Northern Shield completes $1-million placement

Executive Summary

• Northern Shield Resources Inc. has closed a strategic non-brokered private placement with Labrador Gold Corp. (TSX Venture Exchange: LAB), issuing 16,666,667 subscription receipts for aggregate gross proceeds of $1 million.
• The funds are held in escrow and will only be released to Northern Shield upon the receipt of Labrador Gold shareholder and regulatory approval for LabGold's change of business.
• Upon release, each subscription receipt converts into one unit (one common share and one warrant). LabGold retains pre-emptive financing rights and the right to appoint a technical adviser as long as it holds a 10% equity interest.

Key Details

• Transaction Structure: Non-brokered private placement of subscription receipts.
• Counterparty: Labrador Gold Corp. (TSX Venture Exchange: LAB).
• Quantity Issued: 16,666,667 subscription receipts.
• Price: $0.06 per subscription receipt.
• Gross Proceeds: $1,000,000.
• Escrow Terms: Funds held in escrow; release conditional on LabGold shareholder and regulatory approval for LabGold's change of business.
• Conversion Terms: Each subscription receipt entitles LabGold to receive one unit (one common share + one common share purchase warrant) upon satisfaction of escrow release conditions.
• Warrant Terms: Each warrant allows purchase of one additional common share at $0.10 per share for a period of 36 months from the escrow release date.
• Lock-up Agreement: Voluntary lockup prohibiting trading of common shares, warrants, or warrant shares for four months from the escrow release date.
• Statutory Hold: Four months and one-day statutory hold period on all securities issued.
• Finder's Fees: None paid in cash or securities.
• Use of Proceeds: Further exploration programs (including diamond drilling) at the Root & Cellar property and general working capital.
• Additional Rights for LabGold (while holding ≥10% equity):
  • Pre-emptive right to participate in future financings to maintain equity interest.
  • Right to appoint a technical adviser to guide exploration activities on the company's properties.
• Cancellation/Refund Clause: If escrow release conditions are not satisfied or waived within 120 days of the closing date, subscription receipts are cancelled, and escrow funds (plus interest) are returned to LabGold, less $20,000 reimbursed to Northern Shield for reasonable expenses.

Notable Quotes

• None provided in the text.