African Gold Group Closes Oversubscribed $11.1 Million Private Placement and Announces Results of the AGM

TORONTO, Aug. 10, 2020 (GLOBE NEWSWIRE) -- African Gold Group, Inc. (TSX-V: AGG) (“AGG” or the “Company”) is pleased to announce that it has closed, on an oversubscribed basis, the second and final tranche of its previously announced C$10,000,000 non-brokered private placement financing of common shares (the “Offering”) for gross proceeds of C$5,474,000 (the “Final Tranche”).  Together with the closing of the first tranche of the Offering, the Company raised gross proceeds of $11,084,000.

“I am very pleased to report the over-subscribed closing of the second and final tranche of the $10 million private placement with significant support from existing and new institutional investors,” says Danny Callow, Chief Executive Officer of AGG. “We will use these funds to focus on our Phase 3 exploration drilling programme, which we plan to start in early September. We have only drilled 4km of more than 30km of shear zones on our concessions, and we will be targeting rapidly increasing our resources and reserves with this programme. This additional drilling will complement the robust Definitive Feasibility Study published in July.”

Pursuant to the Final Tranche, the Company issued 21,976,000 units of the Company (each a “Unit” and collectively, the “Units”) at a price of C$0.25 per Unit for gross proceeds of C$5,494,000. Each Unit consists of one common share of the Company and one half of a common share purchase warrant (each whole common share purchase warrant, a “Warrant”).  Each Warrant will entitle the holder to acquire one additional Common Share of the Company at an exercise price of C$0.40 until August 10, 2022.

In connection with the closing of the Final Tranche, the Company has paid aggregate finder’s fees of $231,587.50 in cash and 926,350 finder’s warrants (“Finder’s Warrants”) to certain finders.  All securities issued under the Final Tranche are subject to a statutory hold period ending on December 11, 2020.

Certain directors and officers of the Company purchased or acquired direction and control over a total of 2,410,000 Units under the Final Tranche. The placement to those persons constitutes a “related party transaction” within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 -Protection of Minority Security Holders in Special Transactions (“MI 61-101”) adopted in the Policy. The Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of related party participation in the placement as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involved the related parties, exceeded 25% of the Company’s market capitalization (as determined under MI 61-101). Further details will be included in a material change report to be filed by the Company.

The securities offered under the Offering have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

AGM Results

The Company is pleased to announce that its 2020 annual and general special meeting of shareholders was held on August 6, 2020 (the “Meeting”). A total of 15,842,788 common shares, representing 15.14% of the issued and outstanding common shares of the Company, were represented at the Meeting. The following resolutions were approved at the Meeting:

• Danny Callow, Scott Eldridge, Jan-Erik Back, Pierre Pettigrew and John Begeman were elected directors of the Company for the ensuing year. 
• McGovern Hurley LLP, Chartered Accountants, were appointed as auditors of the Corporation for the ensuing year and the directors were authorized to fix the auditors’ remuneration.
• The Company’s existing stock option plan for the ensuing year, reserving for grant options to acquire up to a maximum of 10% of the issued and outstanding shares of the Corporation calculated at the time of each stock option grant, was approved.
• The special resolution to change the name of the Company from “African Gold Group, Inc.” to “Avion2 Gold Inc.”, subject to regulatory approval and TSX Venture Exchange approval, was approved.

”The Company would like to thank all of its shareholders for their continued support,” stated Mr. Callow. “In particular, as Mr. Bharti did not stand for re-election at the Meeting, I would like to thank Mr. Stan Bharti for his tireless efforts and guidance in setting the Company on the path to success.”

Option Grant

The Company has granted a total of 6,375,000 stock options to certain directors, officers and consultants of the Company pursuant to the Company’s stock option plan. All options vest immediately, and each stock option may be exercised at a price of $0.28 per option for a period of five years from the date of grant. This grant of options is subject to the approval of the TSX Venture Exchange.

Webinar

African Gold Group is hosting an investor webinar to discuss upcoming Phase 3 drilling program at our flagship Kobada Gold Project, located in Southern Mali. The investor webinar will take place on Tuesday, August 18^th, 2020 at 10:00 am (EDT). Management will be available to answer questions following the presentation. Online registration and participation details may be found at the following link:

https://us02web.zoom.us/webinar/register/WN_7Rh89Xp1TbGm64XTRZ5AAw

About African Gold Group

African Gold Group is a Canadian listed exploration and development company on the TSXV (TSX V: AGG) with its focus on developing a gold platform in West Africa. Its principal asset is the Kobada Project in southern Mali. For more information regarding African Gold Group visit our website at www.africangoldgroup.com.

For more information:

Danny Callow
President and Chief Executive Officer
+(27) 76 411 3803
Danny.Callow@africangoldgroup.com

Scott Eldridge
Non-Executive Chairman of the Board
(604) 722-5381
Scott.Eldridge@africangoldgroup.com

Daniyal Baizak 
VP Corporate Development
(416) 861-2267
Daniyal.Baizak@africangoldgroup.com

Cautionary statements

This press release contains “forward‑looking information” within the meaning of applicable Canadian securities legislation. Forward‑looking information includes, but is not limited to, statements regarding, the intended use of proceeds of the Offering, other matters relating to the Offering and the grant of stock options of the Company. Generally, forward‑looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”.  Forward‑looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of AGG to be materially different from those expressed or implied by such forward‑looking information, including but not limited to: receipt of necessary approvals; general business, economic, competitive, political and social uncertainties; future prices of mineral prices; accidents, labour disputes and shortages and other risks of the mining industry. Although AGG has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward‑looking information. AGG does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.