Northquest Ltd. Announces Closing of Second Tranche of Private Placement

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TORONTO, July 14, 2014 /CNW/ - Northquest Ltd. (TSX-V:NQ) ("Northquest") is pleased to announce that it has closed the second tranche of its previously announced non-brokered private placement (the "Offering") pursuant to which Northquest has issued an aggregate of 10,000,000 units (the "Units") to Nord Gold N.V. ("Nordgold") (LSE: NORD) at a price of $0.20 per Unit to raise aggregate gross proceeds of $2,000,000. Each Unit consists of one common share of Northquest (a "Common Share") and one-half of one common share purchase warrant (each whole such warrant, a "Warrant"). Each Warrant entitles the holder thereof to acquire one additional Common Share at an exercise price of $0.27 per Common Share for a period of 24 months, provided that if, at any time after November 15, 2014, the volume weighted average price of the Common Shares on the principal stock exchange upon which the Common Shares are listed is equal to or exceeds $0.50 for 20 consecutive trading days, Northquest may accelerate the expiry date of the Warrants, in which event the Warrants will expire upon the date (the "Accelerated Expiry Date") which is 30 days following the dissemination of a press release by Northquest announcing the Accelerated Expiry Date.

All securities issued and issuable in connection with the Offering are subject to a statutory hold period expiring on November 15, 2014.

Nordgold has the right to appoint one representative to Northquest's board of directors (the "Board") and the right to participate pro rata in all future equity issuances by Northquest, subject to certain conditions.  In connection with Nordgold's appointment right, Northquest has increased the size of the Board to five and appointed Igor Klimanov, Development Project Director of Nordgold, to the Board.  Mr. Klimanov has been with Nordgold since its inception as the gold mining division of OJSC Severstal in 2007. In September 2009, he was appointed to the board of directors of High River Gold Mines Ltd. ("High River"). Previously, he was CEO of High River and Manager for Strategy and Corporate Development at Severstal Resources. Igor holds a Ph.D. from the Swiss Federal Institute of Technology and an Engineering Physics degree from the Moscow Engineering and Physics Institute.

Jon North, President and CEO of Northquest stated: "I am delighted to report the closing of this transaction with Nordgold together with the other benefits that will accrue to Northquest because of this transaction. I am also very pleased to report that in early July two Nordgold executives and a technical team of two of Nordgold's geologists completed their due diligence assessment of the Pistol Bay property in Nunavut, Canada, which included a four day site visit by the technical team. As expected, the results of the site visit were positive and we are very happy to have the confidence and approval of Nordgold and their endorsement of the Pistol Bay Gold Project.  We look forward to working with Nordgold on the development of the Pistol Bay project in the Canadian Arctic."

Nordgold currently holds 12,777,777 Common Shares (representing 22.6 % of the issued and outstanding Common Shares on a non-diluted basis) and warrants to acquire up to an additional 6,388,889 Common Shares.

Nordgold is an international pure-play gold producer established in 2007 and publicly traded on the London Stock Exchange. Nordgold has expanded rapidly through acquisitions and organic investment, achieving a rate of growth unmatched in the industry during that period. In 2013, Nordgold's gold production increased to 924,000 ounces from 717,000 ounces in 2012. Nordgold operates nine mines in Russia, Kazakhstan, Burkina Faso and Guinea. Nordgold has two development projects, four advanced exploration projects and a diverse portfolio of early exploration projects and licenses in CIS, West Africa and French Guiana. Nordgold employs over 10,000 workers.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Forward Looking Statements – Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Northquest, including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, dependence upon regulatory approvals, and the availability of financing. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

SOURCE Northquest Ltd.

For further information: Jon North, President and Chief Executive Officer, (416) 786-6348