OMF Fund IV, an entity managed by mining investor Orion Mine Finance, will invest $17-million in exploration and development company Dakota Gold and has committed future financing support.
NYSE American-listed Dakota Gold has a specific focus on revitalising the Homestake district in Lead, South Dakota.
Orion has agreed to purchase 6 666 667 shares of common stock of Dakota Gold at a price of $2.55 each for aggregate gross proceeds of $17-million. Orion will own approximately 7.78% of Dakota’s issued and outstanding shares of common stock following the closing of the investment.
Orion has agreed to provide a non-binding proposal for up to $300-million of financing support to Dakota for the purposes of financing the construction and development of the company’s assets.
In addition, at the closing of the Orion equity investment, Orion and the company will enter into a royalty agreement for a 1% net smelter returns royalty over certain of the company’s public land that is administered by the US Forest Service or Bureau of Land Management. The royalty excludes the company’s private land, where Dakota Gold is currently active with four drills at its Maitland and Richmond Hill projects, as well as certain claims forming part of the Blind Gold project.
Dakota Gold will receive total consideration of $1 million for the royalty, with $75 000 paid at closing and the balance based upon the achievement of certain development milestones.