The Company's board of directors has made an overall assessment and carefully considered the possibility of raising capital through a rights issue. The conclusion of this assessment is that the Directed Share Issue is objectively the best alternative for the Company and its shareholders. The reasons for that, and for deviating from the shareholders preferential rights, are to diversify the Company's shareholder base with long-term strategic investors which will strengthen the Company's shareholder base and to carry out a capital raise in a time- and cost-efficient manner to finance further exploration and development activities. The share issue is directed to long-term strategic investors, including Rupert Resources, that bring industry knowledge and expertise to the Company, which the board of directors place great importance to for the development of Northgold’s long-term value. Implementing a rights issue in the current market conditions would entail a risk that the Company fails to meet its capital needs and by so fail to maintain an optimal capital structure. The board of directors has also considered the high number of rights issues that has been carried out on Nasdaq First North Growth Market recently, and that the transaction costs for a rights issue, such as advisory fees and underwriting compensation, would be unproportional to the limited size of the required capital.

In total, 831,120 shares have been subscribed by current shareholders and new investors, including the seller of Northern Aspect Resources Oy, Rupert Resources, that has committed to invest MSEK 2.8 in Northgold in the Directed Share Issue. The subscription price amounts to SEK 12.50 per share and Northgold will receive MSEK 10.4 before transaction costs from the Directed Share Issue. The subscription price corresponds to a discount of approximately 16.1 percent to the Company’s closing price on Nasdaq First North Growth Market on February 8, 2023, and a discount of approximately 14.0 percent to the volume-weighted average price (VWAP) in Northgold’s share during the period from and including January 19, 2023, until and including February 8, 2023. The subscription price in the Directed Share Issue has been established through arms’ length negotiations with a number of investors taking the prevailing market conditions into account. Thus, the Company’s board of directors is of the opinion that the subscription price has been set at market terms and accurately reflects current market conditions and demand.

The proceeds from the Directed Share Issue will be used to fund systematic exploration and development activities at the Kopsa and Kiimala Trend projects into 2024, and also to fund the additional nearer-term financial responsibilities associated with the acquisition of Northern Aspect Resources Oy and the Hirsikangas project, including some additional tenement fees, a core shack lease, and the salary of a senior geologist employee.

Mitch Vanderydt, Northgold CEO, comments:

“This cash injection anchored by our new major shareholder Rupert Resources strengthens our cash position, increases Rupert’s stake in Northgold to 9.1%, and will cover exploration and development activities across our projects into next year, including the new financial responsibilities associated with the acquisition of the Hirsikangas gold project, which certainly create some cost synergies given the project’s close proximity to our other two projects in the belt. And we are pleased to combine this strengthened cash position with the additional sweetener of a share lock-up agreements for board, management and five largest shareholders, which bolsters their continued support of the Company.”

Share capital and dilution

Taking into account the directed set-off issue to Rupert Resources announced in a separate press release earlier today, the Company’s share capital will increase by approximately SEK 58,529.41 to approximately SEK 862,095.75. The number of shares and votes in the Company will increase by 831,120 shares and votes to a total of 12,241,794 shares and votes. The dilution from the Directed Share Issue amounts to approximately 6.79 percent of the capital and votes of the Company.

Lock-up undertakings

Rupert Resources, Northgold’s five current largest shareholders, all board members and all executive management members have, in relation to Augment and with customary exceptions, undertaken not to sell, transfer, or otherwise dispose of their securities in the Company for a period of six months, beginning today.

The lock-up undertakings amount to 67.0 percent of the outstanding Northgold shares (based on the number of shares in Northgold after the acquisition of Northern Aspect Resources Oy and the Directed Share Issue), which is broken down by shareholder below.

Advisors

Augment Partners AB is financial advisor and Advokatfirman Schjødt is legal advisor to Northgold in connection to the Directed Share Issue.

For additional information, please contact the CEO:

“Mitch Vanderydt”
Mitchell J. Vanderydt, P.Eng, MBA
Email: ir@northgoldab.com
Website: www.northgoldab.com
Follow us: www.linkedin.com/company/northgold

About Northgold

Northgold is a Swedish gold exploration and development Company with multiple resource-stage projects in the Middle Ostrobothnia Gold Belt (MOGB) of Central Finland, including the Kopsa Gold-Copper project and the Kiimala Trend Gold project. The Company strives to find and extract gold from under-prospected areas in Finland. More information is available on www.northgoldab.com.

Augment Partners AB, tel. +46 8-604 22 55 info@augment.se, is acting as the Company's Certified Adviser.

Important information

Publication or distribution of this press release may in some jurisdictions be subject to statutory and legal restrictions and persons in those jurisdictions where this press release has been published or distributed should inform themselves about and observe such restrictions. The information in this press release does not constitute an offer to acquire, subscribe or otherwise trade in shares or other securities in Northgold.

This press release does not constitute an offer to acquire securities in the United States. The securities mentioned herein may not be sold in the United States without registration in accordance with the Securities Act of 1933 or without the application of an exception to such registration. The information in this press release may not be released, published, reproduced or distributed in or to the United States, Australia, Canada, New Zealand, Hong Kong, Japan, Switzerland, Singapore, South Africa, or any other country or jurisdiction where such action is not permitted, or such action is subject to legal restrictions or would require further registration or other measures than required by Swedish law. Measures contrary to this instruction may constitute a breach of applicable securities laws.

Forward-looking statements

This announcement may contain certain forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “expect”, “anticipate”, “intends”, “estimate”, “will”, “may”, “continue”, “should” and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies, and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies, and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The information, opinions and forward-looking statements contained in this communication speak only as at its date and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm or release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.

The information, estimates, and forward-looking statements contained in this announcement are valid only as of the date of this announcement and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or publish any adjustments regarding any forward-looking statements to reflect events that occur or circumstances that arise regarding the content of this notice.