ranging from early- to advanced-exploration and resource definition stage.
Additional information about the Company is available at www.contactgold.com.
