NIGHTHAWK GOLD (TSX: NHK) ANNOUNCES C$25 MILLION BOUGHT DEAL FINANCING
Nighthawk Gold Corp. has entered into an agreement, with a syndicate of underwriters co-led by Sprott Capital Partners and Laurentian Bank Securities Inc., pursuant to which the underwriters have agreed to purchase, or arrange for substitute purchasers to purchase: (i) 10 million units of the company at a price of 70 cents per unit; (ii) 3,705,000 units of the company issued on a flow-through basis at a price of 81 cents per flow-through unit; and (iii) 15.31 million units of the company issued on a premium flow-through basis at a price of 98 cents per premium flow-through unit, for aggregate gross proceeds of $25,004,850, on a bought deal basis.
Each unit will consist of one common share of the company and one-half of one common share purchase warrant. Each flow-through unit and premium flow-through unit will consist of one common share to be issued as a flow-through share under the Income Tax Act (Canada) and one-half of one warrant to be issued on a non-flow-through basis. Each warrant will entitle the holder thereof to purchase one common share on a non-flow-through basis at an exercise price of $1.05 for a period of 24 months from the date of issuance thereof.
In addition, the company shall grant the underwriters an overallotment option, exercisable in whole or in part at any time and from time to time, up to and including the date which is 30 days after the closing of the offering, in the sole discretion of the underwriters, to purchase from the treasury of the company up to an additional number of offered securities as is equal to 15 per cent of the number of the offered securities issued pursuant to the offering, on the same terms as set forth herein, to cover overallotments, if any, and for market stabilization purposes.
The net proceeds from the sale of the units will be used for general and administrative expenses and the gross proceeds from the sale of the flow-through units and premium flow-through units will be used for exploration expenditures on Nighthawk's district-scale gold property located in Canada's Northwest Territories, with the focus on mineral resource expansion opportunities and testing greenfield targets.
The offering is expected to close on or about May 3, 2022, or such other date as agreed between the company and the underwriters, and is subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory and other approvals, including the approval of the Toronto Stock Exchange. The offered securities will be offered by way of a short form prospectus in provinces of Canada, other than the province of Quebec, and the units may also be offered by way of private placement in the United States or other jurisdictions outside of Canada.
The underwriters will be paid a cash commission in connection with the offering. The underwriters will also be issued broker warrants exercisable for a period of 24 months following the closing date, to acquire in aggregate that number of common shares which is equal to 3.0 per cent of the number of offered securities sold under the offering at an exercise price of 70 cents per common share.
It is anticipated that insiders of the company may participate in the offering. By virtue of their participation, the offering would constitute a related party transaction under applicable securities laws. The company expects to release a material change report, including details with respect to the related party transaction less than 21 days prior to the closing of the offering, which the company deems reasonable in the circumstances so as to be able to avail itself of potential financing opportunities and complete the offering in an expeditious manner. As the related party transaction will not exceed specified limits and will constitute a distribution of securities for cash, it is expected that neither a formal valuation nor minority shareholder approval will be required in connection with the offering.
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