International Tower Hill Mines Announces US$2.5 Million Non-Brokered Private Placement
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Insights
The completion of a non-brokered private placement by International Tower Hill Mines Ltd. resulting in raising $2.5 million through the issuance of 3,807,911 common shares is a strategic move for the company. The price per share at $0.664, which aligns with the closing price on NYSE American prior to the placement, suggests a fair market approach without offering a discount to the investors, which is a common practice in private placements to incentivize participation. The participation of existing major shareholders, such as Paulson & Co. Inc., Sprott Asset Management USA, Inc. and Kopernik Global Investors, LLC, indicates a continued confidence in the company's prospects, particularly in the Livengood Gold Project.
For stakeholders, the short-term implications include a slight dilution of their holdings by approximately 1.9%. However, the long-term prospects may be positive if the use of proceeds for working capital strengthens the company's position in a strong gold market. The company's focus on minimizing general and administrative expenses and leveraging the Livengood Gold Project's fundamentals could enhance its financial stability and growth potential in the gold industry.
The Livengood Gold Project's mention by Karl Hanneman, the CEO, underscores its significance to International Tower Hill Mines Ltd.'s growth strategy. The project's size, fundamentals and location near Fairbanks are highlighted as key leverage points in a bullish gold market. Investors in the mining sector often seek out projects with large resources and favorable logistics, as these can lead to cost efficiencies and improved project economics.
It is also noteworthy that the private placement adhered to regulatory requirements, including the hold period for the issued shares in Canada and the U.S., which is standard to prevent immediate resale that could put downward pressure on the stock price. The transaction's classification as a 'related party transaction' under MI 61-101 and the reliance on exemptions from formal valuation and minority shareholder approval requirements could raise questions about corporate governance. However, the company's assertion that the fair market value of the shares issued does not exceed 25% of the market capitalization may mitigate concerns about potential conflicts of interest or unfair advantage to related parties.
The Private Placement's compliance with Multilateral Instrument 61-101 (MI 61-101) is a crucial legal aspect of this transaction, especially considering the participation of related parties. The use of exemptions based on the transaction's value relative to the company's market capitalization is permissible under securities regulations, provided it does not disadvantage minority shareholders. The four-month hold period in Canada and the adherence to U.S. federal and state securities laws for resale restrictions are standard measures to ensure regulatory compliance and market stability.
Investors should be aware that these legal frameworks are designed to protect their interests by preventing market manipulation and ensuring transparency in transactions involving insiders. The company's disclosure about the nature of the transaction and its reliance on specific exemptions is a positive sign of its commitment to regulatory compliance and shareholder communication.
The Private Placement consisted of 3,807,911 common shares of the Company, representing approximately
Karl Hanneman, Chief Executive Officer, said "This modest financing was completed with respect for our current shareholders to minimize dilution and reflects our low G&A expenses as we position the Livengood Gold Project to respond to a strong gold market. We remain appreciative of our major shareholders who recognize the great leverage that the Livengood Gold Project offers in a rising gold market, given the size of the gold resource, its unique and positive fundamentals, and our land status and proximity to
The Private Placement has received the required regulatory approvals including approval of the Toronto Stock Exchange and the NYSE American. All common shares issued in the Private Placement are subject to a hold period in
As certain of the institutional shareholders qualify as related parties of the Company, the Private Placement was a "related party transaction" within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying upon exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 on the basis that the fair market value of the shares issued to such shareholders does not exceed
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the common shares issued in the Private Placement, nor shall there be any offer or sale of the common shares issued in the Private Placement in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
International Tower Hill Mines Ltd. has a
On behalf of
International Tower Hill Mines Ltd.
(signed) Karl L. Hanneman
Chief Executive Officer
This news release is not, and is not to be construed in any way as, an offer to buy or sell securities in
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SOURCE International Tower Hill Mines Ltd.
FAQ
What is the purpose of the Private Placement completed by International Tower Hill Mines Ltd.?
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What percentage of the total common shares does the Private Placement represent?
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What regulatory approvals did the Private Placement receive?
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