viewPacton Gold Inc.

Pacton Gold agrees financing package with Sandstorm Gold, arranges private placement

The entire private placement will consist of up to 7.14 million shares at $0.70 each for total gross proceeds of $5 million

De Grey Mining Limited - Pacton Gold agrees financing package with Sandstorm Gold Ltd, arranges private placement
The package includes the purchase of royalties by Sandstorm on all of Pacton's mineral properties

Pacton Gold Inc (CVE:PA) (OTC PINK:PACKXF) (FSE:2NKN) revealed it has entered a $2.1 million financing package with Sandstorm Gold Ltd.

The Canadian explorer said the package includes the purchase of royalties by Sandstorm on all of Pacton's mineral properties, as well as a significant participation by Sandstorm in a $5 million private placement being undertaken by Pacton.

READ: Pacton Gold acquires additional 4,800 hectares of prospective gold ground in Red Lake

The entire private placement will consist of up to 7.14 million shares at $0.70 each for total gross proceeds of $5 million.

Pacton said Sandstorm has agreed to subscribe for 2.65 million shares in the placement for total proceeds of $1.85 million and to pay Pacton $300,000 in consideration for it granting Sandstorm net smelter returns royalties of either 0.5% or 1.0%, depending on the individual properties, on all mineral claims owned by Pacton or those that the company is earning an option on in the Red Lake District.

Sandstorm will also be granted a 1.0% net smelter returns royalty on all tenements Pacton owns in Australia, adding that it has also assigned all of its current royalty buyback rights to Sandstorm, to the extent of the company's interest.

The net proceeds from the royalty sale and the private placement will be used to fund continued exploration and development activities at Pacton’s Red Lake and Australian properties and for general working capital.

In a statement, Pacton executive chairman Dale Ginn said: "We are very pleased to be entering into this long-term partnership with Sandstorm Gold. Our technical team is going to be hard at work over the coming period as we advance our projects in Canada and Australia.

"Thanks to the recent acquisitions, we have a land package of more than 28,000 ha in the prolific high-grade gold district of Red Lake, Ontario, where we expect to continue drilling this summer as well as conducting fieldwork on the new claims. We also have comprehensive programs planned for our attractive land package in Western Australia, focusing along strike from De Grey Mining Ltd.'s (ASX:DEG) new Hemi deposit with shear hosted mineralization, as well as gold-bearing gravels in the Egina district."

The company said that prior to completion of the private placement it will consolidate its common shares on a 10 to 1 basis, such that for every 10 common shares currently held, the holder will receive one post-consolidated common share.

Contact the author at calum@proactiveinvestors.com

Follow home on Twitter @Cal_Proac

Quick facts: Pacton Gold Inc.

Price: 1.55 CAD

Market: TSX-V
Market Cap: $51.19 m

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