Discovery Metals Corp. (TSXV: DSV; OTCQX: DSVMF)
is pleased to announce that it has closed the second and final
tranche of its non-brokered private placement (the “Private
Placement”), consisting of 45,454,545 units (“Units”) at a price of
C$0.55 per Unit for aggregate proceeds of C$25,000,000. 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 (a “Warrant”) exercisable at C$0.77 for a period of two
years after the date of issuance. The second tranche closed on June
8, 2020 and consisted of 14,363,600 Units for aggregate proceeds of
C$7,899,980. Discovery first announced the Private Placement on May
18, 2020 and announced the closing of the first tranche of
C$17,100,020 of the Private Placement on June 1, 2020.
The Company also announces it has received
approval by the Mexican government to resume operations at its
Cordero project with strict COVID-19 health and safety protocols.
The Company is finalizing additional measures, including mandatory
testing of all onsite workers to ensure the safety of its
employees, consultants, contractors and communities. The Company
will begin with one drill rig and will closely monitor the ramp-up
of exploration activities. Further drill rigs will only be added
when the Company is confident that health and safety risks can be
managed effectively.
Taj Singh, President and CEO of Discovery
commented, “With the closing of the financing we now have over $40
million of cash on our balance sheet, putting us in a strong
position as we restart our exploration activities at Cordero. We
look forward to safely resuming operations later this month and
carrying on with the positive momentum we have generated from our
excellent exploration results to date.”
Financing Close
Gross proceeds of the Private Placement,
including the first tranche, totaled C$25,000,000 consisting of the
issuance of 45,454,545 Units. Discovery has paid an aggregate total
in finders’ and advisory fees of C$1,185,001 in cash and issued
804,545 finder warrants with an exercise price of $0.55 and a two
year expiry to certain arms’ length parties who introduced
Discovery to investors, in accordance with the policies of the TSX
Venture Exchange. The securities issued on closing of the Private
Placement are subject to a statutory hold period expiring four
months and one day after their date of issuance.
Mr. Eric Sprott, through 2176423 Ontario Ltd. (a
corporation which is beneficially owned by him), acquired
18,181,800 Units (composed of 18,181,800 Common Shares and
9,090,909 Warrants) in the first tranche of the Private Placement,
for a total investment of C$10,000,000. Prior to the closing of the
Private Placement, Mr. Sprott owned 44,610,111 Common Shares of
Discovery representing 21.1% of the interest of Discovery on a
non-diluted basis. Through the purchase of Common Shares and
Warrants in the Private Placement, and following the second tranche
closing, Mr. Sprott will own approximately 24.4% interest in
Discovery on a non-diluted basis and approximately 27.0% on a
partially diluted basis assuming the exercise of the Warrants owned
by Mr. Sprott.
The Common Shares and Warrants 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.
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.
On Behalf of the Board of Directors,
Taj Singh, M.Eng., P.Eng., CPAPresident, Chief
Executive Officer, and Director
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.
For further information contact:
Forbes Gemmell, CFAVP Corporate
Development & Investor
Relationsforbes.gemmell@dsvmetals.com
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
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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