- NevGold Corp. (TSXV:NAU) has closed the option to acquire the Nutmeg Mountain Gold Project and a C$1 million strategic investment by GoldMining Inc. (TSXV:GOLD)
- With the current treasury and $1 million in financing, the company can continue advancing its projects
- NevGold received approval from the TSX Venture Exchange for the option and the initial investment from GoldMining of 1.48 million NevGold shares at $0.0675 per share
- The option is expected to close on November 5, 2022
- Shares of NevGold are unchanged, trading at $0.56 per share
NevGold Corp. (NAU) has closed the option to acquire the Nutmeg Mountain Gold Project.
The company also announced a C$1 million investment from GoldMining Inc. (TSXV:GOLD).
Terms of the agreement include the following:
- In consideration for the grant of the option, NevGold issued 4,444,444 common shares to GoldMining at a price of $0.675 per share, representing C$3 million of value based on the 30-day volume-weighted average price of NevGold shares. GoldMining becomes a strategic investor of NevGold with a 10.5 per cent interest;
- GoldMining made an initial investment of C$1 million, subscribing for 1,481,481 NevGold shares at a price of $0.675 per share, and has committed to a further lead order of up to C$1.25 million in a future financing by NevGold;
- In order to exercise the option, NevGold will pay the following amounts or issue shares to GoldMining on the following schedule:
- January 1, 2023: C$1.5 million
- July 1, 2023: C$1.5 million
- January 1, 2024: C$3.0 million
- In order to exercise the option, NevGold will also be required to make qualifying expenditures on the project totalling C$2.25 million:
- $1.5 million on or before June 1, 2023
- $0.75 million on or before December 31, 2023
- On completion of C$9.0 million in equity issuances and/or payments to GoldMining and total C$2.25 million in qualifying expenditures by January 1, 2024, NevGold will own 100 per cent of the Nutmeg Mountain Gold Project
- NevGold has committed to a schedule of future success-based contingent payments totalling C$7.5 million to GoldMining, payable in cash or shares at the election of NevGold:
- C$0.5 million on completion of a Preliminary Economic Assessment (PEA) on the Project
- C$2.5 million on completion of a Preliminary Feasibility Study (PFS) on the Project
- C$4.5 million on completion of a Feasibility Study (FS) on the Project
- NevGold has entered into an Investor Rights Agreement with GoldMining with customary rights including pre-emptive equity participation rights and a right to appoint a Board member
“NevGold is very pleased to close the option agreement on Nutmeg Mountain and the C$1M first tranche of financing with GoldMining. With current treasury and the C$1M financing we are funded to continue to advance our projects. We also have a further C$1.25M lead order from GoldMining in a future financing which gives us flexibility over the coming months. We are expecting more assays out of Nevada imminently, so it is shaping up to be an extremely busy 2nd half of 2022,” Brandon Bonifacio, CEO of NevGold, said in a press release. “We welcome GoldMining as a new strategic partner and investor, and we look forward to the next chapter of NevGold with a larger scale platform and significant valuation re-rate potential.”
NevGold received approval from the TSX Venture Exchange to the option as well as the initial investment from GoldMining of 1.48 million NevGold shares at $0.675. According to the release, the option is expected to close by November 5, 2022.
Shares of NevGold are unchanged, trading at $0.56 per share.