TORONTO, June 27, 2017 /CNW/ - Richmond Minerals Inc. (TSX-V: RMD) ("Richmond") is pleased to announce that it has entered into a definitive purchase and sale agreement (the "Agreement") to acquire from a private party (the "Vendor") a 100% undivided interest in five (5) unpatented mining claims and a 50% undivided interest in thirty-five (35) unpatented mining claims (the "Properties") situated in the mining district of Porcupine, in the township of Rollo, Ontario (the "Transaction").
As a result of the Transaction, if completed, Richmond will own 100% of the Ridley Lake Properties.
Highlights of the Transaction
As consideration for the Transaction, Richmond will:
- Issue 1,000,000 common shares to the Vendor as of the Closing Date (as hereinafter defined);
- Issue 1,000,000 common shares to the Vendor as of December 15, 2017;
- Pay a cash consideration of $102,000 (the "Cash Consideration") to be held in escrow pending the completion of transactions contemplated by the Agreement on the Closing Date. The Cash Consideration is to be used by the Vendor solely for the purpose of subscribing for units of Richmond pursuant to the Offering (as hereinafter defined); and
- Grant to the Vendor and another party an aggregate two percent (2%) net smelter royalty on the Properties (one-half of the royalty may be purchased at any time for $1.0 million).
The Transaction is subject to the receipt of applicable regulatory approvals by Richmond and the satisfaction of certain other closing conditions customary in transactions of this nature. The Transaction is expected to close on or before July 31, 2017 (the "Closing Date").
The Private Placement
Richmond intends to complete a non-brokered private placement of up to 5,000,000 units (the "Units") of Richmond at a price of $0.06 per Unit (the "Issue Price") for gross proceeds of up to $300,000 (the "Offering"). Richmond may, in its sole discretion, increase the size of the Offering, by up to 25% for an additional 1,250,000 Units at the Issue Price.
Each Unit will consist of one (1) common share in the capital stock of Richmond that is a "flow-through share" within the meaning of the Income Tax Act (Canada) (the "Act") and one-half of a common share purchase warrant (the "Warrant"). Each whole Warrant will entitle the holder thereof to acquire one common share, which is not a "flow-through share" within the meaning of the Act, of Richmond at a price of $0.10 until a period of two (2) years following the closing date of the Offering, whereupon the Warrants will expire. The securities issued and issuable pursuant to the Offering will be subject to a four month and one day statutory hold period.
The closing of the Offering is anticipated to occur on or about July 31, 2017.
Richmond intends to use the net proceeds from the Offering to fund continued exploration on Richmond's Ridley Lake Property assets.
The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange and applicable securities regulatory authorities.
The securities offered will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or applicable state securities laws, and may not be offered or sold to persons in the United States absent registration or an exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
