Canagold Resources Announces Launch of Secured Rights Offering


VANCOUVER, British Columbia /October 28, 2022 /Business Wire/ Canagold Resources Ltd. (TSX: CCM, OTC-QB: CRCUF, Frankfurt: CANA) (there “Company” Where “Canagold”), is pleased to announce additional financing plans to complete the New Polaris Project Feasibility Study, advance the permitting process, meaningfully engage with Company stakeholders and achieve Canagold’s strategic plan for 2023.

After careful consideration of the various financing alternatives, the Company believes that an extended rights offering to all existing shareholders provides the best and most democratic opportunity for all existing shareholders participating in the financing of the Company. The rights offering will provide an equal opportunity for all existing shareholders to continue to play an important role in Canagold’s future growth as it advances the New Polaris project towards feasibility and permitting, with the aim ultimate to rebuild the New Polaris mine in northern BC.

By participating in the rights offering, shareholders have the opportunity to protect their ownership interest in Canagold against dilution. The Company wishes to encourage all shareholders to contact the Company with any questions relating to the Rights Offering using the contact details provided at the bottom of this press release. Additional information will be sent to shareholders in due course.

Canagold will proceed with a secured rights offering to raise gross proceeds of $7,985,215. The Company will offer 91,259,596 rights (the “Rights”) to the holders of its ordinary shares (the “Shareholders”) at the close of business on the record date of November 10, 2022 (the “Registration Date“) on the basis of one (1) right for each (1) ordinary share held (the “Rights Offering”). Each two (2) Rights will entitle the holder to subscribe to one ordinary share of the Company (a “To share”) upon payment of a subscription price of $0.175 per share. The price of the rights offering is mandated by TSX rules which require the Company to offer all existing shareholders a significant discount to purchase new shares of the Company at a discount of at least 25% from the average market price. Company’s 5-day volume-weighted (“VWAP”) in order to provide a significant incentive to all shareholders to participate in the financing. The price reflects the minimum discount required by the TSX, based on the Company’s 5-day VWAP of $0.232804 per share. Upon completion of the rights offering and assuming all rights are exercised, the Company will have 136,889,334 shares outstanding, of which the shares issued under the rights offering represent 33.33%.

Sun Valley Investments S.A. (“Valley of the Sun), an “insider” and a “related party” (as such terms are defined in applicable securities laws) of the Company and the principal shareholder of the Company, has informed the Company of its intention to exercise, subject to applicable restrictions, all of its basic subscription privileges. The Company has also entered into a Standby Guarantee Agreement with Sun Valley, pursuant to which Sun Valley has agreed to purchase all shares issuable under the rights offering that remain unsubscribed under the basic subscription and the additional subscription privilege (the “standby guarantee”). Currently, Sun Valley holds 21,490,371 common shares representing 23.55% of the total issued and outstanding common shares of the Company. If Sun Valley acquires all of the shares under the Standby Guarantee, Sun Valley will own 67,120,169 Company Shares representing 49.03% of the total issued and outstanding common shares of the Company. after completion of the rights offering.

In August 2022, the Company obtained a bridge loan of $2,500,000 (the “Bridging loan”) from Sun Valley as a down payment for the stand-by guarantee. The bridge loan is unsecured, bears interest at the rate of 5.5% per annum, is payable on the earliest of the following dates: (i) the completion of the rights offering, (ii) 12 months after the date of the bridge loan agreement and (iii) the termination of the stand-by guarantee.

The Rights are expected to trade on the TSX under the symbol “CCM.RT” beginning on or about November 10, 2022 and until 2:00 p.m. (Pacific Standard Time) on or about December 9, 2022 ( the “Expiration date”), after which any unexercised rights will be null and void. Shareholders who fully exercise their rights under the Basic Subscription Privilege will be entitled to subscribe for additional shares, if available as a result of unexercised rights prior to the expiry time, subject to certain restrictions set out in the company’s rights offering circular dated October 27. , 2022 (the “Circular”), which will be filed on SEDAR under Canagold’s profile at The Company expects to close the Rights Offering no later than December 30, 2022.

Rights will be offered to shareholders resident in (ii) each state of the United States (excluding Arizona, Arkansas, California, Minnesota, Ohio, Utah and Wisconsin) and (iii) Canada, excluding any jurisdiction that does not provide a prospectus exemption substantially similar to the exemption provided in Canada or that otherwise requires obtaining regulatory approvals in that jurisdiction or the filing of any document by the Company in such jurisdiction relating to this offering (collectively, the “Eligible jurisdictions).

Accordingly, and subject to the detailed provisions of the Circular, the DRS declarations of rights (the “Bills of Rights”) and subscription forms will not be mailed to Shareholders residing outside Eligible Jurisdictions unless such Shareholders are able to establish to the satisfaction of the Company that they are eligible to participate in the ‘Offer with Rights. Registered shareholders wishing to exercise their Rights should send the completed subscription form, together with the applicable funds, to the Rights Agent, Computershare Investor Services Inc. (the “Rights Officer”), no later than the expiry time. Shareholders who hold their Common Shares through an intermediary, such as a bank, trust company, stockbroker or broker, will receive materials and instructions from their intermediary. Shareholders who fully exercise their rights may subscribe pro rata for additional Shares not otherwise purchased, if any, due to Rights not being exercised prior to the Expiry Time, subject to certain restrictions set forth in the Circular.

After December 2, 2022, the Rights Agent will attempt, on a commercially reasonable basis, to sell the Rights of Ineligible Shareholders (other than Shareholders whose subscriptions the Company accepts) through the facilities of the TSX. The Rights Agent will mail checks representing the net proceeds, without interest, of such sales.

Proceeds from the rights offering are expected to be used to repay the bridge loan, to advance the company’s properties and for working capital purposes.

About Canagold

Canagold Resources Ltd. is a growth-oriented gold exploration company focused on advancing the New Polaris project to production. Canagold is also looking to grow its asset base through future acquisitions of additional advanced projects. Canagold has access to a team of technical experts who can help create significant value for all Canagold shareholders.

On behalf of the Board of Directors

Catalin Kilofliski

Catalin Kilofliski
Chief executive officer

Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.

Caution Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities laws. Statements contained in this press release that are not historical facts are forward-looking information that involve known and unknown risks and uncertainties. Forward-looking statements in this press release include, but are not limited to, statements regarding the completion of the Rights Offering, Canagold’s future performance and the Company’s exploration plans and programs for its mineral properties. , including the timing of these plans. and programs. In some cases, forward-looking statements can be identified by the use of words such as “anticipates”, “has proven”, “expects” or “does not expect”, “is expected”, “potential ‘, ‘appears’, ‘budget’, ‘planned’, ‘estimates’, ‘plans’, ‘at least’, ‘intends’, ‘anticipates’ or ‘does not anticipate’, or ‘believes’ , or variations of such words and phrases or state that certain actions, events or results “could”, “could”, “should”, “should”, “could” or “will be taken”, “will occur” or “will be achieved”.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. forward-looking statements. These risks and other factors include, among others, risks relating to uncertainties inherent in the estimation of mineral resources; commodity prices; changes in general economic conditions; Market Sentiment; exchange rate; the Company’s ability to continue as a going concern; the Company’s ability to raise funds through equity financing; risks inherent in mineral exploration; risks related to foreign operations; future metal prices; failure of equipment or processes to perform as intended; accidents, labor disputes and other hazards of the mining industry; delays in obtaining government approvals; government regulation of mining operations; environmental risks; title disputes or claims; the limits of insurance coverage and the timing and possible outcome of disputes. Although the Company has attempted to identify important factors that could affect the Company and cause actual actions, events or results to differ materially from those described in the forward-looking statements, there may be other factors that cause actions, events or results not to be as intended, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, do not place undue reliance on forward-looking statements. All statements are made as of the date of this press release and the Company undertakes no obligation to update or change any forward-looking statements, except as required by applicable securities laws.


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