GoldMining Inc. (the “Company” or “GoldMining”) (TSX: GOLD) (NYSE-American: GLDG) is pleased to announce the closing of the previously announced grant of an option on the Company’s Almaden Project (the “Project”), located in Idaho, U.S.A. to a subsidiary of NevGold Corp. (“NevGold”) and the Company’s strategic investment in NevGold. As consideration for the option, the Company received consideration of C$3.0 million, which was satisfied by NevGold by issuing 4,444,444 common shares of NevGold (“NevGold Shares”).
The Option
Pursuant to the option agreement between the parties (the “Option Agreement”), the Company’s subsidiary has granted NevGold’s subsidiary an option to acquire a 100% interest in the Project. To exercise the option, NevGold must, among other things:
- make a total of C$6 million of additional payments to GoldMining’s subsidiary between January 1, 2023, and January 1, 2024, which payments may be satisfied by NevGold in cash or through the issuance of NevGold Shares, 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 the event that NevGold elects to satisfy any of the foregoing payments by issuing NevGold Shares, the number of such shares will be based upon the volume-weighted average price of the NevGold Shares for the then-applicable 30-trading day period.
- complete qualifying expenditures on the Project aggregating to C$2.25 million, comprised of C$1.5 million on or before June 1, 2023, and a further C$0.75 million on or before December 31, 2023.
Strategic Investment
The Company has completed its initial strategic investment in NevGold by subscribing to 1,481,481 NevGold Shares at a price of C$0.675 per share for total subscription proceeds of C$1.0 million.
In connection with the closing of the initial option grant and the strategic investment, GoldMining and NevGold have entered into an investor rights agreement on customary terms, which provides for, among other things, the grant of certain anti-dilution rights by NevGold to GoldMining and the right to nominate one board member of NevGold, provided the Company maintains an equity interest in NevGold above 4.99%.
Pursuant to the Option Agreement, GoldMining has agreed to purchase additional NevGold equity in an amount to the lesser of C$1.25 million and 40% of the total gross proceeds raised by NevGold in the event NevGold completes a qualifying financing prior to November 30, 2022.
Early Warning Report
Prior to the acquisition of NevGold Shares disclosed herein, the Company did not beneficially own or exercise control and direction of any NevGold Shares. Immediately thereafter, the Company beneficially owned and exercised control and direction of 5,925,925 NevGold Shares, representing approximately 10.53% of the outstanding NevGold Shares, based upon 50,344,287 outstanding NevGold Shares as of July 3, 2022, prior to the issuance of the NevGold Shares to the Company.
The NevGold Shares were acquired by the Company for investment purposes, and in the future, the Company may acquire additional securities of NevGold, dispose of some or all of the existing or additional securities the Company holds or will hold, or may continue to hold its current position, depending on market conditions, reformulation of plans and/or other relevant factors.
