TORONTO--(BUSINESS WIRE)--Atlanta Gold Inc. (TSXV: ATG; OTC Pink: ATLDF) announces that it has reached agreements to issue a total of 26,390,000 common shares for aggregate consideration of C$2,375,100 to Jipangu Inc. (“Jipangu”). Under the terms of the agreements, Jipangu’s existing US$750,000 loan to the Company together with accrued interest thereon to the date of closing of the transaction, will be repaid by the issuance of 11,486,052 common shares of the Company valued at C$0.09 per share. In addition, Jipangu has agreed to subscribe for 14,903,948 common shares at a price of C$0.09 per share. Under the terms of the agreements, Jipangu will have the right to nominate up to one-half of the Company’s board of directors for so long as Jipangu beneficially owns not less than 50% of the Company’s outstanding shares. Jipangu will also have the right to participate pro rata in future financings by the Company, for so long as Jipangu beneficially owns not less than 40% of the Company’s then outstanding shares.
Completion of the transactions with Jipangu is subject to the approval of the TSX Venture Exchange and the approval of the Company’s shareholders (excluding the votes of shares currently owned by Jipangu). Approval of the Company’s shareholders will be sought at the Company’s annual and special meeting of shareholders, currently anticipated to be held in the beginning of June 2017. Completion of the transactions is subject to customary closing conditions and to the approval of the Company’s noteholders and debentureholders. The proceeds of the financing will not be accessible to the Company until following the shareholders’ meeting. Jipangu currently owns 19.5% of the Company’s outstanding shares and upon completion of the transactions, will own 52.2% of the then outstanding shares.
Net proceeds from the financing will be used for general working capital purposes and to pay down the default interest on the Company’s senior secured notes and debentures.
All of the common shares issuable on the financing transactions will be subject to a four-month statutory hold period from the date of issuance.
About the Company
Atlanta Gold Inc. holds through its 100% owned subsidiary, Atlanta Gold Corporation (“AGC”), leases, options or ownership interests in its Atlanta properties which comprise approximately 2,159 acres (8.74 square kilometres) located 90 air kilometers east of Boise, in Elmore County, Idaho. A long history of mining makes Atlanta very suitable for development of new mining projects. The Company is focused on advancing its core asset, Atlanta, towards mine development and production.
This news release contains forward-looking information and forward-looking statements (collectively “forward-looking statements”) within the meaning of applicable securities laws with respect to the issuance of shares to Jipangu and the use of proceeds therefrom. Such forward-looking statements are based upon various assumptions and other factors that management believes to be reasonable, including that the Company will receive the requisite approvals of the Exchange, its noteholders, debentureholders and its shareholders and will enter into definitive documentation and complete the transaction in a timely manner. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied by the forward-looking statements. Risks and uncertainties that may cause actual results to vary include the receipt of requisite approvals from the Exchange, the noteholders, debentureholders and shareholders on a timely basis and on terms acceptable to the Company; fluctuations in the gold price and currency exchange rates; changes in general economic conditions and in the financial markets; as well as other risks and uncertainties which are more fully described in the Company’s annual and interim management’s discussion and analysis and other filings by the Company with the securities regulatory authorities, which are available under the Company’s profile at www.sedar.com. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied by the forward-looking statements and accordingly, readers should not place undue reliance on the forward-looking statements. Readers are cautioned that the foregoing lists of risks, uncertainties, assumptions and other factors are not exhaustive. The forward-looking statements contained herein are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements contained herein or in any other documents filed with securities regulatory authorities, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.
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