Discovery Metals Closes $9.0 Million Private Placement With $7.7 Million Investment From Eric Sprott
25 July 2019 - 9:47PM
Discovery Metals Corp. (“
Discovery”) (TSXV: DSV)
is pleased to announce that it has closed its non-brokered private
placement (the “
Private Placement”) previously
announced on July 18, 2019, raising $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 (through 2176423 Ontario Ltd., a
corporation which is beneficially owned by him) acquired 17,564,000
Common Shares of the Private Placement, and as a result he is now
the beneficial owner of 19.9% of Discovery’s issued and outstanding
Common Shares. Prior to the closing of the Private Placement, Mr.
Sprott did not hold any securities of Discovery. In addition, Mr.
Sprott has acquired 15,935,000 Subscription Receipts that, if
converted, will maintain his 19.9% interest in Discovery after
completion of the acquisition of Levon Resources Ltd
(“Levon”), as described below. Mr. Sprott’s total
investment in Discovery through the Private Placement is $7,704,770
comprised of $4,039,720 for the Common Shares and $3,665,050 for
the Subscription Receipts.
Proceeds from the Subscription Receipts have
been placed in escrow, 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”). The Levon Transaction is
described in a news release dated May 30, 2019. On conversion, each
Subscription Receipt will automatically convert into one Common
Share, for no additonal 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 closed this financing and we
welcome Mr. Sprott as our largest shareholder. Discovery is now
solidly financed and is well-positioned to aggressively explore and
develop its district-scale silver-rich projects in a rallying
precious metals price environment.”
Certain insiders of Discovery have acquired
Common Shares in the Private Placement, representing less than 2%
of the total issued Common Shares after closing. These acquisitions
are considered "related party transactions" as defined under
Multilateral Instrument 61-101.
Discovery has paid finders’ fees of $17,500 to
certain arms’ length parties who introduced Discovery to investors,
in accordance with the policies of the TSX Venture Exchange. The
securities are subject to a statutory hold period expiring November
25, 2019.
The Common Shares and Subscription Receipts were
acquired by Mr. Sprott through 2176423 Ontario Ltd. for investment
purposes. Mr. Sprott has a long-term view of the investment and may
acquire additional securities of the Company including on the open
market or through private acquisitions or sell securities of the
Company including on the open market or through private
dispositions in the future depending on market conditions,
reformulation of plans and/or other relevant factors. A copy of
2176423 Ontario Ltd.’s early warning report will appear on the
Discovery's profile on SEDAR and may also be obtained by calling
(416) 362-7172 (200 Bay Street, Suite 2600, Royal Bank Plaza, South
Tower, Toronto, Ontario M5J 2J1).
About Discovery
Discovery is focused on discovering and
advancing high-grade polymetallic deposits in a land package of
approximately 150,000 hectares covering a 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 (the
“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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