Gold79 Closes Second Tranche of Upsized Private Placement for Gross Proceeds of $5.5 Million

Mining
Monday, November 18th, 2024 3:51 pm EDT

Ottawa, Ontario–(Newsfile Corp. – November 18, 2024) – Gold79 Mines Ltd. (TSXV: AUU) (OTCQB: AUSVF) (“Gold79” or the “Company”) is pleased to announce the closing of a second tranche of its previously announced $6,000,000 non-brokered private placement financing (the “Offering”), raising gross proceeds in the first and second tranche of $5,500,000 through the issuance of 22,000,002 units at $0.25 per unit.

“This financing has been an excellent opportunity for key investors to acquire meaningful positions as we resume drilling at Gold Chain and advance the project towards a maiden resource,” stated Quentin Mai, President of Gold79. “Significantly, this raise exceeds the minimum financing condition for the amalgamation with Bullet Exploration, which, if completed, will provide the foundation for the next chapter of development and growth for the Company.“

Gross proceeds from the second tranche were $3,310,000 through the issuance of 13,240,002 units at $0.25 per unit. Each unit consists of one common share of the Company and one-half common share purchase warrant. A total of 6,620,002 whole warrants were issued in the second tranche, with each warrant entitling the holder to purchase one common share of the Company at a price of $0.40 per share until November 15, 2026. A total of 4,380,000 warrants were issued in the first tranche. The warrants are callable, at the option of the Company, in the event that the 20-day volume-weighted average price of the Company’s common share meets or exceeds $0.60 for ten consecutive trading days based on trades on the TSX Venture Exchange (“TSX-V”) and Alternative Trading Systems. Subscribers will be notified of the call provision being triggered and will have a 30-day period to exercise the warrants.

The warrants contain provisions that prohibit the exercise by the holder, together with its affiliates, which would result in the holder, together with its affiliate, beneficially owning in excess of 9.99% of the issued and outstanding common shares of the Company immediately after giving effect to such exercise of the warrant.

In connection with the second tranche closing of the Offering, cash finder’s fees of $19,513 were paid, and 78,050 finder warrants were issued. The finder warrants are exercisable at $0.40 per share and expire November 15, 2026.

This Offering is subject to the final approval of the TSX-V. All securities issued in the second tranche of the placement are subject to a statutory hold period until March 16, 2025. It is expected that the third and final tranche of the Offering would be closed later this month.

Officers and a director of the Company participated in the second tranche of the Offering and acquired 200,000 units for $50,000. The participation of these insiders in the second tranche of the Offering constitutes a Related Party Transaction within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The board of directors of the Company, with participating directors abstaining, determined that the transaction is exempt from the formal valuation and minority shareholder approval requirements contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 for the related party transaction, as neither the fair market value of securities issued to the insiders nor the consideration paid by the insiders exceeded 25 percent of the Company’s market capitalization. The Company did not file a material change report with respect to the transaction 21 days in advance of the closing of the private placement because insider participation had not been confirmed. The shorter period was necessary in order to permit the Company to close the private placement in a timeframe consistent with usual market practice for transactions of this nature.

Proceeds raised in the placement will be used for exploration expenditures related to the Gold Chain, Arizona, project; property claim costs and contractual property payments; costs associated with the transaction with Bullet Exploration Inc. (“Bullet”), assuming the closing of the transaction with Bullet, exploration expenditures related to the Jefferson North, Nevada project; and, for working capital and general corporate purposes.

The securities issued in the private placement will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons, except in certain transactions exempt from the registration requirements of the U.S. Securities Act. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, securities of the Company in the United States.

Extension of the Offering
Gold79 announces that it is extending the final closing date of its Offering to allow for a third tranche closing. The closing date of the third tranche of the Offering will now be on or before December 16, 2024. All other terms of the Offering remain unchanged.

Amendment to Amalgamation Agreement
Gold79 announces that it has amended the terms (“Amendment No. 2”) of its previously announced amalgamation agreement, as amended by Amendment No. 1 (together, the “Amalgamation Agreement”) with Bullet Exploration Inc. (TSX-V: AMMO) and Gold79’s wholly-owned subsidiary pursuant to which Gold79 would acquire all of the issued and outstanding shares of Bullet (the “Transaction”). Pursuant to Amendment No. 2 to the Amalgamation Agreement, the form of the amalgamation application attached as Schedule A to the amalgamation agreement has been updated to include all of the information that is required to be included in the amalgamation application that will be filed with the registrar in accordance with the provisions of the Business Corporations Act (British Columbia).

Completion of the Transaction is subject to a number of conditions, including but not limited to TSX-V acceptance and the requisite Bullet shareholder approval. The Transaction cannot close until the required Bullet shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Early Warning Report
Derek Macpherson of Toronto, Ontario, acquired 20,000 units in the second tranche of the private placement at a price of $0.25 per unit for an aggregate purchase price of $5,000. Each unit consists of one common share and one-half common share purchase warrant of the Company. Each warrant is exercisable for $0.40 per share until their expiry on November 15, 2026. As noted above, all securities issued pursuant to the placement are subject to a statutory hold period which expires March 16, 2025.

Immediately prior to the private placement, Mr. Macpherson and joint actors Kanaga Capital Corp. and Olive Resource Capital Inc. owned 1,965,400 common shares of the Company, representing 6.3% of the then-issued and outstanding common shares of the Company. As a result of the second tranche closing of the private placement, Mr. Macpherson’s and joint actors’ ownership of the issued and outstanding common shares of the Company decreased from 6.3% to 4.5% on an undiluted basis. In addition, if Mr. Macpherson and joint actors were to exercise all of their warrants and stock options of the Company, they would own 3,404,150 common shares of the Company, representing 7.4% of the issued and outstanding common shares of the Company on a partially diluted basis, assuming no further common shares of the Company have been issued. This brings Mr. Macpherson and joint actors holdings to under 10% on a partially diluted basis. As a result, Mr. Macpherson and joint actors ceased to be insiders of Gold79 relating to their shareholdings. Mr. Macpherson remains an insider due to his roles as Executive Chairman, CEO and Director of the Company.

Mr. Macpherson acquired the securities for investment purposes. Mr. Macpherson may, depending on market and other conditions, increase or decrease his beneficial ownership of the Company’s securities, whether in the open market, by privately negotiated agreements or otherwise, subject to a number of factors, including general market conditions and other available investment and business opportunities.

The disclosure respecting Mr. Macpherson’s shareholdings contained in this press release is made pursuant to National Instrument 62-103 and a copy of the report in respect of the above acquisition will be filed with applicable securities commissions using the Canadian System for Electronic Document Analysis and Retrieval (SEDAR+) and will be available on Gold79’s SEDAR+ profile (www.sedarplus.ca). A copy may be obtained by contacting Gold79 as noted under “Contact” below.

About Gold79 Mines Ltd.

Gold79 Mines Ltd. is a TSX-V listed company focused on building ounces in the Southwest USA. Gold79 has four gold projects, two of which are partnered with major gold producers (Kinross at Jefferson Canyon and Agnico at Greyhound). Gold79 is focused on establishing a maiden resource at its Gold Chain project in Arizona and advancing its Tip Top Project in Nevada.

For further information regarding this press release, contact:
Quentin Mai, President, Gold79
Phone: 604-638-5622
Email: quentin@gold79mines.com

Or

Derek Macpherson, Executive Chairman and CEO, Gold79
Phone: 416-294-6713
Email: dm@gold79mines.com

Or

Investor Relations
Kin Communications Inc.
604-684-6730
Auu@kincommunications.com

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FORWARD-LOOKING STATEMENTS:

This press release may contain forward looking statements that are made as of the date hereof and are based on current expectations, forecasts and assumptions which involve risks and uncertainties associated with our business including the proposed Transaction, any future tranches of the current private placement or future private placements, the uncertainty as to whether further exploration will result in the target(s) being delineated as a mineral resource, capital expenditures, operating costs, mineral resources, recovery rates, grades and prices, estimated goals, expansion and growth of the business and operations, plans and references to the Company’s future successes with its business and the economic environment in which the business operates. All such statements are made pursuant to the ‘safe harbour’ provisions of, and are intended to be forward-looking statements under, applicable Canadian securities legislation. Any statements contained herein that are statements of historical facts may be deemed to be forward-looking statements. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. We caution readers of this news release not to place undue reliance on our forward-looking statements as a number of factors could cause actual results or conditions to differ materially from current expectations. Please refer to the risks set forth in the Company’s most recent annual MD&A and the Company’s continuous disclosure documents, which can be found on SEDAR at www.sedarplus.ca. Gold79 does not intend, and disclaims any obligation, except as required by law, to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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