The private placement with Sprott Asset Management, which NSGold Corp. (NSX – $0.53) announced on July 21st, has been completed. Certain Sprott funds and managed accounts subscribed for a total of 8,627,451 shares at a price of $0.51 per share, for gross proceeds to NSGold of $4.4 million. All conditions of the placement, set before the recent market turmoil, have remained unchanged.
Sprott now controls approximately 19.9% of all issued and outstanding shares of NSGold, the maximum allowed. Highly uncommon, is that Sprott immediately took this position in common shares instead of partly in common shares and partly in warrants. This indicates that Sprott was really confident in NSGold’s future as a warrant gives a holder the opportunity to wait and see how his investment develops and then decide if he wants to increase his position.
Private Placement Advantages
There are several more positive items about this placement.
- With this financing, NSGold brings its total cash position to $6.5 million, which is more than enough to fund its mapping and drilling program at Dios Padre and its upcoming drill work at Mooseland, which I expect to start shortly;
- With Sprott Asset Management, NSX has gained a long-term focused and well-known shareholder; and
- Before actually closing the placement, both Sprott and Euro Pacific Canada Inc., the broker acting as agent for the private placement, performed a substantial due diligence review on NSGold. This is a third party confirmation that everything at NSGold is being done as it should and of the Company’s potential.
Hans van Hoof, NSGold’s Chairman and CEO, together with Sprott Asset Management, now control about 45% of total shares outstanding. Sprott is a world class shareholder for any mining company to have. The fact that he chose NSGold to invest in, says something.
NSGold will use the net proceeds from the private placement for working capital and to further advance its main assets Dios Padre and Mooseland. We look forward to those results.
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