Toronto-listed and Ghana-based Xtra Gold Resources, has received a green light from the Toronto Stock Exchange (TSX) to proceed with a normal course issuer bid to purchase up to 4,000,000 common shares of the Company.
This is in response to a notice it filed with the TSX, intended to renew its prior normal course issuer bid for a further one year period, commencing this year because it believes the current market price of its common shares may not fully reflect the underlying value of the Company’s business and its future business prospects.
The Company believes that “the purchase of common shares for cancellation is in the best interests of the Company’s shareholders” as it will increase the respective proportionate shareholdings of the shareholders and therefore increase the respective equity interest in the Company for all remaining shareholders.
As at March 9, 2022, the Company had 46,585,917 common shares issued and outstanding. The 4,000,000 common shares that may be purchased by the Company under the 2022 Bid represent approximately 10% of the public float (41,587,062 as at March 9, 2022) of the Company.
Xtra Gold’s chief executive officer, James Longshore, said:
“The 2022 Bid will commence on March 16, 2022 and terminate on March 15, 2023 or at such earlier date in the event that the number of shares sought in the 2022 Bid has been repurchased. The Company reserves the right to terminate the 2022 Bid earlier if it feels that it is appropriate to do so.
“All shares will be purchased on the open market through the facilities of the Toronto Stock Exchange (TSX), and payment for the common shares will be in accordance with TSX policies. The price paid for the common shares will be the market price at the time of purchase. Purchasing may be suspended at any time, and no purchases will be made other than by means of open market transactions during the term of the 2022 Bid.”James Longshore
Maximum Shares to be Paid on a Daily Basis
On a daily basis, the maximum number of common shares that may be purchased is 3,502 common shares representing 25 per cent of the average daily trading volume of 14,009 for the last six calendar months.
However, there is an exception to the rule. That is, where purchases are made in accordance with ‘block purchases’, exemptions under TSX policies will apply. The common shares purchased by the Company will therefore be cancelled.
For the purpose of completing this transaction successfully, the Company has engaged Haywood Securities Inc. to act as broker through which the 2022 Bid will be conducted. Meanwhile, previous purchases were made by the Company under a prior normal course issuer bid (2021 Issuer Bid) the results of which are noted hereunder.
Recall that, pursuant to a previous notice of intention to conduct a normal course issuer bid (2021 issuer bid), the Company sought and received approval from the TSX to purchase up to 4,000,000 common Shares for the period of March 16, 2021 to March 15, 2022. As at February 28, 2022, the Company had purchased 414,000 Common Shares on the open market at an average purchase price of $0.995 per share.