Integra Gold Announces $14.6 Million Investment by Eldorado Gold

On August 18, Integra Gold Corp. entered into a share purchase agreement with Eldorado Gold Corp. whereby Eldorado will make a $14.6-million strategic investment in Integra by way of a non-brokered private placement of common shares of Integra. As a result of the private placement, Eldorado will hold 15.0 percent of Integra's issued and outstanding common shares on an undiluted basis.

Under the terms of the share purchase agreement, Eldorado will purchase a total of 52,058,200 common shares of Integra at a price of 28 cents per share for gross proceeds of $14,576,296. The subscription price represents a 5.7-percent premium to the closing price and 11.0-percent premium to the 20-day volume-weighted average price of Integra on the TSX Venture Exchange as of Aug. 17, 2015.

"Recent drill results from the Lamaque project, and specifically the Triangle zone, continue to demonstrate the excellent upside potential of the deposit, which is situated in the world-class gold district of Val d'Or, Que. The Eldorado investment allows us to substantially increase our current program with the objective of enhancing our confidence in existing mineral resources and adding to an already substantial gold resource base. With five drill rigs operational by the end of the month and almost 100,000 metres of planned drilling in 2015, this investment provides us with the financial resources to more rapidly move forward with an active fall and winter drill program which is anticipated to include 10 operating drills at the project," commented Stephen de Jong, president and chief executive officer of Integra. "Eldorado is a leading gold producer with excellent technical expertise and proven capabilities in developing mines across the globe, and their investment in Integra represents a major endorsement of the Lamaque project and the team behind it. This investment brings the company's cash balance to $27-million which enables us to continue to execute on our exploration and development plans as we build value for our shareholders."

The company intends to use the proceeds of the private placement for the continued exploration and development of the Triangle zone at the Lamaque project, including exploration programs and economic studies and for general corporate purposes. Eldorado will also have the following rights as set out in an investor rights agreement between the company and Eldorado which will take effect upon the closing of the private placement. These rights will remain in effect so long as Eldorado maintains ownership of greater than 10.0 percent of the issued and outstanding common shares (excluding shares issued in future option and warrant exercises or in a third party acquisition):

Eldorado will have the right to appoint one member to a newly created technical committee, which will comprise a total of three members, two of which will be from Integra management, and will have the purpose of reviewing and providing recommendations in an advisory capacity in respect of exploration activities on the Lamaque project. Upon Eldorado increasing its ownership to 19.0 percent or more, it will have the right to appoint one director to Integra's board of directors.

Eldorado will have the right to participate in future equity offerings by the company. In any offering, Eldorado will be entitled to subscribe for securities equal to the number required to maintain the greater of 15 percent of Integra's share capital and Eldorado's pro rata ownership interest prior to the offering. In the event Eldorado declines to participate in an equity offering or disposes of any common shares, its participation right will be limited to maintaining its pro rata interest prior to the date of the offering.

The closing of the private placement is expected to occur on or about Aug. 31, 2015, and is subject to all necessary regulatory approvals, including approval of the TSX Venture Exchange. The common shares issuable pursuant to the private placement will be subject to a statutory four-month hold period.

Comments:

(ICG.V, C$0.265, 286.9M SO, 349.3M FD, C$76.0M MCap, www.integragold.com)

It’s nice to see Integra jump on this news, but more important that Eldorado is signaling its confidence in and valuation of Integra’s Lamaque project. The premium is modest, but there are no warrants attached, so the dilution is over and done with. So far, the company has done a stellar job turning cash into high-grade ounces in the ground, and we expect more of the same going forward.