SIGNATURE ANNOUNCES CLOSING OF FIRST TRANCHE OF PREVIOUSLY ANNOUNCED PRIVATE PLACEMENT
Not for distribution to U.S. news wire services or dissemination in the United States
FOR IMMEDIATE RELEASE August 25, 2020
Toronto, Ontario, August 25, 2020 – Signature Resources Ltd. (TSXV: SGU, OTCQB: SGGTF, FSE 3S3) ("Signature" or the "Company") is pleased to announce the closing of the first tranche of the non-brokered private placement announced on August 17, 2020 (the "Offering"). In this first tranche, the Company raised aggregate gross proceeds of $1,170,034 (the “First Tranche") by issuing 22,560,686 hard dollar units ("HD Units") at a price of $0.05 per HD Unit and 700,000 flow-through units ("FT Units") at a price of $0.06 per FT Unit. The Company expects to close on the balance of the $1,500,000 Offering in a second tranche.
"We are extremely pleased to that investors have enthusiastically embraced this first tranche of our Offering. They recognize the potential of Signature as the company continues to explore and develop its Lingman Lake gold property," commented Walter Hanych, CEO and President.
Each HD Unit issued pursuant to the First Tranche consists of one common share of the Company (each, a "Common Share") and one common share purchase warrant (each, a "Warrant"). Each FT Unit consists of one common share of the Company issued on a flow-through basis ("FT Share") and one half of one (1/2) Warrant. Each whole Warrant issued pursuant to the First Tranche will be exercisable into one Common Share at a price of $0.10 until August 25, 2022, provided that if after four months and one day following the closing of the First Tranche, the closing price of the Company's Common Shares on the TSX Venture Exchange is equal to or greater than $0.20 for 10 consecutive trading days, then the Company may accelerate the expiry date of the Warrants by disseminating a press release and in such case the Warrants will expire on the 30th day after the date on which such press release is disseminated by the Company. The FT Shares will qualify as “flow-through shares” (within the meaning of the Income Tax Act (Canada)).
In connection with the First Tranche. the Company paid aggregate cash finder's fees of $51,640 and issued 1,018,800 finder's warrants (each, a "Finder's Warrant"). Each Finder's Warrant is exercisable to acquire one Common Share at a price of $0.05 (for Finder's Warrants issued pursuant to the sale of HD Units) and $0.06 (for Finder's Warrants issued pursuant to the sale of FT Units) for a period of 24 months following closing of the First Tranche.
The Company also wishes to announce that a crew has been dispatched to the Lingman property to prepare the camp for a field exploration teams, which will be arriving beginning of September, to access high priority geophysical targets. The camp will also be upgraded for winter conditions in anticipation of winter drill program in 2021.
Signature intends to use the proceeds of the Offering for general working capital purposes, and for the development of the Company's Lingman Lake Project. The proceeds of the Offering related to FT Units will be used to incur eligible Canadian exploration expenses, as defined under the Income Tax Act (Canada) ("Qualifying Expenditures"), on or before December 31, 2021 for the continued advancement of the Company's Lingman Lake project. The Company will renounce the Qualifying Expenditures to investors with an effective date of no later than December 31, 2020.
The purchase of HD Units under the First Tranche of the Offering by Walter Hanych (Chief Executive Officer of the Company) constituted a “related party transaction” as such term is defined by Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company was exempt from the MI 61-101 valuation and minority approval requirements for related party transactions in connection with the Offering under sections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves Mr. Hanych, exceeds 25% of the Company’s market capitalization (as determined under MI 61-101).
