Discovery Metals Corp. (TSXV: DSV; OTCQX: DSVMF) (“Discovery” or “the Company”) is pleased to announce that it has arranged a non-brokered institutional private placement (the “Private Placement”) to raise C$35,000,000 through the issuance of 25,925,925 units (“Units”) at a price of C$1.35 per Unit, representing a premium to its last closing price. Each Unit is comprised of one common share of Discovery (“Common Share”) and one half of one Common Share purchase warrant, with each full warrant exercisable at C$1.75 for a period of two years after the date of issuance.
Mr. Eric Sprott has agreed to invest C$15,000,000 in the Private Placement, on the acquisition of 11,111,111 Units. This investment will result in Mr. Sprott holding approximately 27.1% of Discovery’s issued and outstanding Common Shares, post-closing on an undiluted basis.
Mr. Eric Sprott commented, “Discovery provides unmatched leverage to a rising silver price and I am very encouraged to see the Discovery team continue to execute on their plans at the Cordero project. I have continually grown my position in the Company and it is now one of my largest investments in the silver space.”
Taj Singh, Discovery’s President and CEO stated: “We are very pleased with the continued support of our largest shareholders which recognizes the exceptional exposure Cordero offers to increasing silver prices. Recent drill results show that our 100%-owned Cordero project is developing all the attributes of a tier 1 project – grade, scale, significant organic growth opportunities and well located in one of Mexico’s premier mining belts. The current financing, priced at a premium to market, reflects strong institutional demand, and will create an industry leading balance sheet with over C$75 million in cash allocated for aggressive exploration, resource expansion, and future development.”
The proceeds of the Private Placement will be used primarily to fund Discovery’s continuing exploration program at its Cordero project and its Coahuila projects. A portion of the proceeds will be used for general working capital and business development purposes.
Discovery anticipates that certain insiders will acquire securities in the Private Placement. To the extent such insiders participate in the Private Placement, any such participation would be considered a “related party transaction” as defined under Multilateral Instrument 61-101.
Discovery may pay a finder’s fee to one or more arms’ length parties who introduce Discovery to investors, in accordance with the policies of the TSX Venture Exchange. Clarus Securities Inc., Eight Capital, Sprott Capital Partners LP are acting as finders for North American investors and Arlington Group Asset Management Limited are acting as finders for European investors on the Private Placement. The securities issued will be subject to a four-month-and-one-day statutory hold period from the date of issuance. Closing of the Private Placement remains subject to TSX Venture Exchange approval.
On Behalf of the Board of Directors,
Taj Singh, M.Eng., P.Eng., CPA
President, Chief Executive Officer, and Director
Discovery Metals Corp. (TSX-V: DSV, OTCQX: DSVMF) is a Canadian exploration and development company headquartered in Toronto, Canada, and focused on historic mining districts in Mexico. Discovery’s flagship is its 100%-owned Cordero silver project in Chihuahua State, Mexico. The 35,000-hectare property covers a large district that hosts the announced resource as well as numerous exploration targets for bulk tonnage diatreme-hosted, porphyry-style, and carbonate replacement deposits.