FINANCE – Northquest Ltd. June 9 announced that Nord Gold N.V. has agreed to purchase about 12.78 million units of Northquest for aggregate proceeds of C$2.5 million, which would provide the Russia-based mining company a 22.3 percent stake in the Canadian junior. The private placement is to be carried out in two tranches. In the first tranche, Northquest has agreed to issue 2,777,777 units C18 cents per unit. Each first tranche unit will consist of one common share of the Northquest and one-half of a purchase warrant. Each warrant allows the holder to acquire one additional common share at C24 cents for a period of 24 months from the date of issuance, subject to accelerated expiration. Other subscribers, including Northquest insiders, may purchase up to 1 million first tranche units. In the second tranche of the offering, Northquest has agreed to issue 10 million units to Nordgold or its nominee at C20 cents per unit. Each second tranche unit will consist of one common share of the Northquest and one-half of a purchase warrant. Each warrant allows the holder to acquire one additional common share at C27 cents for a period of 24 months from the date of issuance, subject to accelerated expiration. Concurrently with the closing of the second tranche, Nordgold will have the right to appoint one representative to Northquest’s board of directors and the right to participate pro rata in all equity issuances by Northquest, subject to certain conditions. The first tranche is expected to occur in one or more closings, the first of which is expected to close around June 12. The second tranche, which is subject to a site visit and due diligence by Nord Gold, is anticipated to close around July 14. Northquest intends to use the gross proceeds of offering for further exploration of its Pistol Bay gold project in eastern Nunavut and for general and administrative expenses. “We continue to look for projects that complement and enhance our existing reserves base and we believe we have found in Pistol Bay a very promising asset with real potential,” said Nordgold CEO Nikolai Zelenski. “The Pistol Bay project meets our strict investment criteria – namely a potentially high-grade deposit with a local partner, which has strong geological expertise in the region. Nordgold has a proven ability to develop new projects from scratch and we look forward to working with Northquest to progress this exciting project.” Nordgold – an international emerging-markets gold producer established in 2007 and publicly traded on the London Stock Exchange – has expanded rapidly through acquisitions and organic investment, achieving a rate of growth unmatched in the industry during that period. In 2013, Nordgold’s gold production increased to 924,000 ounces from 717,000 ounces in 2012. Nordgold operates nine mines in Russia, Kazakhstan, Burkina Faso and Guinea. Nordgold has two development projects, four advanced exploration projects and a diverse portfolio of early exploration projects and licenses in CIS, West Africa and French Guiana. Assuming that the additional units are issued and no other changes to Northquest’s issued and outstanding common shares, following the closing of the second tranche, Nordgold will hold 22.3 percent of Northquest’s issued and outstanding common shares plus 6,388,889 warrants.