Discovery Metals Announces a $9.0 Million Private Placement With a $7.7 Million Investment From Eric Sprott
18 July 2019 - 9:00PM
Discovery Metals Corp. (“
Discovery”) (TSXV: DSV)
is pleased to announce that it intends to complete a non-brokered
private placement (the “
Private Placement”) to
raise $9,004,770 through the issuance of 23,216,174 common shares
(“
Common Shares”) at a price of $0.23 per Common
Share and 15,935,000 subscription receipts (“
Subscription
Receipts”) at a price of $0.23 per Subscription Receipt.
Mr. Eric Sprott has agreed to purchase
17,564,000 Common Shares of the Private Placement, which will
result in him holding 19.9% of Discovery’s issued and outstanding
Common Shares, post-closing of the Private Placement. In addition,
Mr. Sprott will acquire 15,935,000 Subscription Receipts which, if
converted, will maintain his 19.9% interest in Discovery following
the completion of the acquisition of Levon Resources Ltd
(“Levon”), as described below.
Proceeds from the Subscription Receipts will be
placed in escrow on the closing of the Private Placement, to be
released to Discovery on the closing of the plan of arrangement
pursuant to which Discovery intends to acquire all the issued and
outstanding common shares of Levon (the “Levon
Transaction”), as announced in a news release dated May
30, 2019. On conversion, each Subscription Receipt will
automatically convert into one Common Share, for no additional
consideration. In the event that the Levon Transaction is not
completed by August 31, 2019, each Subscription Receipt will be
cancelled, and the subscription funds will be returned to the
subscriber.
Taj Singh, President and CEO of Discovery
commented, “We are excited to have Mr. Sprott’s support as we enter
into our next phase of growth. His investment ensures Discovery is
well funded to pursue its exploration plans for its Coahuila
projects and also for the Cordero project, which will be added to
Discovery’s portfolio upon closing of the Levon Transaction. For
Discovery and Levon shareholders, Mr. Sprott’s investment is a
strong endorsement of the combined company’s future business
plans.”
The proceeds of the Private Placement will be
used primarily to fund Discovery’s continuing exploration program
at Cordero, following the closing of the Levon Transaction, and the
Coahuila projects (Puerto Rico, Minerva and Monclova). A portion of
the proceeds will be used for general working capital purposes.
Discovery anticipates that certain insiders will
acquire securities in the Private Placement. To the extent such
insiders participate in the Private Placement, any such
participation would be considered a “related party transaction” as
defined under Multilateral Instrument 61-101.
Discovery may pay a finder’s fee to one or more
arms’ length parties who introduce Discovery to investors, in
accordance with the policies of the TSX Venture Exchange (the
“Exchange”). The securities issued will be subject
to a four-month-and-one-day statutory hold period from the date of
issuance. Closing of the Private Placement remains subject to
Exchange approval.
About Discovery Metals
Discovery is focused on discovering and
advancing high-grade polymetallic deposits in a recently assembled
land package of approximately 150,000 hectares over a large and
historic mining district in Coahuila State, Mexico. The portfolio
of three large-scale, drill-ready projects and several
earlier-stage prospects, all with shallow high-grade Ag-Zn-Pb
mineralization, is situated in a world-class carbonate replacement
deposit belt that stretches from southeast Arizona to central
Mexico. The land holdings contain numerous historical direct-ship
ore workings with several kilometers of underground development,
but there was no modern exploration or drill testing on the
properties prior to the work carried out by Discovery. For further
information, please visit Discovery's website at
www.dsvmetals.com.
Levon is exploring one of the world’s largest
silver resources at its 100%-owned Cordero Project in Chihuahua
State, Mexico. The 37,000 hectare property covers an entire
porphyry district that hosts the announced resource and numerous
exploration targets for bulk tonnage diatreme-hosted,
porphyry-style, and carbonate replacement deposits. For further
information please visit Levon’s website at www.levon.com, and the
news release of Discovery dated May 30, 2019 as filed on SEDAR.
For Further Information:
Discovery Metals Corp.(416) 613-9410info@dsvmetals.com
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the Exchange) accepts responsibility for the adequacy
or accuracy of this release.
This news release may include forward-looking
statements that are subject to inherent risks and uncertainties.
All statements within this news release, other than statements of
historical fact, are to be considered forward looking. Although
Discovery believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and actual
results or developments may differ materially from those described
in forward-looking statements. Factors that could cause actual
results to differ materially from those described in
forward-looking statements include fluctuations in market prices,
including metal prices, continued availability of capital and
financing, and general economic, market or business conditions.
There can be no assurances that such statements will prove accurate
and, therefore, readers are advised to rely on their own evaluation
of such uncertainties. There can be no assurance that the Levon
Transaction or the Private Placement will close on the announced
terms. Discovery does not assume any obligation to update any
forward-looking statements except as required under applicable
laws.
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