Discovery Metals Announces C$25.0 Million Private Placement With C$10.0 Million Investment From Eric Sprott
May 18 2020 - 7:00AM
Discovery Metals Corp. (“
Discovery”) (TSXV: DSV,
OTCQX: DSVMF) is pleased to announce that it intends to complete a
non-brokered private placement (the “
Private
Placement”) to raise up to C$25,000,000 through the
issuance of up to 45,454,545 units (“
Units”) at a
price of C$0.55 per Unit. Each Unit is comprised of one common
share of Discovery (“
Common Share”) and one half
of one Common Share purchase warrant, with each full warrant
exercisable at C$0.77 for a period of two years after the date of
issuance.
Mr. Eric Sprott has agreed to invest
C$10,000,000 in the Private Placement, on the acquisition of
18,181,818 Units. Assuming the Private Placement is fully
subscribed, this investment will result in Mr. Sprott holding
approximately 24.4% of Discovery’s issued and outstanding Common
Shares, post-closing.
Taj Singh, President and CEO of Discovery
commented, “The strong investment interest in Discovery is a clear
reflection of the exposure and leverage that our Cordero project
provides to a rising silver price. It is also indicative of the
very favourable investment case for silver considering the current
gold-silver ratio of 107:1 is markedly higher than the 50-year
average of approximately 60:1. Upon completion of this financing
Discovery will have over $40 million of cash on its balance sheet -
this positions Discovery as one of the best financed silver
exploration companies in the industry and provides the firepower to
aggressively advance Cordero and to accelerate our exploration
efforts on the surrounding regional property package.”
The proceeds of the Private Placement will be
used primarily to fund Discovery’s continuing exploration program
at its Cordero project and its Coahuila projects. 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. Clarus
Securities Inc. and Sprott Capital Partners LP are acting as
advisors to Discovery and finders for North American investors and
Arlington Group Asset Management Limited has been engaged to
provide advice on the Private Placement with European and
Australasian institutions. 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 TSX
Venture Exchange approval.
About Discovery
Discovery Metals Corp. (TSX-V: DSV, OTCQX:
DSVMF) is a Canadian exploration and development company
headquartered in Toronto, Canada, and focused on historic mining
districts in Mexico. Discovery’s flagship is its 100%-owned Cordero
silver project in Chihuahua State, Mexico. The 35,000-hectare
property covers a large district that hosts the announced resource
as well as numerous exploration targets for bulk tonnage
diatreme-hosted, porphyry-style, and carbonate replacement
deposits. In addition, Discovery is also exploring multiple
high-grade carbonate replacement-style silver-zinc-lead showings in
a land package of approximately 150,000 hectares in Coahuila State,
Mexico. The land holdings contain numerous historical direct-ship
ore workings and significant underground development, but no
drill-testing has ever been carried out on them.
On Behalf of the Board of Directors,
Taj Singh, M.Eng, P.Eng, CPA President, CEO,
and Director
For Further Information contact:
Forbes Gemmell, CFAVP Corporate Development & Investor
Relationsforbes.gemmell@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 does not constitute an offer
to sell or a solicitation of an offer to buy nor shall there be any
sale of any of the securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful, including any of the
securities in the United States of America. The securities have not
been and will not be registered under the United States Securities
Act of 1933, as amended (the “1933 Act”) or any state securities
laws and may not be offered or sold within the United States or to,
or for account or benefit of, U.S. Persons (as defined in
Regulation S under the 1933 Act) unless registered under the 1933
Act and applicable state securities laws, or an exemption from such
registration requirements is available.
Cautionary Note Regarding
Forward-Looking Statements
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 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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