Gabriel Resources Ltd. (TSXV trading symbol GBU – “Gabriel” or the “Company”) is pleased to announce that it has entered into definitive subscription agreements with certain investors in connection with a non-brokered private placement (the “Private Placement”) of up to 24,782,212 common shares of the Company (“Common Share”) at a price of $0.26 per Common Share (“Purchase Price”) for gross proceeds of up to US$4.75 million (approximate $6.4 million), subject to stock exchange and other approvals as applicable.
The Purchase Price has been fixed at the closing price of the Common Shares on the trading day immediately preceding this announcement. The number of Common Shares to be issued pursuant to the Private Placement represents approximately 2.5% of the Common Shares currently issued and outstanding on a non-diluted basis.
Insiders of the Company have subscribed for 17,489,111 Common Shares for gross proceeds of US$3.35 million 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 (“MI 61-101”). 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% of the Company’s
market capitalization (as determined under MI 61-101).
The closing of the Private Placement is subject to certain conditions, including, but not limited to, the approval of the TSX Venture Exchange (“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 will close on or about June 8, 2023 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 Common Shares to be issued on closing of the Private Placement are subject to a
statutory 4-month hold period.
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 21days 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.
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.