Jun 24, 2021
 in 
Precious Metals

Financing Moves: Gold Mountain (TSX.V: GMTN) Closes $12M Bought Deal

Gold Mountain (TSX.V: GMTN) has completed a $12M bought deal financing, led by Canaccord Genuity which included Eight Capital and Red Cloud Securities.

The Company issued a total of 4,255,190 units (the "HD Units") at a price of $2.10 per Unit and 1,326,450 flow-through units (the "FT Units") at a price of $2.31 per Unit, for total gross proceeds of approximately $12,000,000 (the "Offering"). This included the full exercise of the Underwriters' option.

After the completion of this raise, the company's treasury has increased to $18M with an additional $17M in warrants outstanding which now puts Elk on a clear path to production. Starting in November, the company will be trucking ore to New Gold's (TSX: NGD) New Afton Mine which is 133km from The Elk Gold project. Under the terms of the Ore Purchase Agreement, Gold Mountain (TSX.V: GMTN) will deliver 70,000 tonnes of ore per annum or approximately 200 tonnes per day. Per Gold Mountain's (TSX.V: GMTN) Press release dated June 17/21, the company signed an LOI with New Gold (TSX: NGD) to ramp up mining operations to 350,000 tonnes per year (400% increase), scheduled to begin in 2024.

The proceeds raised from the sale of FT Units will be used to incur "Canadian exploration expenses" that are "flow-through mining expenditures" (as such terms are defined in the Income Tax Act (Canada)) on the Company's Elk Gold Project in South Central British Columbia, Canada. The proceeds raised from the sale of HD Units will be used to advance the Elk Gold Project, as well as for working capital and general corporate purposes.

"By successfully completing this financing Gold Mountain is in a strong position as we head into the second half of 2021," commented CEO and Director of Gold Mountain, Kevin Smith. "With site development already underway and our Phase 2 drill program hitting full stride, this capital will put us in a position to continue driving the project forward on all fronts."

Each FT Unit consisted of one common share of the Company and one-half of one common share purchase warrant (each whole common share purchase warrant, a 'Warrant'), each of which will qualify as a 'flow-through share' (within the meaning of subsection 66(15) of the Income Tax Act (Canada) and entitle the holder to a renunciation of qualifying expenditures incurred by the Company in respect of the Elk Gold Project. Each HD Unit shall consist of one common share of the Company and one-half of one Warrant. Each Warrant will entitle the holder thereof to purchase one common share of the Company at an exercise price of $3.15 for a period of 2 years following the closing date of the Offering. Any common shares of the Company issued upon the exercise of Warrants will be issued on a non flow-through basis.

Officers and directors of the Corporation subscribed for a total of 60,500 HD Units, which constitute "related party transactions" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions.

Disclaimer: Gold Mountain is a paid marketing client and we own stock options*
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