Sego closes $424,600 first tranche of financing

Executive Summary

• Sego Resources Inc. has closed Tranche 1 of its non-brokered private placement, issuing 7,076,665 units for gross proceeds of $424,600.
• The total offering size is $925,600 (15,426,665 units at $0.06/unit); the remaining $501,000 is held back pending receipt of due diligence documentation (personal information forms) and TSX Venture Exchange approval.
• The placement includes warrants exercisable at $0.10/share for three years, with an acceleration clause triggered if the share price exceeds $0.18 for 10 consecutive days after four months and one day.

Key Details

• Tranche 1 Closing:
  • Units Issued: 7,076,665
  • Price Per Unit: $0.06
  • Gross Proceeds: $424,600
  • Status: Funds received by the company; subject to TSX-V approval.
• Remaining Tranche (Tranche 2):
  • Amount Held Back: $501,000
  • Reason for Delay: Pending receipt of due diligence on personal information forms (administrative delay, not a reflection on subscribers).
  • Condition: Closing of final tranche contingent upon receipt of documentation and TSX-V approval.
• Security Structure:
  • Each Unit consists of one common share and one common share purchase warrant.
  • Warrant Exercise Price: $0.10 per share.
  • Warrant Term: Three years from closing.
  • Acceleration Clause: If the closing trading price on TSX-V exceeds $0.18 for 10 consecutive business days (starting 4 months and 1 day after closing), the company may accelerate the expiry to 30 days after notice.
• Insider Participation:
  • Insider: Strashin Developments Ltd. (holding >10% of shares).
  • Amount: 500,000 units.
  • Regulatory Status: Related-party transaction under Multilateral Instrument 61-101; exemptions from formal valuation and minority shareholder approval relied upon as fair market value did not exceed 25% of market capitalization.
• Hold Period:
  • Duration: Four months and one day from date of closing.
  • Expiry Date: July 17, 2026.
• Use of Proceeds:
  • General working capital and exploration of the Miner Mountain project.
• Previous Warrant Exercises:
  • Warrants expiring March 15, 2026: 4.65 million of 5 million exercised.
  • Total Proceeds from Exercises: $232,500.
• Operational Update:
  • Drill hole planning is proceeding; a team is preparing to go to the project to locate drill holes.
• Project Details:
  • Miner Mountain project: 100% owned by Sego.
  • Location: Near Princeton, B.C., 15 km north of Copper Mountain mine (Hudbay Minerals).
  • Size: 2,056 hectares.
  • Status: Alkalic copper-gold porphyry and gold exploration project; has an MOU with Upper Similkameen Indian Band; received Award of Excellence for reclamation work.

Notable Quotes

• "Due to a delay in the receipt of due diligence on a personal information form, the final $501,000 of the offering will be held back. The information revolves around a check performed by an outside agency and is no reflection on the subscriber."
• "The company fully expects to spend the funds for general working capital and exploration of the Miner Mountain project; there may be circumstances, for sound business reasons, where a reallocation of funds may be necessary."