Labrador Gold invests $1-million in Northern Shield

Executive Summary

• Labrador Gold Corp. has acquired 16,666,667 subscription receipts of Northern Shield Resources Inc. for $1,000,000.02, representing an approximate 10.97% stake in Northern Shield on a non-diluted basis.
• The acquisition is contingent upon shareholder and regulatory approval for Labrador Gold to change its business status from a pure exploration company to an exploration and investment issuer.
• Upon conversion, each subscription receipt becomes one unit (one common share and one warrant), with the warrants exercisable at $0.10 per share for 36 months.

Key Details

• Transaction Structure: Acquisition of 16,666,667 subscription receipts of Northern Shield Resources Inc.
• Purchase Price: $0.06 per subscription receipt.
• Total Investment: $1,000,000.02.
• Escrow Conditions: Funds are held in escrow; release is conditional on LabGold receiving shareholder and regulatory approval to change its business model to allow equity investments.
• Conversion Terms: Each subscription receipt converts into one unit consisting of:
  • One common share of Northern Shield.
  • One common share purchase warrant.
• Warrant Terms:
  • Exercise Price: $0.10 per warrant share.
  • Duration: 36 months from the escrow release date.
• Ownership Stake:
  • Non-diluted basis: ~10.965% of issued and outstanding capital.
  • Partially diluted basis (assuming full warrant exercise): ~19.76%.
• Additional Rights:
  • Pre-emptive Right: LabGold has the right to participate in future financings of Northern Shield to maintain its 10% equity interest.
  • Technical Adviser: LabGold has the right to appoint a technical adviser to guide exploration activities on Northern Shield properties, provided LabGold retains a 10% equity interest.
• Lock-up Agreement: Voluntary lockup for four months from the escrow release date, prohibiting trading of common shares, warrants, or warrant shares.
• Fallback Provision: If shareholder approval for the change of business is not received, the investment funds will be returned to LabGold, less a $20,000 reimbursement to Northern Shield for reasonable expenses.
• Early Warning Disclosure: Filed pursuant to National Instrument 62-103; LabGold states no present intention to increase or decrease holdings but may do so through market transactions or warrant exercises.

Notable Quotes

• None explicitly quoted in the text, though the company states: "The company has advised that the 16,666,667 subscription receipts were acquired for investment purposes and that it has no present intention to either increase or decrease its holdings in Northern Shield."