Soma Gold Raises Over $15.5 Million CAD in Private Placement, Converts $10 Million CAD in Debt

Soma Gold Corp. (TSXV: SOMA), (WKN: A2P4DU), (OTC: SMAGF), a mining company with a focus on gold production in Antioquia, Colombia, has closed the first part of a non-brokered private placement, raising gross proceeds of approximately $15.513 million CAD. Additionally, the company has completed a conversion of $10 million CAD of debt into company equity under the same terms.

The transaction was structured through the sale of 13,489,566 units at a price of $1.15 CAD per unit. The offering was conducted under Canada’s Listed Issuer Financing Exemption (LIFE), a regulatory framework that allows publicly traded companies to raise capital more efficiently by reducing the extensive disclosure requirements of a full prospectus. The total raised includes a partial exercise of the “greenshoe option,” a common feature in stock offerings that allows a company to sell more shares than originally planned if investor demand is high.

A second tranche of the offering is anticipated as the company works toward the full exercise of this option. Both the placement and the debt settlement are pending final approval from the TSX Venture Exchange (TSXV).

Each unit sold in the offering consists of one common share of Soma Gold and one-half of one common share purchase warrant.

A warrant is a financial instrument that gives the holder the right, but not the obligation, to purchase a company’s stock at a fixed price (known as the “exercise price”) for a specific period. It is similar to a long-term call option. In this case, each whole warrant allows the holder to buy one additional Soma Gold common share at an exercise price of $2.00 CAD at any time within the next 36 months.

The warrants also include an Accelerated Exercise Provision. This clause stipulates that if Soma’s shares trade above $3.00 CAD for 30 consecutive days, the company can accelerate the expiry date of the warrants. Warrant holders would then have 30 days’ notice to either “exercise” their warrants (buy the shares at $2.00 CAD) or let them expire worthless. For the company, this provision is a mechanism to encourage the conversion of warrants into shares—and thus provide the company with additional cash—if the stock performs well.

“We are very pleased to have completed the first tranche of the LIFE Offering and are grateful for the continued support from both new and existing shareholders. The participation of various strategic investors further validates our long-term vision and growth strategy,” said Geoff Hampson, CEO of Soma Gold Corp.

Companies in capital-intensive sectors like mining often raise funds through private placements to finance growth without taking on additional interest-bearing debt. By issuing new shares and warrants, a company can secure capital for expansion, exploration, and operational needs.

Soma Gold has stated that the proceeds will be used for:

• Ongoing expansion of its milling operations.
• Installation of new ore sorting infrastructure.
• Accelerated exploration and development at its Nechi mine project.
• General working capital.

Simultaneously, the conversion of $10 million CAD of existing debt into equity units is a strategic move to strengthen the company’s balance sheet. This deleveraging process reduces liabilities and cash outflows that would otherwise be used for debt service payments.

In connection with the offering, Soma Gold paid approximately $930,780 CAD in cash commissions and issued 808,473 “finder’s warrants” to third parties who helped secure investors for the placement. These finder’s warrants have the same terms as the warrants included in the units.

El Limon Mine in Colombia. Photo credit: Soma Gold/X.