August 6, 2020
GoviEx Announces Non-Brokered $5M Private Placement
Completes $4.7M First Tranche Closing Supported by Lead Institutional Investor
Financing is Fully Subscribed
Not for distribution to United States newswire services or for dissemination in the United States
VANCOUVER, CANADA –GoviEx Uranium Inc. (TSX-V: GXU; OTCQB: GVXXF) (“GoviEx” or “Company”) is pleased to announce that it is closing the first tranche of a fully subscribed non-brokered private placement offering of up to 35,714,286 units (“Units”) at a price of C$0.14per Unit (the “Private Placement”) for gross proceeds of approximately C$5Million.
“The U308 spot price is up over 30% from the beginningof this year and weare delighted by the strong support received from our lead institutional investor as well as other long-term shareholders seeking exposure to our quality pipeline of mineral projects,” stated Govind Friedland, GoviEx Executive Chairman.
“We believe we are at a key turning point in the uranium market, and with this equity raise and support from a number of astute institutions, including a single lead investor taking the majority of the placement, the Company will be well funded to achieve our corporate objectives for the year. The first half of 2020 has brought with it major challengesand GoviEx has responded to themwell. Despite the various COVID-19restrictions around the globe the Company continues to advance its projects.
The global demand for uranium has remained strong. New reactor construction is ongoing, and COVID-19related supply restrictions on top of existing production constraint from the major producers has put pressure on the uranium spot price to the upside.
Accordingly, the updated pre-feasibility study for the Madaouela project in Niger (the “Madaouela Project”) continues to be advanced with the team focusing improvements to the planned operations and process design to potentially reduce capital and operating expenses and improve resulting project economics from those previously reported in the current pre-feasibility study on the Madaouela Project (1), thereby improving the potential bankability of our flagship fully permitted Madaouela Project. Although COVID-19 has slightly impacted the timing for completion of the study, we remain confident to be able to announce results later this year,” said Mr Friedland.
Falea Uranium-Silver-CopperProject update
As announced on July 6, 2020, a recent gold geochemical sampling program on the Company’s Falea and Madini exploration licenses forming part of the Falea (Uranium-Silver-Copper) project in Mali (the “Falea Project”) highlighted significant gold in soils anomalies that show the potential extensions of the Sirabaya West and the Siribaya-Bambadinka gold
trends through, and potentially intersecting within, the Falea Project. We believethese preliminary results,when combined with the known uranium-silver-copper mineralisation of the Falea Project mineral resources(2),has significantly raised the exploration potential of these licenses.Asignificant portion of this current financingis anticipated to be allocated to testing this precious metal potential.
The Private Placement
Each Unit consist of one (1) Class A common share in the capital of the Company(a “Common Share”) one (1) transferable share purchase warrant (a “Warrant”). Each Warrant will entitle the holder to acquire one (1) Common Share (a “Warrant Share”) for a period of 60 months from the date of issueat an exercise price equal to the US$ equivalent of C$0.20.
All securities issued under this Private Placement are subject to the customary four-month hold period. In addition, securities issued to subscribers in the United States are subject to a hold period under the United States Securities Act of 1933, as amended (the “1933 Act”) and can only be resold in strict compliance with the applicable exemptions from the registration requirements of the 1933 Act.
The net proceeds from the Private Placement will be used to fund continued exploration and development activities on GoviEx’s Madaouela, Mutanga and Falea projects and for general working capital purposes.
In connection with the Private Placement, the Company will pay arm’s length finders an aggregate cash commission of 6% of the gross proceeds raised under the Private Placement from subscriptions sourced by finders and will issue that number of non-transferable finder’s warrants (equal to 6.0% of the number of Units sold under the Private Placement to subscribers sourced by finders) to acquire Common Shares(“Finder’s Warrants”). Each Finder’s Warrant will be exercisable for one (1) Common Share (a “Finder’s Warrant Share”) at a price of C$0.14 per Finder’s Warrant Share.
Closing of First Tranche of Private Placement
The Company is also pleased to announce that it has closed the first tranche of the Private Placement. In this first tranche, the Company issued an aggregate 33,664,286Units for gross proceeds of approximately C$4.7Million. Warrants issued pursuant to the first tranche closing are exercisable at a price of US$0.15per Warrant Share until August6,2025, subject to applicable adjustments.
GoviEx insiders subscribed for a total of185,715 Units. The placement to insiders constitutes a “related party transaction”within the meaning of Exchange Policy 5.9 and Multilateral Instrument 61‑101 -Protection of Minority Security Holders in Special Transactions (“MI 61‑101”). The Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61‑101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61‑101 in respect of related party participation in the placement as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involved the related parties, exceeded 25% of the Company’s market capitalization (as determined under MI 61-101).
In connection with the first tranche close of the Private Placement,the finder, Red Cloud Securities Inc. (“Red Cloud”), will receive a cash commission of C$209,460 and Finder’s Warrants exercisable until August 6, 2025, to acquire an aggregate 1,496,142Finder’s Warrant Shares at price of C$0.14 per Finder’s Warrant Share.
All securities issued under the first tranche close of the Private Placement are subject to a hold period and may not be traded before December 7, 2020.
The final tranche of the Private Placement is expected to close on or before August 13, 2020.The Private Placement remains subject to the final TSX Venture Exchange acceptance.
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