DFR Gold Inc. Announces US$1.7 million Unsecured Convertible Debenture Offering
Vancouver, B.C. (April 6, 2023) – DFR Gold Inc. (TSX‐V:DFR) (“DFR” or the “Company”) is pleased to announce a private placement of unsecured convertible debentures (“Debentures”) of the Company for total gross proceeds in an aggregate amount of US$1,705,750. The Debentures were issued to certain insiders and management of the Company (the “Debenture Offering”).
Debenture Offering
The Debentures will mature on 29 February 2024 (the “Maturity Date”), unless converted earlier in accordance with their terms. The Debentures bear interest at a rate of 12.5% per annum, which is payable on the Maturity Date, unless the Debentures are converted earlier, in which case the interest payable will be equal to the amount of interest that would have been payable under the Debentures if the conversion had occurred on the Maturity Date.
The Debentures are automatically convertible into common shares of the Company (“Common Shares”) on the earlier of: (i) the Maturity Date, and (ii) the completion by the Company of an equity raise in an aggregate amount of at least US$2 million (an “Equity Raise”). If converted pursuant to an Equity Raise, the principal will be converted at the higher of: (i) the closing price of the Common Shares on the TSX Venture Exchange (the “TSX‐V”) on April 5, 2023, being the date before the Debentures were issued (the “Minimum Permitted Price”), and (ii) the subscription price per Common Share in the Equity Raise (such higher price, the “Equity Raise Principal Conversion Price”), and interest will be converted at the higher of: (i) the Equity Raise Principal Conversion Price, and (ii) the closing price of the Common Shares on the date immediately preceding such conversion. The Debentures (and the underlying Common Shares) are subject to a statutory hold period in Canada, which will expire on August 7, 2023, being the date that is four months and one day from the date of issuance.
If no Equity Raise occurs prior to the Maturity Date, the principal will be converted at the higher of: (i) the Minimum Permitted Price, and (ii) the volume weighted average price of the Common Shares on the TSX‐V for the 30 days prior to the Maturity Date (such higher price, the “Maturity Date Principal Conversion Price”) and interest will be converted at the higher of: (i) the Maturity Date Principal Conversion Price, and (ii) the closing price of the Common Shares on the TSX‐V on the date immediately preceding the Maturity Date.
The Company intends to use the proceeds of the Debenture Offering for drilling purposes and working capital. The closing of the Debenture Offering is subject to customary conditions, including the approval of the TSX‐V.
The Debentures were issued to Brian Kiernan, the Chairman and a director of the Company, Spirit Resources SARL (“Spirit”), an entity controlled by Jean‐Raymond Boulle, John McGloin, CEO and a director of the Company, Jean Lindberg Charles, CFO of the Company, and Kieran Harrington, VP Exploration of the Company. Each of Mr. Kiernan and Mr. Boulle (through Spirit) holds in excess of 10% of the Common Shares of the Company.
Pursuant to Multilateral Instrument 61‐101 ‐ Protection of Minority Security Holders in Special Transactions ("MI 61‐101"), the participation by Mr. Kiernan, Mr. Boulle, Mr. McGloin, Mr. Charles and Mr. Harrington in the Debenture Offering constitutes a “related party transaction” as each of them is a related party of the Company. The Company is relying on an exemption from the formal valuation and minority shareholder approval requirements of MI 61‐101 pursuant to exemptions contained in sections 5.5(b) and 5.7(a) of MI 61‐101 on the basis that at the time of the Debenture Offering, the Company is not listed on any of the proscribed markets listed in section 5.5(b) of MI 61‐101 and neither the fair market value of the securities to be distributed in the Debenture Offering nor the consideration to be received for those securities, insofar as the Debenture Offering involved a related party, exceeds 25% of the Company's market capitalization.
Ends
DFR GOLD INC.
Join McGloin, CEO Contact: [email protected] Michael Oke/Andy Mills: +44 20 7321 0000 Aura Financial LLP: www.aura‐financial.com
Notes to Editors:
DFR Gold is a TSX Venture Exchange listed exploration and mine development company focused on gold in West Africa. DFR Gold holds interests in a portfolio of West African gold exploration projects including the highly prospective Cascades gold project (“Cascades”) in Burkina Faso. Cascades has a Mineral Resource* prepared in accordance with NI 43‐101 comprising 5.41 million tonnes of indicated resources at an average grade of 1.52 g/t Au for a total 264,000 ounces of gold: and 6.93 million tonnes of inferred resources at an average grade 1.67 g/t Au for a total of 371,000 ounces of gold. Please see the Company’s technical report titled “Amended and Re‐stated Technical Report on the Labola Project Burkina Faso” dated April 2, 2022, with an effective date of April 20, 2022 for further information regarding Cascades. This report can be located at www.dfrgold.com.
In Madagascar, DFR Gold has an advanced high grade hard rock zircon exploration prospect located in the west of the country, approximately 220km east of the port of Maintirano and close to a state road. DFR Gold acquired Beravina from Pala Investments and Austral Resources in 2016.
Website: Error! Hyperlink reference not valid.www.dfrgold.com
The Company’s public documents may be accessed at www.sedar.com
Neither the TSXV 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.
Additional Mineral Resource Estimate Disclosures
1. *Mineral Resources, which are not Mineral Reserves, do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, marketing, or other relevant issues. The Mineral Resources in this note were reported using CIM (2014) Standards on Mineral Resources and Reserves, Definitions and Guidelines and adopted by CIM Council.
2. The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define this Inferred Resource as an Indicated or Measured Mineral Resource. It is uncertain if further exploration will result in upgrading the Inferred Resource to an Indicated or Measured Mineral Resource category.
3. The Mineral Resource has been constrained by an open pit evaluation using a gold price of US$1900 per ounce, and then reported at a cut‐off of 0.5 g/t Au.
4. Contained metal and tonnes figures in totals may differ due to rounding.
Forward‐Looking Statements:
This release contains certain “forward‐looking information” within the meaning of applicable Canadian securities legislation. All statements other than statements of historical fact in this release that address activities, events or developments that DFR Gold expects or anticipates will or may occur in the future are forward‐looking statements or information. Forward‐looking statements in this news release include statements regarding the Debenture Offering and the completion thereof; and the intended use of proceeds of the Debenture Offering. Often, but not always, forward‐ looking information can be identified by the use of words such as “aim”, “aspire”, “strive”, “will”, “expect”, “intend”, “plan”, “believe” or similar expressions as they relate to DFR Gold. Forward‐ looking information is subject to a variety of risks and uncertainties which could cause actual events or results to materially differ from those reflected in the forward‐looking information.
There are a number of important factors that could cause DFR Gold’s actual results to differ materially from those indicated or implied by forward‐looking statements and information. Such factors include, among others: the ability to obtain requisite regulatory approvals; the ability to finance the drilling campaign; commodity prices; the gold exploration and mining industry in general; the potential impact of the announcement on relationships; including with regulatory bodies, employees; suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; and compliance with extensive government regulation. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward‐looking information or statement prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
DFR Gold cautions that the foregoing list of material factors is not exhaustive. When relying on DFR Gold’s forward‐ looking statements and information to make decisions, shareholders should carefully consider the foregoing factors and other uncertainties and potential events. DFR Gold has assumed that the material factors referred to in the previous paragraph will not cause such forward looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. The forward‐looking information contained in this release represents the expectations of DFR Gold as of the date of this release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward looking information and should not rely upon this information as of any other date. While DFR Gold may elect to, it does not undertake to update this information at any particular time except as required in accordance with applicable laws.