Canamex Gold Corp. Announces GOLDUSA (symbol GOLD) Security Token Offering (STO)

Published: 2018-05-09T16:00:00+00:00
Canamex Gold Corp. Announces GOLDUSA (symbol GOLD) Security Token Offering (STO)

(via TheNewswire)



May 09, 2018 / TheNewswire / Vancouver, Canada - Canamex Gold Corp. (the "Company" or "Canamex") (CSE: CSQ) is pleased to announce that it will be shortly launching a non-brokered private placement to accredited investors, via an initial Security Token Offering ("STO"). It is anticipated that this initial STO will provide the financing to complete mine permitting and development work, to a shovel-ready stage (production decision and construction financing), at the Bruner Gold Project in Nevada. Further general details of the proposed STO and further initiatives proposed by the Company, are as follows:

Security Token Offering (STO)

  • - Initial STO for GOLDUSA Tokens starting at 40% discount to the spot gold price

    - Exposure to gold-backed token, starting at $US 800 per oz instead of approx. $1350 per oz spot price

    - Each token is an interest in 1/200 oz gold and initial token price is only $US 4.00 per token

    - This is 40% discount to $US 6.75 value per token, based on $US 1350 per oz spot gold price

    - Minimum subscription: 2000 GOLDUSA Tokens

    - Purchase methods accepted: Fiat currencies, Ethereum (ETH) and Bitcoin (BTC)

This pricing is for a limited time from the launch date. After that date, the Company reserves the right to increase the initial STO subscription offer price in accordance with the following indicative schedule, or earlier depending on demand:

Week from the Launch Date

Offer Price

Offer Price

Spot premium

Offer Price

per token

per oz.

to Offer Price

Discount to Spot

Week 0

USD 4.000

USD 800

69%

41%

Week 1

USD 4.125

USD 825

64%

39%

Week 2

USD 4.250

USD 850

59%

37%

Week 3

USD 4.375

USD 875

54%

35%

Week 4

USD 4.500

USD 900

50%

33%

Week 5

USD 4.625

USD 925

46%

31%

Week 6

USD 4.750

USD 950

42%

30%

Week 7

USD 4.875

USD 975

38%

28%

Week 8

USD 5.000

USD 1,000

35%

26%

Assumptions: Gold spot price $US 1350 per oz used as a basis for these calculations but which varies daily

Subscription

The accredited investor subscription process will be digital, via an online portal. Further details to be provided at launch date. Purchase methods accepted: Fiat currencies, Ethereum (ETH) and Bitcoin (BTC).

Gold Token Holder - Conversion Offer

On February 2nd, 2018, the Company announced a non-brokered private placement of Gold Tokens, to accredited investors, and although subscriptions were received, it has not been closed, pending the launch of this STO. Refer https://canamexgold.com/news/non-brokered-private-placement-gold-royalty-tokens/ This private placement will remain open until the STO launch date, at which time it will be closed. Gold Token subscriptions received prior to this STO launch date, will be offered to convert into this STO at a discount to the STO price, by offering Gold Token holders an additional 25% in GOLDUSA tokens. For example, Gold Token holder has 2000 tokens, and elects to convert to GOLDUSA tokens. Gold Token holder receives 2500 (2000+25% bonus) GOLDUSA tokens, under the same terms as this STO. The Gold Tokens converted, are cancelled, and the holder is issued GOLDUSA tokens. This will provide better liquidity and transferability for Gold Token holders, by electing to convert to GOLDUSA tokens. Any valid subscriptions received for Gold Tokens prior to STO launch date, will be offered the 25% bonus to convert to GOLDUSA tokens, at the election of the Gold Token holder.

Considerations and Risks

An investment in the GOLDUSA Tokens offered via this STO, should be considered speculative due to various factors, including the nature of the industry in which the Company operates. Risk factors relating to the Company are discussed in certain of public disclosures of the Company which are available for review on the Company's SEDAR profile at www.sedar.com Risk factors should be carefully reviewed and considered by an investor before a decision is made to invest in the GOLDUSA Tokens. Relevant considerations and risks associated with the STO will be fully disclosed at the STO launch date. A general overview of considerations and risk factors is provided at Annex A.

Comments from Management

David Vincent, Chief Executive Officer of the Company: "With the commencement of the permitting process at the Bruner Gold Project, the Board of the Company has considered various financing options for project development and potential mine construction. The Board concluded that this royalty stream STO financing model, provides the best option for all stakeholders."

About the Company

Canamex Gold Corp. is a public listed company registered in British Columbia, Canada, trading on the Canadian Securities Exchange (CSE), and is engaged in fast-tracking toward development of the Bruner Gold Development Project in the prolific gold jurisdiction of Nye County, Nevada. The region is home to several producing and past-producing mines along the Walker Lane Trend. Canamex completed a positive Preliminary Economic Assessment (PEA) on the Bruner Gold Development Project in 2016. Based on additional drilling conducted on the property, the company completed an updated PEA in 2018, which increased the resources and improved the economics of the project. Canamex is now moving the Bruner Gold Project forward into permitting and development on the strength of this positive updated PEA and the improving gold price environment. The second asset is the Silverton Gold property, a gold exploration project, in Nevada, which has geological similarities to the Long Canyon gold deposit in Nevada, being mined by Newmont Mining. The Company has signed Agreements with Harmonychain AS, for Ethereum Blockchain Smart Contract Security Tokens for Gold and Silver, as an alternative means of raising capital, potentially without equity dilution. The Agreements secure the exclusive rights to various Ethereum Token domain names, ticker codes, and associated smart contracts, for Gold and Silver. The rights also extend to patents pending and trademarks associated with these security token financing models, including ChainDelivery(TM) royalty stream delivery queuing systems. Further information is available at https://canamexgold.com

Greg Hahn (CPG#7122), President & COO of the Company is the qualified person who has reviewed and approved all technical disclosures in this release.

ON BEHALF OF THE BOARD

David Vincent
Chief Executive Officer and Director

david.vincent@canamexgold.com

Mike Stark
Chairman of the Board
Contact: (604) 833-4278
mike.stark@canamexgold.com

The Canadian Securities Exchange accepts no responsibility for the adequacy or accuracy of this release.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA.

Annex A: GOLDUSA Token - Considerations and Risks

Annex A: GOLDUSA Token - Considerations and Risks

Prospective purchasers need to independently determine the suitability of investing in GOLDUSA Tokens

Prospective purchasers should determine whether an investment in GOLDUSA Tokens is appropriate in their circumstances and should consult with their legal, business and tax advisors in evaluating the consequences of an investment in the GOLDUSA Tokens. An investment in GOLDUSA Tokens is only suitable for investors who: (i) have the requisite knowledge and experience in financial and business matters to evaluate the merits and risks of an investment in GOLDUSA Tokens; (ii) have access to, and knowledge of, appropriate analytical tools to evaluate such merits and risks in the context of their financial situation; and (iii) can bear the potential economic risks of any investment in the GOLDUSA Tokens.

Equity Interest

The GOLDUSA Tokens do not give the GOLDUSA Token holder any equity or other interest in the Company equivalent to a holder of common shares including, for greater certainty, a right to participate in the profits or the distribution of assets of the Company, nor any voting rights in any meeting of the security holders of the Company. A holder of a GOLDUSA Token is only entitled to delivery of gold, on request, pursuant to the terms of the GOLDUSA Token Offering. The Company will receive cash for this GOLDUSA Token offering, and will have an obligation to meet gold delivery requests, but only when commercial production is achieved.

The Bruner Gold Project

As the Company is still in the development phase with its Bruner Gold Project, in Nevada, it has yet to produce any gold or other resources. The Company has not yet made a production decision, and is raising capital to advance the project through permitting and feasibility, the results of which are anticipated to support a production decision upon completion. Whilst the 2018 updated PEA is positive, and recommends advancing the project through permitting and feasibility, it is based upon mineral resources only, and not mineral reserves. The results of a feasibility study may differ from the results of the PEA. Therefore, a GOLDUSA Token linked to the production of such mineral resources is speculative, as there is no definitive time horizon in which commercial production of such resources could commence; given that there is no definitive feasibility study demonstrating economic production.

Equity Holders

The GOLDUSA Token effectively will be a long-term royalty interest on the Bruner Gold Project, which will require the delivery of gold if or when commercial production is achieved. Investors of Common Shares of the Company should be aware that a GOLDUSA Token holder will receive gold, if or when commercial production is achieved and after redemptions of gold are satisfied, the Company could sell any remaining resources available.

Accounting

Companies continue to look to alternative sources of finance and creative deal structures for growth and funding. These have included joint arrangements, divestments, mergers, streaming, royalty deals and offtake-linked pre-financing. New investment vehicles have emerged in this alternative finance space to take advantage of investor demand for commodity exposures and the Company demand for funding. Alternative finance, by its nature innovative and deal specific, does not find a natural 'home' in the IFRS accounting standards. Each arrangement is unique and there is no 'one size fits all'. There is no 'industry guidance' in IFRS that sets out the accounting for these structures. The legal form of this GOLDUSA Token offering, is a contract to buy a non-financial item, the specified commodity, in this case gold. Contracts to buy or sell non-financial items are normally considered executory contracts and are outside the scope of the financial instruments guidance.

The settlement is in gold bullion, but contingent on successful commercial production from the Bruner Gold project, and there is no compensation if development is unsuccessful. Therefore, this is like a Royalty model, but different in that there is no percentage of production acquired via a royalty arrangement, but a fixed volume of production that is acquired, via the GOLDUSA Tokens. GOLDUSA Token holder's right to delivery is dependent on successful development of the mine and extraction of minerals specific to the property, like a royalty.

The Company in such an arrangement does not record an obligation for future payments. Since there is no unconditional obligation to deliver cash or other monetary payment, no financial obligation arises.

The Company can be deemed to sell a proportion of resources, because a defined quantity of resources will be transferred to GOLDUSA Token holder from the Bruner Gold project. Settlement is based on gold bullion delivery and not net income, so GOLDUSA Token holder's entitlement basically represents a portion of volume of production.

GOLDUSA Token holder has no contractual right to enforce development of the mine. GOLDUSA Token holder has no contractual rights if the other party fails to develop the mine and does not start production. Therefore, GOLDUSA Token holder is exposed to risks that would not be typical in a financial instrument.

The value of the GOLDUSA Tokens relates directly to the value of gold, and fluctuations in the price of gold could materially affect an investment in the GOLDUSA Tokens

Even if the GOLDUSA Tokens are held for the long-term, that may not result in a profit, since gold markets have historically experienced extended periods of flat or declining prices, in addition to sharp fluctuations. In addition, there is no assurance that gold will maintain its long- term value in terms of purchasing power. If the price of gold declines, the Company expects the value of the GOLDUSA Tokens to decline.

Gold bullion is traded internationally and its price is generally quoted in U.S. dollars. The price of the GOLDUSA Tokens will depend on, and typically fluctuate with, the price fluctuations of gold. The price of gold may be affected at any time by many international, economic, monetary and political factors, many of which are unpredictable.

Changing tax, royalty, land and mineral ownership and leasing regulations in gold producing countries can have an impact on market functions and expectations for future gold supply. This can affect both share prices of gold mining companies and the relative prices of other commodities, which are competitive factors that may affect investor decisions in respect of investing in gold and the GOLDUSA Tokens.

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