Majestic Gold Corp. Announces Listing of Subsidiary Persistence Resources on HKEX
Vancouver, Dec. 21, 2023 - Majestic Gold Corp. ("Majestic" or the "Company") (TSXV:MJS) (FSE:A0BK1D) is pleased to announce the successful listing of Majestic's 70.5% owned subsidiary, Persistence Resources Group Ltd. ("Persistence"), being the third largest gold miner(1) in Shandong Province, China, on the Main Board of The Stock Exchange of Hong Kong Limited (the "HKEX") under stock code 02489. Persistence offered 25% of its total issued and paid-up shares ("Shares") for subscription by public in Hong Kong and international placing under the global offering . The HKEX listing represents a significant milestone for Persistence's entry into the Hong Kong capital market. Going forward, Persistence aims to capitalize on growth opportunities in the gold mining market leveraging Hong Kong's international capital platform and prestige associated with the HKEX listing. Persistence is committed to enhancing its technological and operational management capabilities, to strengthen its competitiveness in the market, and aspiring to become a benchmark for gold companies in Yantai, Shandong Province, ultimately rewarding its shareholders and investors.
Persistence successfully conducted a global offering of the Shares by way of issuing 500,000,000 shares at HK$0.55 (CAD $0.0943) per share, generating gross proceeds of HK$275 million (approximately CAD$47.2 million). After deducting the underwriting fees and other estimated expenses related to the global offering, net proceeds are approximately HK$217 million (approximately CAD$37.2 million).
The allocation of net proceeds by Persistence will be as follows: 55.0% will be allocated to acquisition of gold mining assets, 20.4% towards its mine optimization plan; and 12.6%, 10.0%, and 2.0% for the repayment of existing bank loan guarantees, working capital, and additional exploration activities to upgrade gold reserves, respectively.
Allocation of Proceeds
Selective acquisition of gold mining assets to increase market share
Persistence will direct 55.0% of net proceeds towards the selective acquisition of surrounding high-quality gold mining assets whereby expanding its mineral resources and market share. The criteria for acquisition targets include mines located in Shandong Province with potential gold resources of at least 10 tonnes at a depth of less than 1,000 meters, a life of mine ("LoM") of more than five years and a payback period of less than 10 years.
Mine optimization plan
Persistence will dedicate 20.4% of net proceeds to implementing the mine optimization plan, involving the expansion the mining surface area around 150 meters south of the existing boundary of Songjiagou Open-Pit Mine so as to increase the pit opening area to 0.46 square meters and to deepen the depth of the pit to -171 meters above sea level.
Working capital, and bank loan repayment
Approximately 12.6% of net proceeds will be utilized to repay existing bank loans and approximately 10% will be allocated for working capital purposes.
Additional exploration at existing mine area to increase gold reserves
2.0% will be allocated for additional exploration activities at the Songjiagou Open-Pit Mine area. Persistence aims to identify additional mineral resources in the unmined areas adjacent to and below the current pit opening area covered by the Songjiagou Open-Pit Mine mining license. Exploration plans include 26 drilling surveys in three phases at various depths for a total of over 6,500 meters, to identify additional gold mineral resources.
As previously announced, Persistence issued its Prospectus in respect of its listing of shares on the HKEX on December 14, 2023. Through its subsidiary, Persistence owns a 75% indirect interest in Yantai Zhongjia Mining Co. Ltd., which operates the Songjiagou Gold Mine (the "Property") located in the eastern part of the Shandong Province, China. Majestic owned 94% of Persistence prior to the issuance of the Shares, Majestic now owns approximately 70.5% of the total issued and paid-up shares of Persistence, pursuant to and at time listing of the Shares on the HKEX, Persistence could issue additional shares, which may further dilute Majestic's cumulative effective interest in the Property to less than 50%. However, considering the greater valuation and improved access to capital the HKEX listing may afford Persistence for its future needs, the Board of Directors of Majestic, with the advice from its legal and financial advisors, unanimously approved the listing.
Majestic confirms that all necessary approvals, including those from the TSX.V and HKEX have been obtained for the successful closing of the listing.
About Majestic Gold
Currently focused in China, Majestic Gold Corp. is a British Columbia based company engaged in commercial gold production at the Songjiagou Gold Mine in eastern Shandong Province, China. Majestic is the third largest gold producing mining company (1) in Shandong Province. Additional information on the Company and its projects is available at www.sedarplus.ca and on the Company's website at www.majesticgold.com.
(1) Source: Frost & Sullivan Report, based on mine production volume in 2022
For further information, please contact:
James Mackie, CFO and Corporate Secretary
Telephone: (604) 560-9060
Email: info@majesticgold.com
Website: www.majesticgold.com
Majestic invites the public to visit its website at www.majesticgold.com or e-mail the company at info@majesticgold.com to be added to the company's e-mail list for press releases and updates.
Cautionary Notes
Certain statements contained herein may constitute forward?looking statements and are made pursuant to the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities laws. Forward?looking statements are statements which relate to future events. Such statements include estimates, forecasts, and statements as to management's expectations with respect to, among other things, business and financial prospects, financial multiples and accretion estimates, future trends, plans, strategies, objectives, and expectations, including with respect to production, exploration drilling, reserves and resources, exploitation activities and events or future operations. Information inferred from the interpretation of drilling results and information concerning mineral resource estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when, and if, a project is actually developed.
In some cases, you can identify forward?looking statements by terminology such as "may", "should", "expects", "plans, "anticipates", believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, level of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward?looking statements.
While these forward?looking statements, and any assumptions upon which they are based, are made in good faith, and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions, or other future performance suggestions herein. Except as required by applicable law, Majestic does not intend to update any forward?looking statements to conform these statements to actual results.
