AUGG Augusta Gold Corporation (QB)

Item 1.01 Entry into a Material Definitive Agreement.

On January 20, 2023, Augusta Gold Corp. (the “Company”) closed its previously announced “bought deal” underwritten offering (the “Offering”) of 6,725,147 units (“Units”) of the Company at a price of Cdn.$1.71 per Unit, including the units issued pursuant to the full exercise of the over-allotment option by the underwriters in the Offering (the “Underwriters”), for aggregate gross proceeds of approximately Cdn.$11.5 million before deducting Offering expenses.

In connection with the closing of the Offering, the Company entered into a Warrant Indenture dated January 20, 2023 (the “Warrant Indenture”) with Endeavor Trust Corporation, as the warrant agent, pursuant to which the Company issued Warrants to purchase up to a maximum of 3,362,573 Warrant Shares. Each Warrant is exercisable at any time after January 20, 2023, and prior to January 20, 2026.

The Warrant Indenture provides for the creation of the Warrants underlying the Units.

The Warrant Indenture sets forth the exercise terms of the Warrants, the mechanics for the exercise of the Warrants, and the mechanics for issuance of the Warrant Shares. The Warrant Indenture further sets forth the rights of each Warrant holder in respect to the Warrants.

The Warrant Indenture contains customary representations, warranties, and indemnification provisions.

As compensation in connection to the Offering, the Company paid the Underwriters cash compensation equal to 5.0% of the aggregate gross proceeds of the Offering and issued to the Underwriters 336,257 common stock purchase warrants (the “Compensation Warrants”). Each Compensation Warrant is exercisable for one share of common stock (each, a “Compensation Warrant Share”) for a period of 12 months following the closing of the Offering at a price of Cdn.$1.71 per Compensation Warrant Share. 

Copies of the Warrant Indenture, and Compensation Warrant are filed hereto as Exhibits 4.1, and 4.2, respectively. The foregoing descriptions of the terms of the Warrant Indenture and Compensation Warrants do not purport to be complete and are subject to and qualified in their entirety by reference to such exhibits. Copies of the opinion of Dorsey & Whitney LLP and Cassels Brock & Blackwell LLP relating to the legality of the issuance and sale of the Units and Compensation Warrants in the Offering are attached hereto as Exhibit 5.1 and 5.2, respectively. The Warrant Indenture and form of Compensation Warrant have been filed with this Current Report on Form 8-K to provide investors and security holders with information regarding their terms. They are not intended to provide any other factual information about the Company. The representations, warranties and covenants contained in the Warrant Indenture and Compensation Warrants, where applicable, were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements, and may be subject to limitations agreed upon by the contracting parties.