Avalon Investment Holdings Ltd., the holder of an indirect 100% interest in the Omai Gold Mine in Guyana, is pleased to announce that it has completed a non-brokered private placement financing for aggregate proceeds of US$4,500,000.
Under the terms of the financing, Avalon issued 30,000,000 common shares of Avalon to a subsidiary of Silvercorp Metals Inc. (TSX/NYSE American: SVM) at a price of US$0.15 per common share.
In connection with the financing, Anconia Resources Corp. (TSXV:ARA) (“Anconia”) and Silvercorp entered into an investor rights agreement pursuant to which Silvercorp, as long as it owns at least 10% of the issued and outstanding shares of Anconia, has the right to participate in equity financings in order to maintain its pro rata interest in Anconia at the time of any such financing, and to nominate one individual to serve as a director of Anconia.
In a Press Release dated July 17, 2020, Anconia provided an update in connection with a proposed reverse take-over of Avalon (the “Proposed Transaction”). The Proposed Transaction is subject to approval of the TSX Venture Exchange to list the shares of the resulting entity (the “Resulting Issuer”) thereon. The Resulting Issuer will continue to carry on exploration and development, focused primarily on the exploration of Avalon’s Omai Gold Mine project in Guyana.
Mario Stifano, incoming President and CEO of the Resulting Issuer commented, “We are very pleased to have received the support of Silvercorp as we continue advancing the Omai Gold Mine.
Omai has historically produced over 3.7 million ounces of gold and has the potential to again become a tier one gold asset in the Americas. With historic unmined intercepts of 12 metres of 23.8 gpt gold, 61 metres of 3.7 gpt gold, 15 metres of 13.6 gpt gold, and numerous high priority exploration targets, Avalon is well positioned to create significant shareholder value on completion of the RTO listing and to commence drilling this year”.
Denis Clement, incoming Executive Director and founder of the Resulting Issuer commented, “We are pleased to welcome Silvercorp as a strategic investor. Silvercorp’s investment further validates the significant potential of Omai to become the leading gold exploration company in Guyana. With Silvercorp’s investment, Avalon is fully financed to complete the RTO listing and to carry out its exploration plans over the coming year”.
Upon closing of the Proposed Transaction, it is a anticipated that Silvercorp will own 15.8% of the Resulting Issuer.
Silvercorp is a profitable Canadian mining company producing silver, lead and zinc metals in oncentrates from mines in China.
Avalon is a private gold exploration company focused on gold projects in Guyana. The company’s flagship gold project is the famous Omai Gold Mine which it acquired from the Government of Guyana in 2018.