TRX Gold Corporation press release

Amarop Minerals Proposed Fundraising

2022-10-19

TSX - Toronto Stock Exchange · Gold · Canada · Financing

THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. PLEASE SEE THE IMPORTANT NOTICES SECTION WITHIN THIS ANNOUNCEMENT. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY, AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES OF AMAROQ MINERALS LTD. THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. IN PARTICULAR, IF YOU WISH TO PARTICIPATE IN THE UK PLACING, YOU SHOULD READ AND UNDERSTAND THE INFORMATION PROVIDED IN THE APPENDIX. THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014, WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

TORONTO, ON / ACCESSWIRE / October 19, 2022 / Amaroq Minerals Ltd. (AIM,TSX-V:AMRQ), an independent mining company with a substantial land package of gold and strategic energy transition mineral assets in Greenland, announces its intention to conduct a placing and subscription of new common shares ("Common Shares") to raise proceeds of approximately £30 million (equivalent to C$46.4 million or ISK4.9 billion)(the "Fundraising"), in addition to the £18 million (equivalent to C$27.9 million or ISK 2.9 billion) in relation to the ACAM Joint investment. The books are covered on the Fundraising at a price of 35 pence (C$0.54 or approximately ISK 57 at the closing exchange rate on 18 October 2022) per new Common Share (the "Placing Price"), with the proceeds being used to expand the Company's resource base and accelerate exploration activities.

Highlights

The approximately £30 million Fundraising will consist of: A proposed placing of new Common Shares (the "UK PlacingShares") with new and existing institutional investors (the "UKPlacing"), at the Placing Price, including a £5 million commitment from an existing family office shareholder; An oversubscribed ISK 2.4 billion (equivalent to £15 million or C$23.2 million) underwritten proposed placing of new depositary receipts representing new Common Shares (the "IcelandicPlacingShares") with new and existing institutional investors (the "Icelandic Placing"), at the Placing Price; and A proposed private placement of new Common Shares (the "CanadianSubscription Shares", together with the UK Placing Shares and the Icelandic Placing Shares, the "Fundraising Shares") by certain new and existing institutional investors, directors and senior management of the Company at the Placing Price (the "Canadian Subscription"). Directors and senior management have committed to subscribe for £1.75 million (equivalent to C$2.71 million or ISK 285 million) in the Fundraising.

The Fundraising complements the joint venture between the Company and ACAM, LP ("ACAM"), announced on 10 June 2022. In addition to the Fundraising, the Company has now executed final documentation in relation to the ACAM joint venture, with closing and receipt of the initial £18 million funding now only subject to certain regulatory conditions precedent; Net proceeds from the Fundraising will be used to expand and delineate the resource base at the Company's cornerstone Nalunaq gold project ("Nalunaq") in south Greenland and progress the asset towards mine construction, as well as provide funding to accelerate exploration across the Company's significant portfolio of gold assets and other corporate purposes, and sits alongside ACAM's joint venture investment; The Company is applying for listing of the Icelandic depository receipts, representing the Icelandic Placing Shares (the "Icelandic Depository Receipts"), on the Nasdaq First North Growth Market in Iceland ("Icelandic Exchange"), a multilateral trading facility (the "Icelandic Listing)", with admission to Icelandic Exchange expected to become effective on 1 November 2022, subject to completion of the Fundraising and obtaining the necessary approvals from the TSX Venture Exchange (the "TSX-V").

Details of the Fundraising

Stifel Nicolaus Europe Limited ("Stifel") is acting as sole bookrunner, nominated adviser and broker on the UK Placing and Panmure Gordon (UK) Limited ("Panmure Gordon"; together with Stifel, the "UK Banks") is acting as manager and broker in relation to the UK Placing; Arion banki hf. ("Arion Bank") and Landsbankinn hf. ("Landsbankinn") are acting as joint bookrunners and underwriters on the Icelandic Placing; In relation to the UK Placing: The UK Placing will be conducted through an accelerated bookbuild process (the "Bookbuild") to be conducted by the UK Banks, which will launch immediately following the release of this announcement and will be made available to eligible institutional investors subject to the terms and conditions set out in the Appendix to this announcement. The Bookbuild is expected to close no later than 8.00 a.m. on 20 October 2022, however the UK Banks and the Company reserve the right to close the Bookbuild earlier or later, without further notice; The UK Placing is subject to the terms and conditions set out in the Appendix to this announcement (collectively, the "Announcement"); The UK Placing is conditional amongst other things upon the Icelandic Placing completing and the Icelandic Listing. The Icelandic Placing is conditional, amongst other things, upon the UK Placing not having been terminated prior to the subscription for the Icelandic Placing Shares and the receipt of final approval from the TSX-V for the listing of the Fundraising Shares, but is not conditional upon the UK Placing being completed;

In relation to the Icelandic Placing: Arion Bank has agreed to underwrite the purchase by placees procured by it of such number of Icelandic Placing Shares which at the Placing Price (converted into ISK on the day of close of the Bookbuild) have an aggregate subscription price of ISK 1.846 billion (equivalent to £11.3 million and C$17.6 million) pursuant to the terms and conditions agreed between Arion Bank and the Company; Landsbankinn hf. has further agreed to underwrite the purchase by placees procured by it such number of Icelandic Placing Shares which at the Placing Price (converted into ISK on the day of close of the Bookbuild) have an aggregate subscription value of ISK 875 million (equivalent to £5.38 million and C$8.32 million) pursuant to the terms and conditions agreed between Landsbankinn and the Company;

Allocations are at the absolute discretion of Stifel, in consultation with the Company and Panmure Gordon. The number of Fundraising Shares will be determined following completion of the Bookbuild by agreement between the Company and Stifel. Details of the number of Fundraising Shares will be announced as soon as practicable after the close of the Bookbuild.

Eldur Olafsson, CEO of Amaroq, commented:

"This Fundraising will be instrumental to driving growth throughout our exciting portfolio in Greenland, where we occupy a leading position in what is one of the last frontiers for Western governments and companies to secure the strategic minerals that will prove vital in the coming decades. On completion of the Fundraising, the funds raised will enable us to progress the development of our flagship Nalunaq gold project, one of the highest-grade gold deposits in the world, whilst accelerating exploration of our strategic minerals assets to provide raw materials needed for the energy transition."

Enquiries:

Amaroq Minerals Ltd.

Eldur Olafsson, Executive Director and CEO +354 665 2003 eo@amaroqminerals.com

Eddie Wyvill, Investor Relations +44 (0)7713 126727 ew@amaroqminerals.com

Stifel Nicolaus Europe Limited (Joint Bookrunner, Nominated Adviser and Joint Broker)

Callum Stewart Simon Mensley Ashton Clanfield +44 (0) 20 7710 7600

Arion banki hf. (Joint Bookrunner)

Hreidar Mar Hermannsson Elka Osk Hrolfsdottir Erlendur Magnus Hjartarson +354 444 7000

Landsbankinn hf. (Joint Bookrunner)

Ellert Arnarson Sigurður Kári Tryggvason Júlíus Fjeldsted 354 410 4000

Panmure Gordon (UK) Limited (Manager, Joint Broker)

John Prior Hugh Rich James Sinclair-Ford +44 (0) 20 7886 2500

Camarco (Financial PR)

Billy Clegg Elfie Kent Charlie Dingwall +44 (0) 20 3757 4980

Background to and Reasons for the Fundraising

The Company's strategy is to leverage its first mover advantage in Greenland, underpinned by the previously producing Nalunaq project, to build a full-cycle mining company in Greenland, delivering long term shareholder value and providing significant upside potential through its land bank of high-impact gold and strategic minerals exploration assets. Amaroq has been listed on the TSX-V since July 2017 and the AIM Market of the London Stock Exchange plc ("AIM") since 31 July 2020.

The Company acquired the Nalunaq gold project in 2015 and has made significant progress since this time in expanding the extent of the resource base through drilling, incorporating a new geological model (the Dolerite Dyke model) to better understand the distribution of the high-grade ore, building a new 50-person winterized camp to allow full-year activities, and acquiring and otherwise progressing much of the infrastructure required to bring Nalunaq into production. During this time, Amaroq has also been able to acquire the largest package of mineral rights in southern Greenland, covering 7,866.85 km2, and the third largest in the whole of Greenland, with a number of assets that are highly prospective for gold and strategic minerals. The addition of strategic minerals into the portfolio provides significant growth potential, as these metals and minerals, such as copper, nickel, titanium and graphite, are critical for increased electrification as part of the world's decarbonisation strategy and as independent supply continues to become an increasing focus for nations globally.

As previously announced, the Nalunaq development was required to be put on temporary hold in February 2021 due to unforeseen and material cost increases associated with the impacts of COVID. As a result, the Company redirected its focus, continued to advance and de-risk the Nalunaq project ahead of development and has conducted successful regional exploration across its portfolio targeting gold and strategic minerals and resulting in a material increase in the Company's reserve base.

Key developments at Nalunaq since AIM admission in 2020 include:

Infrastructure:since admission, Amaroq has completed a significant proportion of Nalunaq's required infrastructure, with 60% of major processing plant equipment procured, a 50-person all weather exploration camp constructed and commissioned, critical surface mobile equipment purchased and supporting infrastructure either purchased or commercially and technically evaluated. Third Party Engineering Study: Halyard Inc. (Halyard) was engaged to complete a third party engineering study on Nalunaq's development costs including the process plant, mobile equipment, surface infrastructure, permanent camp and associated logistics and engineering. The study concluded that the advanced engineering of the overall project is now to Feasibility Study level based on the Canadian requirements of National Instrument 43-101 - _Standards of Disclosure for Mineral Project_("NI 43-101"). The Dolerite Dyke Model:Amaroq has worked with SRK Consulting to develop the most robust Mineral Resource estimation technique for Nalunaq possible. This included the development of the Dolerite Dyke Model to account for the high-grade variability from core sampling (the ‘nugget effect') in order to better reflect the full resource potential at Nalunaq. The model allows the geological results to be incorporated into the Halyard engineering study in order to move the project towards independent technical studies to support further development. Resource Growth through Drilling:Amaroq has drilled approximately 22,373 metres at Nalunaq since it listed on AIM and, incorporating learnings from the new Dolerite Dyke model, has identified two new high-grade zones, namely Valley Block and Welcome Block, taking the total number of identified high grade zones at the asset to five. The Valley Block is now expected to be one of the key targets for initial development. As a result of drilling in the 2020 and 2021 field seasons, Amaroq announced on 6 September 2022 that it had increased its total Inferred Mineral Resource by 30% contained gold, with a 50% increase in average grade, since the previous estimate reported in 2020. The resource now sits at 355 Kt @ 28.0 g/t Au for 320 Koz gold, putting the project in the top 2% of projects globally in terms of reported gold resource grade. Delivering on our ESG mandate:The Company has worked hard over the period to update its Environmental Impact Assessment ("EIA") and Social Impact Assessment ("SIA"), and will continue to do so over the coming months in line with the terms of its exploitation licence. 1. it has read and understood this Announcement in its entirety (including the Appendices) and acknowledges that its participation in the UK Placing will be governed by, and subject to, the Terms and Conditions of the UK Placing as referred to and included in this Announcement;

Going forwards, the Company has laid out a clear plan for bringing Nalunaq back into production, with further drilling planned to expand the resource base and infill drilling to support resource confidence and delineation. The Company is currently conducting an option study before moving towards initial development. Material produced from this initial development, which is expected to be in the Valley Block, will provide the Company the optionality to complete a bulk sample, potentially for toll-treatment offsite, and is expected to facilitate the recognition of reserves to underpin a pre-feasibility study on the asset. A bulk sample, and the associated infrastructure, would be dual purposed and would also provide the initial construction required to commence redevelopment of Nalunaq. A pre-feasibility study would outline the move to full scale underground construction and mining and demonstrate a significant de-risking of the development plan for Nalunaq and be used to support external debt and external investment. Amaroq will look to commence full mine construction and operations following the bulk sample and pre-feasibility study, subject to securing appropriate financing.

ACAM Joint Venture

The Fundraising complements the joint venture between the Company and ACAM, announced on 10 June 2022, under which the Company will establish a new subsidiary (the "JV Company") to hold certain licences in which the majority of resource is expected to relate to non-gold products (the "Initial JV Company Licences").

ACAM, through its affiliate company GCAM, LP, will invest an initial amount of £18.0 million under a subscription and shareholders' agreement (the "Subscription and Shareholders' Agreement") in return for shares in the JV Company representing up to 49% of the JV Company, to fund work programmes on the Initial JV Company Licences. The Company will invest £5.0 million under the Subscription and Shareholders' Agreement, with such amount to be set-off against costs incurred by Nalunaq A/S as the JV Company's project manager.

The Subscription and Shareholders' Agreement has been signed and placed into escrow, and will be released (and will become effective) subject to satisfaction of certain conditions, expected to be satisfied by Q1 2023, including (a) written approval by the Government of Greenland pursuant to section 88(1) of the Mineral Resources Act of the transfer of the Initial JV Company Licences by Nalunaq A/S to the JV Company; (b) written confirmation from the Greenland Tax Agency that the demerger and transfer of the Initial JV Company Licences to the JV Company will be treated as tax neutral and not result in a tax charge; (c) execution of a novation agreement by Nalunaq A/S, the Company, the JV Company, Orano Mining and GCAM, LP in relation to the novation of the existing transfer and option agreement between Nalunaq A/S and Orano Mining; and (d) receipt of final acceptance from the TSX-V in connection with the transactions outlined in the Subscription and Shareholders' Agreement. In the event that a takeover of the Company becomes effective before the conditions precedent are satisfied and the bidder notifies the Company, the JV Company or Nalunaq A/S that (a) it does not want to proceed to completion of the Subscription and Shareholders' Agreement; or (b) the conditions precedent are not satisfied or waived by 31 March 2023, GCAM will have the right to terminate the escrow and a break fee will be payable by the Company to GCAM. The break fee will be calculated based on a daily rate of £4,932 and the number of days elapsed since 19 October 2022, and is subject to a cap of £941,918.

Under the Subscription and Shareholders' Agreement, the JV Company has agreed to grant a right of first refusal to the Company in relation to any of the JV Company's licences in Greenland which it does not wish to progress, wishes to withdraw from or on which material gold assets are discovered, and the Company has agreed to grant a right of first refusal to the JV Company in relation to any of the Company's mineral licences which it does not wish to progress, wishes to withdraw from or on which material non-gold assets are discovered.

Sources and Uses of Proceeds

Existing cash will be used to fund exploration drilling and the JV deal means there is no spending requirement on the wider strategic assets in the short term, beyond the £5.0 million under the Subscription and Shareholders' Agreement, with such amount to be set-off against costs incurred by Nalunaq A/S as the JV Company's project manager.

The use of proceeds of the Fundraising includes £14.1 million to fund initial development at Nalunaq, including underground development costs and bulk sampling. In addition to this the Company plans to spend a further £1.3 million to conduct a further approximately 3,000 meters of drilling to expand the resource. Coupled together this Fundraising aims to increase both the size and the confidence level of the resource base. The increased confidence is aimed at to facilitating the conversion of Mineral Resources to Mineral Reserves and the bulk sample will possibly provide initial cash flows from Nalunaq which would be used to progress the project through a pre-feasibility study, as well as completing its EIA and SIA, moving the asset towards full scale mining.

| Sources of Proceeds (million) | Total | | Proceeds from ACAM transaction | £18.0 | | Gross fundraising | £30.0 | | Transaction costs | £(2.4) | | Net Sources of Proceeds (approximately) | £45.6 |

| Uses of Net Proceeds (£ million) | 2022 | 2023 | 2024 | Total | | Strategic minerals 3-year exploration program | 1.0 | 5.0 | 12.0 | 18.0 | | Nalunaq drilling (~3,000 meters) | - | 1.3 | - | 1.3 | | Nalunaq resources and reserve development (~1,100 meters) | - | 14.1 | - | 14.1 | | Regional exploration (drilling and geophysics) | - | 3.0 | - | 3.0 | | Camp support & labour | - | 2.0 | 2.4 | 4.4 | | General & administrative expenses | - | 4.6 | - | 4.6 | | EIA / SIA | - | 0.2 | - | 0.2 | | Total Uses of Net Proceeds | 1.0 | 30.2 | 14.4 | 45.6 |

In the unlikely event that the Icelandic Placing completes but the UK Placing does not, the Company would adjust the uses of proceeds to reflect a smaller resource development program as well as making other less material reductions to the wider exploration program.

Bookbuild

Stifel is acting as sole bookrunner, nominated adviser and broker on the UK Placing and Panmure Gordon is acting as manager and broker on the UK Placing. Arion Bank and Landsbankinn are acting as joint bookrunners and joint underwriters on the Icelandic Placing.