South Atlantic increases financing to $4.2-million

Executive Summary

• South Atlantic Gold Inc. has increased the size of its non-brokered private placement offering, raising gross proceeds to up to $4.2 million.
• The offering consists of up to 84 million common shares priced at $0.05 per share, with proceeds designated for the advancement of the Pedra Branca project in Brazil and general corporate purposes.
• The company is simultaneously settling $500,000 of debt owed to a non-arm's-length party by issuing 10 million shares at $0.05 per share, a transaction subject to TSX Venture Exchange approval.

Key Details

• Private Placement Structure:
  • Type: Non-brokered private placement.
  • Gross Proceeds: Increased to up to $4.2 million.
  • Shares Issued: Up to 84 million common shares.
  • Price Per Share: $0.05.
• Finder’s Fees:
  • Cash fee: 6% on externally sourced funds.
  • Warrant fee: 6% finder warrants.
  • Warrant Terms: Each warrant entitles the holder to acquire one additional common share at an exercise price of $0.06 for a period of 24 months from closing.
• Use of Proceeds:
  • Advancing the Pedra Branca project in Brazil.
  • General corporate purposes.
• Debt Settlement:
  • Amount Settled: $500,000 of debt owed in connection with a loan and unsecured promissory note agreement.
  • Counterparty: Non-arm's-length party (related party).
  • Consideration: Issuance of 10 million shares.
  • Deemed Price: $0.05 per share.
  • Purpose: To preserve cash for working capital.
  • Status: Subject to approval from the TSX Venture Exchange.
• Regulatory and Legal Details:
  • Insider Participation: Insiders, including certain directors, may participate; this is a related party transaction exempt from minority approval, information circular, and formal valuation requirements under MI 61-101 (sections 5.5(a) and 5.7(1)(a)) as the value does not exceed 25% of market capitalization.
  • Exchange Approval: The offering remains subject to approval by the TSX Venture Exchange.
  • Hold Period: Securities issued under both the private placement and the debt settlement are subject to a four-month-and-one-day statutory hold period under Canadian securities laws.