Toronto, Ontario – Atlanta Gold Inc. (TSXV: ATG; OTCQX: ATLDF) (the “Company”) announces that it has completed the initial closing of its previously announced private placement of Units consisting of senior secured notes (“Notes”) and common share purchase warrants (“Warrants”). The Company issued US$4 million principal amount Notes and 4,000,000 Warrants, for gross proceeds of US$4,000,000. The TSX Venture Exchange has granted the Company an extension to August 30, 2013 to complete the placement of up to an additional 5,000,000 Units.
The Notes bear interest at 10% per annum and the principal will be amortized at 25%, 35% and 40%, which will be repayable in cash installments on August 31, 2014, August 31, 2015 and August 31, 2016, respectively. The Notes are secured by the limited recourse guarantee of the Company’s subsidiary, Atlanta Gold Corporation (“AGC”), and by a mortgage of AGC’s interest in its Atlanta Project.
Each Warrant entitles the holder to purchase one common share of the Company for C$0.10 per share until August 31, 2016. The Company will have the right to accelerate the expiry date of the Warrants if the closing price of the Company’s common shares on the TSX Venture Exchange exceeds C$0.25 for 20 consecutive days on which the Company’s shares trade.
Noteholders received options exercisable until August 31, 2016 to purchase an aggregate of 95.0 troy ounces of gold at US$1,125 per ounce for each 100,000 Units purchased (US$100,000). Of the total ounces optioned per 100,000 Units, 23.75 ounces (25%) will vest on August 31, 2014, 33.25 ounces (35%) will vest on August 31, 2015 and 38.0 ounces (40%) will vest on August 31, 2016.
Mr. Eric Sprott purchased 2,200,000 Units and Concept Capital Management Ltd. purchased 1,300,000 Units. Two directors of the Company purchased an aggregate of 500,000 Units. The Company paid a finder’s fee of US$140,000 in connection with the initial closing. All securities issued on closing of the initial tranche are subject to a four-month statutory hold period, which will expire December 20, 2013.
Net proceeds from the offering will be used for exploration, excavating and test processing of bulk samples, environmental permitting, engineering and development in respect of the Atlanta Project, payment of liabilities, implementation of the Supplement Plan of Operations and for general working capital purposes.
The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and unless so registered, may not be offered or sold in the United States or to U.S. persons except pursuant to an exemption from such registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any offer or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About the Company
Atlanta Gold Inc. holds through its 100% owned subsidiary, Atlanta Gold Corporation, leases, options or ownership interests in its Atlanta properties which comprise approximately 2,159 acres (8.74 square kilometres) located 90 air kilometers east of Boise, in Elmore County, Idaho. A long history of mining makes Atlanta very suitable for development of new mining projects. The Company is focused on advancing its core asset, Atlanta, towards mine development and production.
This news release contains forward-looking information and forward-looking statements (collectively “forward-looking statements”) within the meaning of applicable securities laws with respect to the completion of additional tranches of the private placement financing and the intended use of proceeds from the financing. Such are based upon assumptions, opinions and analysis that management believe to be reasonable and relevant, including that definitive documentation will be entered into by additional investors in a timely manner such that the financing may be completed within the time permitted by the TSX Venture Exchange, and that there will be no significant decline in prevailing gold prices or in general economic and market conditions prior to subsequent closings of the financing. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements and accordingly, readers should not place undue reliance on those statements. Risks and uncertainties that may cause actual results to vary include, but are not limited to, the Company’s and AGC’s limited financial resources and their ability to raise sufficient funds on a timely basis to fund the capital and operating expenses necessary to carry out its planned initiatives; fluctuations in resource prices and currency exchange rates; changes in general economic conditions and in the financial markets; as well as other risks and uncertainties which are more fully described in the Company’s annual and quarterly Management’s Discussion and Analysis and in other Company filings with securities and regulatory authorities which are available at www.sedar.com. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking statements and accordingly, readers should not place undue reliance on those statements. Readers are cautioned that the foregoing lists of risks, uncertainties, assumptions and other factors are not exhaustive. The forward-looking statements contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements contained herein or in any other documents filed with securities regulatory authorities, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.
For further information contact:
Atlanta Gold Inc.:
Wm. Ernest Simmons
Atlanta Gold Inc.
CHF Investor Relations
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