/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE U.S./
TORONTO, June 9, 2014 /CNW/ - Northquest Ltd. (TSX-V:NQ)
("Northquest") is pleased to announce that it has entered
into agreements with Nord Gold N.V.
(LSE: NORD) ("Nordgold") to complete a non-brokered private
placement (the "Offering") pursuant to which Northquest will
issue an aggregate of 12,777,777 units of Northquest for aggregate
proceeds of $2,500,000 in two
tranches.
Pursuant to the first tranche of the Offering
(the "First Tranche"), Northquest has agreed to issue an
aggregate of 2,777,777 units of Northquest (the "First Tranche
Units) at a price of $0.18 per
First Tranche Unit. Each First Tranche Unit will consist of:
(i) one common share of the Northquest ("Common Share"); and
(ii) one-half of one common share purchase warrant (each whole such
warrant, a "First Tranche Warrant"). Each First
Tranche Warrant shall entitle the holder to acquire one additional
Common Share at an exercise price of $0.24 for a period of 24 months from the date of
issuance thereof, provided that if, at any time after the date
which is four months and one day following the issuance thereof,
the volume weighted average price of the Common Shares on the
principal stock exchange upon which the Common Shares are listed
(the "Exchange") is equal to or exceeds $0.50 for 20 consecutive trading days, then
Northquest may accelerate the expiry date of the First Tranche
Warrants, in which event the First Tranche Warrants will expire
upon the date (the "Accelerated Expiry Date") which is 30
days following the dissemination of a press release by the
Northquest announcing the Accelerated Expiry Date. Other
subscribers (some or all of whom may be insiders of Northquest) may
purchase up to 1,000,000 First Tranche Units in the First Tranche
for additional gross proceeds of up to $200,000 (the "Additional Units").
Pursuant to the second tranche of the Offering
(the "Second Tranche"), Northquest has agreed to issue
10,000,000 units of Northquest (the "Second Tranche Units")
to Nordgold or its nominee at a price of $0.20 per Second Tranche Unit. Each Second
Tranche Unit will consist of: (i) one Common Share; and (ii)
one-half of one common share purchase warrant (each whole such
warrant, a "Second Tranche Warrant"). Each Second
Tranche Warrant shall entitle the holder to acquire one additional
Common Share at an exercise price of $0.27 for a period of 24 months from the date of
issuance thereof, provided that if, at any time after the date
which is four months and one day following the issuance thereof,
the volume weighted average price of the Common Shares on the
Exchange is equal to or exceeds $0.50
for 20 consecutive trading days, then Northquest may accelerate the
expiry date of the Second Tranche Warrants, in which event the
Second Tranche Warrants will expire upon the date (the "Second
Accelerated Expiry Date") which is 30 days following the
dissemination of a press release by the Northquest announcing the
Second Accelerated Expiry Date.
Concurrently with the closing of the Second
Tranche, Nordgold will have the right to appoint one representative
to Northquest's board of directors and the right to participate
pro rata in all equity issuances by Northquest, subject to
certain conditions.
The First Tranche is subject to certain
conditions, including the approval of the TSX Venture Exchange (the
"TSXV"). The Second Tranche is also subject to certain
conditions, including the approval of the TSXV, a satisfactory site
visit completed by Nordgold, the completion of legal and technical
due diligence, the approval of Northquest's shareholders and the
issuance of 2,777,777 First Tranche Units to Nordgold pursuant to
the First Tranche.
Northquest intends to use the gross proceeds of
Offering for further exploration of its Pistol Bay Project and for
general and administrative expenses.
Closing of the First Tranche is expected to
occur in one or more closings, the first of which is expected to
occur on or about June 12, 2014, and
closing of the Second Tranche is expected to occur on or about
July 14, 2014 or such later date as
may be agreed between the parties.
Assuming that the Additional Units are issued
and no other changes to Northquest's issued and outstanding Common
Shares, following the closing of the Second Tranche, Nordgold will
hold 12,777,777 Common Shares (representing 22.3 % of the issued
and outstanding Common Shares on a non-diluted basis based on the
number of Common Shares issued and outstanding as of the date
hereof) and First Tranche Warrants and Second Tranche Warrants to
acquire up to an additional 6,388,889 Common Shares.
Nordgold is an international pure-play
emerging-markets gold producer established in 2007 and publicly
traded on the London Stock Exchange. Nordgold has expanded rapidly
through acquisitions and organic investment, achieving a rate of
growth unmatched in the industry during that period. In 2013,
Nordgold's gold production increased to 924,000 ounces from 717,000
ounces in 2012. Nordgold operates nine mines in Russia, Kazakhstan, Burkina
Faso and Guinea. Nordgold
has two development projects, four advanced exploration projects
and a diverse portfolio of early exploration projects and licenses
in CIS, West Africa and
French Guiana. Nordgold employs
over 10,000 workers.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS
REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE
POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR
THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Forward Looking Statements - Certain
information set forth in this news release may contain
forward-looking statements that involve substantial known and
unknown risks and uncertainties. These forward-looking statements
are subject to numerous risks and uncertainties, certain of which
are beyond the control of Northquest, including, but not limited to
the impact of general economic conditions, industry conditions,
volatility of commodity prices, currency fluctuations, dependence
upon regulatory approvals, and the availability of financing and
closing of the Offering. Readers are cautioned that the assumptions
used in the preparation of such information, although considered
reasonable at the time of preparation, may prove to be imprecise
and, as such, undue reliance should not be placed on
forward-looking statements.
SOURCE Northquest Ltd.