TORONTO, Dec. 30, 2020 (GLOBE NEWSWIRE) — Stone Gold Inc. (TSX-V: STG) (“Stone Gold” or the “Company“) is pleased to announce that it has completed a non-brokered private placement, previously announced on December 16, 2020, for aggregate gross proceeds of $500,000 (the “Offering”). The Offering consisted of the sale of 2,500,000 flow through units (the “FT Units”) at a price of $0.20 per FT Unit.
Each FT Unit consists of one (1) common share of the Company issued on a flow-through basis within the meaning of the Income Tax Act (Canada) (a “FT Share”), and one-half of one (0.5) common share purchase warrant (each whole warrant, a “Warrant”), with each Warrant entitling the holder thereof to acquire one additional common share of the Company at a price of $0.30 for a period of twenty-four (24) months following the closing of the Offering.
The proceeds from the issuance of the FT Units will be used for “Canadian exploration expenses” and will qualify as “flow-through mining expenditures” (the “Qualifying Expenditures“), as defined in subsection 127(9) of the Income Tax Act (Canada). The Company intends to renounce the Qualifying Expenditures to subscribers of FT Units for the fiscal year ended December 31, 2020.
In connection with the Offering, eligible finders were paid $23,674 in cash compensation for their assistance with the Offering.
The Offering is subject to receipt of all necessary regulatory approvals, including approval of the TSX Venture Exchange. The securities issued pursuant to the Offering will be subject to a statutory hold period of four months and one day in accordance with applicable securities laws.
Related Party Transaction
In connection with the Offering, Brian Howlett, a Director of the Company, acquired 59,000 FT Units. Mr. Howlett’s participation in the Offering constitutes a “related party transaction” under the Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“). The Company relies on the exemption from the formal valuation requirements of MI 61-101 available on the basis of the securities of the Company not being listed on specified markets, including the Toronto Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the NASDAQ or certain overseas stock exchanges. The Company also relies on the exemption from minority shareholder approval requirements under MI 61-101 on the basis that the fair market value of the anticipated participation in the Offering by Mr. Howlett does not exceed 25% of the market capitalization of the Company.