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Gabriel Resources Ltd (2)
Symbol GBU
Shares Issued 1,036,177,260
Close 2024-04-26 C$ 0.02
Market Cap C$ 20,723,545
Recent Sedar Documents

Gabriel finds investors for $5.57M (U.S.) placement

2024-04-26 17:10 ET - News Release

Mr. Dragos Tanase reports

US$5.575 MILLION PRIVATE PLACEMENT

Gabriel Resources Ltd. has entered into definitive subscription agreements with certain investors in connection with a non-brokered private placement of up to 377,594,750 common shares of the company at a price of two cents per common share (purchase price) for gross proceeds of up to $5,575,000 (U.S.) (approximate $7.5-million), subject to stock exchange and other approvals as applicable.

The company reserved the price for the private placement by filing a price reservation form with the TSX Venture Exchange on April 19, 2024. The number of common shares to be issued pursuant to the private placement represents approximately 36 per cent of the common shares currently issued and outstanding on a non-diluted basis.

Closing of the private placement is subject to a number of conditions, including, without limitation, approval of the TSX-V and receipt of all necessary corporate and regulatory approvals. The company may complete the private placement via the closing of multiple tranches. On receipt of approvals, it is anticipated that the private placement will close on or about May 23, 2024, or such earlier or later date as may be determined by the company, subject to satisfaction or waiver by the relevant party of the conditions of closing. There can be no assurance, however, that the private placement will close as contemplated or at all.

All securities issued under the private placement will be subject to a hold period which will expire four months and one day from the date of the applicable closing of the private placement.

Insiders of the company have subscribed for 88,049,000 common shares for gross proceeds of $1.3-million (U.S.) under the private placement. The issuance of common shares to insiders pursuant to the private placement will constitute a related party transaction within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The company intends to rely on certain exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a), 5.5(b) and 5.7(1)(a) of MI 61-101 in respect of related party participation in the private placement, as the company is not listed on specified markets and neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves the related parties, exceeds 25 per cent of the company's market capitalization (as determined under MI 61-101).

The net proceeds of the private placement will be used to finance the company's continuing strategic plans, including (i) the possibility of pursuing an annulment of the ICSID arbitration decision rendered on March 8, 2024; (ii) the maintenance of the Gabriel Group's rights and interest in Romania relating to the Rosia Montana exploitation concession and the Bucium (Rodu-Frasin and Tanita) projects; and (iii) for general working capital purposes.

The company expects to file a material change report in respect of the related party transaction less than 21 days prior to the closing of the private placement, which the company deems reasonable in the circumstances so as to be able to avail itself of the proceeds of the private placement in an expeditious manner.

The company will not pay any finder's fee in respect of the procurement of arm's-length subscribers in connection with the private placement.

About Gabriel Resources Ltd.

Gabriel is a Canadian resource company listed on the TSX Venture Exchange. The company's principal business had been the exploration and development of the Rosia Montana gold and silver project in Romania. The Rosia Montana project, one of the largest undeveloped gold deposits in Europe, is situated in the South Apuseni Mountains of Transylvania, Romania, a historic and prolific mining district that since pre-Roman times has been mined intermittently for over 2,000 years.

The exploitation licence for the Rosia Montana project is held by Rosia Montana Gold Corporation, a Romanian company in which Gabriel owns an 80.69-per-cent equity interest, with the 19.31-per-cent balance held by Minvest Rosia Montana SA, a Romanian state-owned mining company.

Following issuance of the exploitation licence in June, 1999, the group focused substantially all of its management and financial resources on the exploration, feasibility and subsequent development of the Rosia Montana project. Gabriel invested over $760-million (U.S.) to develop the Rosia Montana project and to define two promising gold, silver and porphyry copper-gold mineral deposits in the Bucium concession area located in the vicinity of Rosia Montana.

The Rosia Montana project had the potential to be a flagship development project in Romania presenting opportunities to:

  • Boost the Romanian economy through direct and indirect contributions to gross domestic product;
  • Create several thousands of much needed direct and indirect jobs in an area that has record unemployment, thus ensuring Rosia Montana's sustainable economic development;
  • Make Romania the leading producer of gold and silver in the European Union;
  • Remediate, through significant investment in infrastructure and environmental rehabilitation, the severe environmental degradation that besieges Rosia Montana's landscape today as a consequence of unregulated historical state mining operations;
  • Add further significant investments to the preservation and restoration of Rosia Montana's important cultural heritage (beyond the significant investments already made by Gabriel).

We seek Safe Harbor.

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