NuLegacy Gold Halts Private Placement Ahead of AGM
AInvestThursday, Oct 3, 2024 7:46 pm ET
2min read
AGM --
NuLegacy Gold Corporation (NUG.V) has announced the termination of its ongoing non-brokered private placement, citing the upcoming annual and special general meeting (AGM) as the primary reason. The AGM is scheduled for October 7, 2024, and will focus on authorizing a re-capitalization of the Company's issued common shares. This decision has significant implications for NuLegacy Gold's financial position, future funding prospects, and shareholder dynamics.

The private placement, which was announced on August 15 and 28, 2024, involved the issuance of 100,000,000 units at a price of $0.01 per unit. The Company successfully raised $452,000 by issuing 45,200,000 units, with Crescat Portfolio Management LLC (Crescat) and various directors and officers of the Company purchasing 40,000,000 units for a total of $400,000. Each unit consisted of one common share and one warrant to purchase an additional common share at a nominal pre-consolidated exercise price of $0.05 per share.

The net proceeds from the Offering were allocated to pay the annual BLM and county filing fees to maintain the Company's district-scale Red Hill property in good standing and for general and administrative expenses.


At the upcoming AGM, NuLegacy Gold is seeking shareholder approval for a reverse split/consolidation of the Company's issued common shares on a 25 old shares for one new share basis. If approved, the Company intends to apply to the TSX Venture Exchange (TSXV) to have the post-consolidation warrant exercise price amended to an exercise price of $0.50 per share (or effectively $0.02 per share on a pre-Consolidation basis). The TSXV will require that if, for any 10 consecutive trading days during the unexpired term of the Warrants, the closing price of the Company's post-Consolidation shares exceeds the new exercise price by 25% or more, then the Warrants shall have a reduced exercise period of 30 days, which will begin no more than seven calendar days after the tenth Premium Trading Day.


In conjunction with the Consolidation, the Company intends to change its name to "Preservation Gold Corporation" (the "Name Change"). All securities issued in connection with the Offering are subject to a four-month hold period expiring December 28, 2024. The Company relied upon the exemptions from the valuation and minority shareholder approval requirements of Multilateral Instrument 61-101 contained in sections 5.5(a) and 5.7(1)(a) thereof for the Units issued to Crescat and various directors and officers of the Company under the Offering on the basis that the fair market value of the consideration for such Units did not exceed 25% of the Company's market capitalization.

The termination of the private placement may impact NuLegacy Gold's financial position and future funding prospects, as the Company will no longer receive the anticipated $452,000 in gross proceeds. This could potentially limit the Company's ability to maintain and advance its Red Hill Property and its continued operations through December 2025. However, the Company has stated that it intends to re-assess potential financing options following the completion of the Consolidation and Name Change.

In conclusion, NuLegacy Gold's decision to terminate its private placement ahead of the AGM highlights the Company's focus on securing shareholder approval for its proposed re-capitalization. While this decision may have short-term implications for the Company's financial position, it also demonstrates the Company's commitment to exploring alternative financing options to maintain its operations and exploration activities. Investors should closely monitor the Company's progress and developments as it navigates this critical period.
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