/NOT FOR DISTRIBUTION TO UNITED
STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES./
VANCOUVER, BC, Aug. 25, 2020 /CNW/ - Kootenay Silver Inc.
("Kootenay" or the "Company") (TSXV: KTN), is pleased
to announce that it has closed its previously announced private
placement of units of securities of the Company ("Units")
pursuant to which the Company issued 17,500,000 Units at a price of
$0.40 per Unit (the "Offering
Price") for aggregate gross proceeds of approximately
$7,000,000 (the "Offering").
The Offering was led by Mackie Research Capital Corporation, as
lead agent and sole bookrunner, on behalf of a syndicate which also
included PI Financial Corp. (together, the "Agents").
Eric Sprott, through 21764123
Ontario Ltd., participated in the Offering to maintain his
proportionate equity interest in the Company by acquiring 2,500,000
Units.
Each Unit is comprised of one common share of the Company (a
"Common Share") and one-half of one Common Share purchase
warrant (each whole warrant, a "Warrant"). Each Warrant is
exercisable to acquire one Common Share at a price of $0.55 per share until August 25, 2022. The securities issued under the
Offering are subject to the four month hold period prescribed under
Canadian securities laws expiring on December 26, 2020.
The Company intends to use the net proceeds from the Offering
for exploration and development activities, working capital
requirements and other general corporate purposes.
In connection with the Offering, the Agents received an
aggregate cash fee equal to 6.0% of the gross proceeds from the
Offering (other than in respect of certain subscribers on which a
cash fee equal to 3.0% was paid). In addition, the Company issued
to the Agents 1,050,000 non-transferable broker warrants (the
"Broker Warrants"). Each Broker Warrant entitles the holder
to purchase one Unit at an exercise price equal to the Offering
Price until August 25, 2022. The
Offering is subject to the final acceptance of the TSX Venture
Exchange (the "Exchange").
The securities described herein have not been, and will not be,
registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act"), or any state securities
laws, and accordingly, may not be offered or sold within
the United States except in
compliance with the registration requirements of the U.S.
Securities Act and applicable state securities requirements or
pursuant to exemptions therefrom. This press release does not
constitute an offer to sell or a solicitation to buy any securities
in any jurisdiction.
Mr. Sprott is an insider of the Company and, as such, his
participation in the Offering is a related party transaction under
the policies of the Exchange and Multilateral Instrument 61-101
Protection of Minority Security Holders in Special
Transactions ("MI 61-101"). The Company is relying
on exemptions for the minority shareholder approval and formal
valuation requirements applicable to related party transactions
under sections 5.5(a) and 5.7(1)(a) of MI 61-101, as neither the
fair market value of the Units beneficially purchase by him nor the
price paid for such Units exceeds 25% of the Company's market
capitalization. The Company did not file a material change
report in respect of this related party transaction at least 21
days before closing as a result of the customary timing for closing
such financings.
About Kootenay Silver Inc.
Kootenay Silver Inc. is an
exploration company actively engaged in the discovery and
development of mineral projects in the Sierra Madre Region of
Mexico and in British Columbia, Canada. Supported by one of
the largest junior portfolios of silver assets in Mexico, Kootenay continues to provide its
shareholders with significant leverage to silver prices. The
Company remains focused on the expansion of its current silver
resources, new discoveries and the near-term economic development
of its priority silver projects located in prolific mining
districts in Sonora, State and
Chihuahua, State, Mexico,
respectively.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
Certain statements in this news release, referred to herein as
"forward-looking statements", constitute "forward-looking
statements" under the provisions of Canadian provincial securities
laws. These statements can be identified by the use of words such
as "expected", "may", "will" or similar terms.
Forward-looking statements in this press release include, but are
not restricted to, statements regarding the intended use of
proceeds of the Offering and receipt of regulatory approvals
required for completion of the Offering.
Forward-looking statements are necessarily based upon a number
of factors and assumptions that, while considered reasonable by
Kootenay as of the date of such statements, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. Many factors, known and unknown, could cause
actual results to be materially different from those expressed or
implied by such forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date made. Except as
otherwise required by law, Kootenay expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any such statements to reflect any change in
Kootenay's expectations or any change in events, conditions or
circumstances on which any such statement is based.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of the contents
of this news release.
SOURCE Kootenay Silver Inc.