PRESS RELEASES 2/3/2014 8:12:58 PM | Marketwired News

True Gold Mining Inc. Announces Filing of Preliminary Short Form Prospectus and Execution of Subscription Agreement With Liberty Metals & Mining

2014-02-04T01:12:58+00:00

 

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb. 3, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

True Gold Mining Inc. ("True Gold" or the "Company") (TSX VENTURE:TGM) is pleased to announce that in connection with the bought deal offering (the "Bought Deal Financing") of units of True Gold (the "Units") announced on January 28, 2014, it has filed a preliminary short form prospectus with securities regulatory authorities in each of the provinces and territories of Canada, other than Québec. Each Unit is comprised of one common share of True Gold ("Common Share") and one-half of one Common Share purchase warrant ("Warrant").

In addition, True Gold is pleased to announce that it has entered into a subscription agreement (the "Subscription Agreement") with Liberty Metals & Mining Holdings, LLC ("Liberty"), a subsidiary of Liberty Mutual Insurance and the Company's largest shareholder, pursuant to which Liberty has agreed to purchase Units (the "Non-Brokered Financing") in order to maintain its pro rata interest in the Company in accordance with its participation rights under the investment agreement dated July 17, 2013 (the "Investment Agreement") between the Company and Liberty. In accordance with the terms of the Investment Agreement, Liberty has also exercised its participation rights to purchase Common Shares in connection with True Gold's issuance of 1,773,500 Common Shares (the "Consideration Shares") as part of the consideration for the acquisition of the remaining shares of its subsidiary, Yatenga Holdings Limited SA, which holds the Company's interest in the Goulagou and Rounga permits announced on December 6, 2013. The Consideration Shares were issued at an implied price of $0.30 per Common Share.

The Subscription Agreement provides that, subject to certain conditions, Liberty will subscribe for 21,181,218 Units (24,358,400 Units in the event the over-allotment option granted to the underwriters of the Bought Deal Financing is exercised in full) at a price of $0.40 per Unit and an additional 410,994 Common Shares at a price of $0.30 per Common Share. The net proceeds of the Bought Deal Financing and the transactions contemplated by the Subscription Agreement (the "Liberty Transactions") will be used primarily to fund the further development, construction and exploration of the Company's Karma project and ongoing working capital requirements. All Common Shares and Warrants issued in connection with the Liberty Transactions, including all Common Shares that comprise the Units and any Common Shares issued on exercise of the Warrants, will be subject to a four month hold period in respect of any resales in Canada, subject to certain exceptions.

Following completion of the Liberty Transactions, Liberty will beneficially own 19.88% of the outstanding Common Shares. The Subscription Agreement also provides that Liberty shall not exercise any Warrants issued to it under the Non-Brokered Financing if, following such exercise, Liberty would own more than 19.9% of the Company's Common Shares (on an undiluted basis), unless True Gold has first obtained any necessary shareholder and regulatory approvals. The Liberty Transactions are scheduled to close concurrently with the Bought Deal Financing and are subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange and applicable securities regulatory authorities.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

On behalf of the Board:

Mark O'Dea, Executive Chairman

Neither 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.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to completion of the Liberty Transactions, use of proceeds of the Liberty Transactions, and information with respect to future exploration and development plans concerning the Karma project. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", "estimates", "intends", "anticipates" or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made at the date that such statements are made. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including a need to reallocate the use of proceeds of the Liberty Transactions due to changes in the exploration and development plans for the Karma project, or for other prudent business reasons, and the risk factors disclosed elsewhere in the Company's public disclosure. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information contained herein is presented for the purposes of assisting investors in understanding the Company's financial and operating performance and the Company's plans and objectives and may not be appropriate for other purposes. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

True Gold Mining Inc.

Mark O'Dea

Executive Chairman

604-632-4677