Allegiant Gold Ltd. (AUAU:TSX.V; AUXXF:OTCQX) recently announced the arrangement of a non-brokered private placement to raise CA$4,415,605. The placement will consist of 12,616,014 shares of Allegiant at a price of CA$0.35 per common share.
In addition, Goldcorp Inc. is making a strategic investment in Allegiant to purchase 5,923,819 Allegiant common shares at CAN $0.35/share for gross proceeds of CA$2,073,337. After this investment is completed, Goldcorp will own 9.99% of the issued and outstanding common shares of Allegiant on a non-diluted basis.
Proceeds from this transaction will be used by Allegiant for high-impact "discovery" exploration drill programs on six of Allegiantís high-priority exploration projects, situated primarily in Nevada.
Allegiant noted that it has entered into an investor rights agreement with Goldcorp. If Goldcorp maintains an equity interest of a minimum of 5%, it will have:
- the right to participate in future equity financings to maintain up to a 9.99% interest in Allegiant;
- the right to receive regular updates of technical information on all Allegiant's projects;
- the right of first refusal to match third party offers in connection with proposed transactions on Allegiant's North Brown, Red Hills, Monitor Hills and Hughes Canyon gold projects;
- the right of first refusal on all of Allegiant's projects except Eastside, to match third party offers in connection with non-equity financings such as royalties and streams; and
- the right to appoint 50% of a technical committee with Allegiant with respect to the North Brown, Red Hills, Monitor Hills and Hughes Canyon gold projects.
Closing of the offering is expected to take place in July, and is subject to customary closing conditions, like title opinions and the receipt of applicable regulatory approvals. The approval of the TSX Venture Exchange is one of them. Also, all offering shares will be subject to a hold period of four months.
Allegiant owns 100% of 14 highly prospective drill-ready gold projects in the United States, mostly located in Nevada. The company has its headquarters in Vancouver.
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