RK Mine Finance to invest $25 mln in Continental Gold

Canadian gold producer Continental Gold Inc (TSX: CNL) has agreed to receive a US$25 million investment from RK Mine Finance, an affiliate of Australian mining finance firm Red Kite Group. The private placement deal, which will provide Red Kite with 4.6 percent of the company’s issued and outstanding common shares, was accompanied by a US$109 million strategic investment by Newmont Mining Corp, a U.S. gold producer. Toronto-based Continental said the proceeds will support the construction of its Buriticá gold project in Columbia.

PRESS RELEASE

Continental Gold Announces Strategic Investment by Newmont Mining and Investment by RK Mine Finance

TORONTO, ON–(Marketwired – May 11, 2017) – Continental Gold Inc. (TSX: CNL) (OTCQX: CGOOF) (“Continental” or the “Company”) is pleased to announce that Newmont Mining Corporation (“Newmont”) has agreed to purchase 37.38 million common shares of the Company at a price of C$4.00 per share for a total investment of US$109 million in a non-brokered private placement (the “Newmont Private Placement”). Concurrently with Newmont’s investment in Continental, RK Mine Finance Master Fund I Limited (“Red Kite”) has also agreed to purchase 8.59 million common shares of the Company on a private placement basis at a price of C$4.00 per share for a total investment of US$25 million, as contemplated in Continental’s secured project credit facility (the “Credit Facility”) with Red Kite. After giving effect to the private equity placements, Newmont and Red Kite will own approximately 19.9% and 4.6%, respectively, of the issued and outstanding common shares of Continental on a non-diluted basis. The private placements will not close before May 18, 2017 post receipt of regulatory approvals, including by the Toronto Stock Exchange.

Ari Sussman, CEO of Continental, commented: “After completing a formal process in which a number of alternatives (including multiple equity financing offers) were evaluated, we are pleased to be welcoming Newmont and Red Kite as investors in Continental. Newmont is our first choice for a cornerstone investor with its best-in-class balance sheet, excellent operating team and recent track record of delivering projects on schedule and under budget. We look forward to capitalizing on Newmont’s experience to successfully kick-off formal construction at the Buriticá project later this year. With Newmont as a partner and the completion of this financing, Continental will be well-positioned to build Buriticá and create significant value for our shareholders with first gold pour on track for early 2020.”

In connection with the Newmont Private Placement, Newmont and Continental have entered into a binding Investment Agreement, the provisions of which include:

a standstill until the Buriticá project goes into commercial production;
a twelve-month lock-up on share dispositions;
participation rights in any future equity financings to maintain pro rata ownership interest;
‘backstop rights’ to subscribe for any unsold portion of future equity financings;
a right of first offer for any non-equity financing greater than US$30 million;
the formation of joint management technical, exploration, and sustainability committees; and
one seat for a Newmont nominee on the Continental Board of Directors.

Newmont and Continental will also form a strategic alliance to evaluate opportunities to partner on exploration of Continental’s other properties in Colombia.

The CAPEX of US$389 million, outlined in the 2016 feasibility study for the Buriticá project, will be fully-funded with US$403 million of available cash and debt allocated. The Company intends to use the proceeds of Newmont’s investment to develop the Buriticá project and such proceeds satisfy the funding condition required to draw the second tranche of US$100 million under the Credit Facility. Additional financing, if required, may be fulfilled through equipment lease financing, exercise of outstanding warrants and other non-dilutive alternatives (Table 1).

(See Table I here.)

RBC Capital Markets is acting as financial advisor to the Continental Board of Directors in connection with the Newmont Private Placement.

About Continental Gold
Continental Gold Inc. is an advanced-stage exploration and development company with an extensive portfolio of 100%-owned gold projects in Colombia. Formed in April 2007, the Company — led by an international management team with a successful track record of discovering and developing large high-grade gold deposits in Latin America — is focused on advancing its fully-permitted high-grade Buriticá gold project to production with first gold pour on track for early 2020.

For information on the Buriticá project, please refer to the technical report, prepared in accordance with NI 43-101, entitled “Buriticá Project NI 43-101 Technical Report Feasibility Study, Antioquia, Colombia” and dated March 29, 2016 with an effective date of February 24, 2016, led by independent consultants JDS Energy & Mining Inc. The technical report is available on SEDAR at www.sedar.com, on the OTCQX at www.otcmarkets.com and on the Company website at www.continentalgold.com. Additional details on Continental Gold’s suite of gold exploration properties are also available at www.continentalgold.com.

CONTACT INFORMATION
For further information, please contact:

Paul Begin
Chief Financial Officer
Continental Gold Inc.
+1.416.583.5610
info@continentalgold.com
www.continentalgold.com

Renmark Financial Communications Inc.
Barry Mire Vice President
+1.416.644.2020 or +1.514.939.3989
bmire@renmarkfinancial.com
www.renmarkfinancial.com

Photo courtesy of Continental Gold Inc