Loyalist Exploration Limited (CSE:PNGC) has taken decisive steps to strengthen its financial position and focus on advancing its flagship Tully Gold Project in Timmins, Ontario. The company announced the termination of its previously announced non-brokered private placement (the "Offering"), confirming that no further tranches will be completed. The first tranche of the Offering, which closed on August 31, 2026, raised $1,000,000 through the sale of 25,000,000 common shares at $0.04 per share. This first tranche represents the final closing of the Offering.
In a separate but related move, Loyalist completed a shares for debt transaction, settling $113,285.00 of outstanding indebtedness through the issuance of 2,832,125 common shares at $0.04 per share. Notably, $45,000 of that debt was owed to Errol Farr, President, CEO, and director, and Leonard Mackenzie, Vice President of Exploration, who are considered "related parties" under Multilateral Instrument 61-101. The company relied on exemptions from formal valuation and minority approval requirements, as the fair market value of the transaction did not exceed 25% of Loyalist's market capitalization.
The proceeds from the first tranche are earmarked for completing ongoing NI 43-101 technical reports, including a resource estimate and preliminary economic assessment on the Tully project, as well as production permitting work, property payments, and general working capital. Errol Farr commented, "We are grateful for the support of our subscribers, which has enabled us to achieve our objective of funding the ongoing Tully PEA. With this capital in place, we continue to execute on our strategy of becoming the next gold producer in the Timmins camp by systematically advancing Tully toward a fully funded and permitted mining operation."
The significance of these announcements lies in the company's ability to clean up its balance sheet while securing necessary funding for its core asset. By converting debt to equity, Loyalist reduces its cash obligations and aligns the interests of insiders with shareholders, as Farr and Mackenzie now hold additional shares. The termination of the private placement indicates that the company has raised sufficient capital for its immediate objectives, avoiding further dilution. The focus now shifts to the Tully PEA, a critical milestone that will provide an economic assessment of the project and guide future development decisions. With gold prices remaining volatile, advancing a high-quality project in a prolific mining camp like Timmins could position Loyalist as an attractive investment opportunity. The company's strategy to become the next gold producer in the region is ambitious but supported by the Tully project's existing resource estimate and favorable infrastructure.
The securities issued in both the first tranche and the shares for debt transaction are subject to a four-month-and-one-day hold period. In connection with the first tranche, Loyalist paid finder's fees of $37,200 in cash to Haywood Securities Inc. and issued 930,000 non-transferable broker warrants, each exercisable at $0.075 per common share until August 31, 2028. The company also reminded that the securities have not been registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an exemption.
For further details, the original release can be viewed on www.newmediawire.com. As Loyalist moves forward with its exploration and development plans, the market will be watching closely to see if the Tully project can deliver on its promise.
