MONTREAL, July 13, 2017 /CNW Telbec/ - ALGOLD
RESOURCES LTD. (TSXV: ALG – "Algold" or the "Corporation")
today announced the signature of a strategic partnership agreement
with its Mauritanian-based business partner, Wafa Mining &
Petroleum SA ("Wafa"). The agreement underscores Wafa's continued
confidence in the Corporation by providing a locally recognized
partnership for Algold to pursue its exploration and development
efforts in Mauritania.
"Wafa is a well-known and skilled Mauritanian-based industrial
firm and has been a valued Algold partner since 2013," commented
Algold Chairman Benoit La Salle. "Through this new strategic
agreement, Wafa not only further validates its long-term support,
but provides Algold with the opportunity to significantly
accelerate the development of the Corporation's Mauritanian
exploration projects. We are privileged to have Wafa as a strategic
partner and look forward to our ongoing collaboration, as Algold
continues its quest to unlock the true potential of its Tijirit
gold project including the high-grade Eleonore structures."
Wafa has agreed to complete a private placement (the "Offering")
of units of Algold, under which it will subscribe for a number of
Algold's common shares (each a "Common Share") equal to 10% of the
outstanding total, at a price of $0.20 per unit. Based on the current total of
167,250,275 outstanding Common Shares, Wafa would subscribe for
18,583,364 units, for total gross proceeds of $3,716,673. Each unit will be composed of one
Common Share and 0.5538 of one Common Share purchase warrant, for a
total of 10,291,682 such warrants. Each whole warrant (a "Warrant")
will entitle Wafa to acquire one Common Share at a price of
$0.30, for a period of 18 months from
the closing of the Offering. Upon closing of the Offering, Wafa
will have the right to nominate one member to Algold's board of
directors and would be granted the right to participate in any
future offerings to allow Wafa to maintain its ownership stake.
"We are extremely pleased to further strengthen our
collaboration with Wafa, which has a significant mining presence in
Mauritania and is active across
many sectors through its various subsidiary businesses," said
Algold CEO François Auclair.
"Wafa is a much-valued strategic shareholder that will ensure, in
collaboration with Algold, that the Corporation takes full
advantage of advancement opportunities to ultimately create
shareholder value."
The Offering, which remains subject to receipt of the approval
of the TSX Venture Exchange, is expected to close no later than
July 28, 2017.
The net proceeds from the Offering will be used to carry out
exploration drilling on Algold Mauritanian properties and for
working capital and general corporate purposes.
The securities offered have not been, and will not be,
registered under the U.S. Securities Act or any U.S. state
securities laws, and may not be offered or sold in the United States or to, or for the account or
benefit of, United States persons
absent registration or any applicable exemption from the
registration requirements of the U.S. Securities Act and applicable
U.S. state securities laws. This press release does not constitute
an offer to sell or the solicitation of an offer to buy securities
in the United States, nor in any
other jurisdiction.
In addition, Algold has agreed that, no later than July 31, 2018, it will make the cash payment of
US$200,000 due to Wafa under their
agreement previously announced on January 29, 2013. Wafa had
previously deferred that payment, as previously announced on
November 25, 2015. Wafa's
non-participating ownership stake in Société Mauritanienne
d'Exploration (or a successor entity), which holds the existing
Kneivissat permit, will also be increased from 10% to 12%.
ABOUT WAFA
WAFA Mining & Petroleum is part of Groupe WAFA SA.
Groupe WAFA SA is an important family enterprise in
Mauritania. The Ghadda family
business established itself in the import and distribution of
food products. Since then the business has diversified into
construction, industrial fisheries, real estate, public works,
distribution of petroleum products and banking. Its mining
business, WAFA Mining and Petroleum, was established in
2010 as WAFA Mining SA then extended in 2012 its scope to the
petroleum sector. It holds several tenements of mineral
substance in Tasiast, Amsaga and the Mauritanides.
ABOUT ALGOLD
Algold Resources Ltd. is focused on the exploration and
development of gold deposits in West
Africa. The board of directors and management team are
seasoned resource industry professionals with extensive experience
in the exploration and development of world-class gold projects in
Africa.
CAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING
INFORMATION
Certain statements in this press release may be forward-looking.
Such statements include those with respect to Corporation's ability
to raise funds under the Offering, the use of the proceeds raised
thereunder and the rights to be granted to Wafa post-closing.
Although the Corporation believes the expectations reflected in
such forward-looking statements are based on reasonable
assumptions, it can give no assurances that its expectations will
be achieved. Such assumptions, which may prove incorrect, include
the following: (i) Algold will be successful in its efforts to
pursue the exploration activities referred to in this news release,
(ii) Algold's management will not identify and pursue other
business objectives using the proceeds of the Offering, (iii) Wafa
and Algold will not negotiate terms for the Offering (including
Wafa's post-closing rights) different from those described above
and (iv) the price of gold will remain sufficiently high and the
costs of advancing the Corporation's gold projects sufficiently low
so as to permit Algold to implement its business plans in a
profitable manner. Factors that could cause actual results to
differ materially from expectations include (i) the Corporation's
failure to make effective use of the proceeds of the Offering, (ii)
Wafa and Algold agreeing to terms that are different from those
described above for any reason, (iii) the failure of the
Corporation's projects, for technical, logistical, labour-relations
or other reasons, (iv) the Corporation's inability to obtain the
necessary regulatory approvals for the Offering, (v) a decrease in
the price of gold below what is necessary to sustain the
Corporation's operations, (vi) an increase in the Corporation's
operating costs above what is necessary to sustain its operations,
(vii) accidents, labour disputes or the materialization of similar
risks, (viii) a deterioration in capital market conditions that
prevents the Corporation from raising the funds it requires on a
timely basis and (ix) generally, the Corporation's inability to
develop and implement a successful business plan for any reason. A
description of other risks affecting Algold's business and
activities appears under the heading "Risk Factors" on pages 19 to
21 of Algold's 2016 annual management's discussion and analysis,
which is available on SEDAR at www.sedar.com. No assurance can be
given that any events anticipated by the forward-looking
information in this press release will transpire or occur, or if
any of them do so, what benefits that Algold will derive therefrom.
In particular, no assurance can be given as to the future financial
performance of Algold. Algold disclaims any intention or obligation
to update or revise any forward-looking statements in order to
account for any new information or any other event, except as
required under applicable law. The reader is warned against undue
reliance on these forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Algold Resources Ltd.