Mr. Brian Skanderbeg of GFG reports
GFG CLOSES C$5.9 MILLION OVERSUBSCRIBED PRIVATE PLACEMENT & WELCOMES ALAMOS GOLD AS STRATEGIC INVESTOR
GFG Resources Inc. has closed the oversubscribed, non-brokered private placement financing (see news releases dated April 21, 2020, and April 29, 2020) for gross proceeds of $5,905,624. As previously disclosed, Alamos Gold Inc. has purchased securities under the offering to obtain a 9.9-per-cent interest in the company.
Pursuant to the offering, the company issued (i) 15,818,420 common shares of the company that will qualify as flow-through shares for the purposes of the Income Tax Act (Canada) at a price of 29.07 cents per share for gross proceeds of $4,598,415 and (ii) 6,880,045 non-flow-through common shares of the company at a price of 19 cents per share for gross proceeds of $1,307,209.
"The company is pleased to close the oversubscribed financing and welcomes Alamos as a strategic investor," stated Brian Skanderbeg, president and chief executive officer of GFG. "With a strong treasury and multiple highly prospective targets, we are excited to resume our 2020 exploration programs to demonstrate the potential for the Pen gold project to host multiple gold deposits next to the world-class Timmins gold camp."
John A. McCluskey, president and CEO of Alamos Gold, commented: "We are excited to be a strategic investor in GFG as they explore for new gold deposits in one of Canada's richest and most prospective gold trends. GFG has strong geological capability and has assembled a large and impressive land package. We believe they have the right approach to exploration and we wish them well as the 2020 field season gets under way."
The company expects to receive the final assay results from the remaining six drill holes from the 2020 phase 1 drill program in the coming weeks. Following the receipt and release of the assay results, the company will provide a detailed and expanded 2020 exploration plan for the Pen and Dore gold projects.
In connection with the offering, Alamos has been granted certain participation rights to maintain its pro rata ownership interest in the company.
The gross proceeds raised from the sale of the flow-through shares will be used for exploration activities in Ontario that will qualify as Canadian exploration expenses (within the meaning of the Income Tax Act (Canada)). The net proceeds raised from the sale of non-flow-through shares will be used for general working capital purposes.
The flow-through shares and non-flow-through shares are subject to a hold period and may not be traded until Sept. 7, 2020, except as permitted by applicable securities legislation, and the rules and policies of the TSX Venture Exchange.
The offering is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the final approval of the TSX-V. All securities issued will be subject to a hold period expiring four months and one day from their issuance.
About GFG Resources Inc.
GFG Resources is a North American precious metals exploration company focused on district-scale gold projects in Tier 1 mining jurisdictions, Ontario and Wyoming.
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