RBC is leading the True Gold bought deal (Photo: Reynard Li/Bloomberg)

RBC is leading the True Gold bought deal (Photo: Reynard Li/Bloomberg)

Last week, True Gold (TGM:TSX) announced a $36.6 million bought deal at a price of $0.40 (half warrant at $0.47).  The deal was led by RBC Capital Markets and included BMO and Haywood.  RBC was rated the top advisor for Canadian M&A for the third straight year (Bloomberg).  Sources tell us, it is close to being done.  There is also a 15% greenshoe which, I suspect, would be exercised which would bring the total raise to $42 million.

The company announced this morning, that their largest shareholder, Liberty Metals and Mining has subscribed for their pro-rata amount of the offering; 21,181,218 units.  Liberty will remain a 19.88% shareholder in True Gold and will not be able to exercise warrants which would put them over the 19.9% threshold unless True Gold has first obtained any necessary shareholder and regulatory approvals.

Liberty bought over 50 million shares at $0.33 in July 2013 to become the largest shareholder in True Gold.  Liberty Metals and Mining has been busy over the past few years becoming major shareholders in companies including Alderon Iron Ore, Pretium and Allana Potash.

Teck Resources is also a 12% shareholder, but we have yet to hear if they will maintain their pro rata shareholding as well.

The company has become one of the best junior gold development stories of the past 6 months, hitting key milestones including receiving permits, completing a feasibility study and successful equity raises.  Next for the company will be to secure a project facility for the remaining <$100 million it needs to build the Karma gold project which is expected to produce roughly 100,000 ounces per year in a heap leach operation that has all-in sustaining costs of approximately $720 per ounce.

Read: Announces Filing of Preliminary Short Form Prospectus and Execution of
Subscription Agreement With Liberty Metals & Mining