Gabriel Resources announces US $20M financing

News Release

TSXV Trading Symbol: GBU
December 13, 2018

US$20 Million Private Placement

Gabriel Resources Ltd. (“Gabriel” or the “Company”) is pleased to announce that it has entered into definitive subscription agreements with certain existing securityholders in connection with a non-brokered private placement (the “Private Placement”) of up to 106,425,846 units (the “Units”) of the Company at a price of $0.2475 per Unit (“Purchase Price”) for gross proceeds of up to US$20 million (approximately $26.3 million), subject to stock exchange and other approvals as applicable.

Each Unit will consist of one common share (“Common Share”) of the Company (“New Shares”) and one Common Share purchase warrant (“New Warrants”). The Purchase Price represents a 25% discount to the closing price of the Common Shares on the trading day immediately preceding this announcement of $0.33 (“Market Price”). Each New Warrant will entitle the holder to acquire one Common Share at an exercise price of $0.49, representing a premium of approximately 50% to the Market Price, at any time prior to the date that is five (5) years following the closing of the Private Placement.

The aggregate number of Common Shares to be issued pursuant to the Private Placement (assuming exercise of all of the New Warrants) is 212,851,692, representing approximately 55.4% of the Common Shares currently issued and outstanding on a non-diluted basis.

It is anticipated that insiders of the Company will subscribe for up to 55,213,059 Units for gross proceeds of US$10.37 million under the Private Placement. The issuance of Units 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 (“MI 61-101”).

The Company intends to rely on the “financial hardship” exemption from the minority shareholder approval requirement available under Section 5.7(1)(e) of MI 61-101 in respect of such insider participation. Accordingly, “independent directors” of the Company, as defined in MI 61-101, have reviewed and approved the terms of the proposed Private Placement and, after careful consideration, determined that the Company is in serious financial difficulty, the Private Placement is designed to improve the financial position of the Company, and the terms of the Private Placement are reasonable in the circumstances of the Company.

The closing of the Private Placement is subject to certain conditions, including, but not limited to, the approval of the TSX Venture Exchange and the receipt of all other applicable approvals. Accordingly, there is no assurance that the Company will be successful in completing the Private Placement. On receipt of approvals it is anticipated that the Private Placement may close on or about December 31, 2018 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.

The securities being issued pursuant to the Private Placement will be subject to a hold period expiring four months and one day from the date of issuance in accordance with applicable Canadian securities law.
Private Placement
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The Company is progressing with its arbitration case against Romania before the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID Arbitration”) and intends to use the proceeds of the Private Placement to finance the costs of the ongoing ICSID Arbitration and for general working capital requirements.

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 securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and accordingly may not be offered or sold within the United States or to “U.S. persons”, as such term is defined in Regulation S promulgated under the U.S. Securities Act (“U.S. Persons”), except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company’s securities to, or for the account of benefit of, persons in the United States or U.S. Persons.

For information on this press release, please contact:
Dragos Tanase
President & CEO
Phone: +44 7799 469694
Richard Brown
Chief Commercial Officer
Phone: +44 7748 760276
richard.brown@gabrielresources.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About Gabriel

Gabriel is a Canadian resource company listed on the TSX Venture Exchange. The Company’s principal focus has been the exploration and development of the Roșia Montană gold and silver project in Romania (“Roşia Montană Project”). The Roşia Montană Project, one of the largest undeveloped gold deposits in Europe, is situated in the South Apuseni Mountains of Transylvania, Romania, an historic and prolific mining district that since pre-Roman times has been mined intermittently for over 2,000 years. The exploitation license (“License”) for the Roşia Montană Project is held by Roșia Montană Gold Corporation S.A., a Romanian company in which Gabriel owns an 80.69% equity interest, with the 19.31% balance held by Minvest Roșia Montană S.A., a Romanian state-owned mining company. It is anticipated that the Roşia Montană Project would bring over US$24 billion (at US$1,200/oz gold) to Romania as potential direct and indirect contribution to GDP and generate thousands of employment opportunities.

Upon obtaining the License in June 1999, the Group (as defined below) focused substantially all of their management and financial resources on the exploration, feasibility and subsequent development of the Roşia Montană Project. Despite the Company’s fulfilment of its legal obligations and its development of the Roşia Montană Project as a high-quality, sustainable and environmentally-responsible mining project, using best available techniques, Romania has blocked and prevented implementation of the Roşia Montană Project without due process and without compensation. Accordingly, the Company’s current core focus is the ICSID Arbitration. For more information please visit the Company’s website at www.gabrielresources.com.

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