Magna Gold Finally Closes $10 Million Secured Debt Financing

Magna Gold (TSXV: MGR) has closed its previously announced financing. The company managed to raise gross proceeds of $10.0 million via a long, drawn out money raising cycle that the company initiated back in May 2021 with Delbrook Capital Advisors.

Originally advertised as a “funding with a founding and strategic shareholder” of the company, back in May when the financing was first announced, it appeared as a slam dunk – a non-brokered financing for secured convertible debentures. However, the funding evidently dragged on for months until it finally managed to close this morning.

It appears that the delay may be related to obtaining security for the financing by the company. The financing is to bear interest at a rate of 8.5% until the security arranged under the financing is delivered to the debt holders, with an initial target date of this occurring by September 30. Once security is delivered, interest will then drop to 6.5% per annum.

Under the terms of the financing, the debt is to mature 24 months from the date of issuance, and be convertible any time into common shares of the company at a price of $1.25 per common share. A 1.25% arrangement fee is expected to be paid upon closing as well.

Proceeds from the financing are to be used for mobilization and exploration activities on the firms portfolio of properties.

Magna Gold last traded at $0.86 on the TSX Venture.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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