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Private Placement
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PRESS RELEASE
FOR IMMEDIATE 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, b ut 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 relev ant 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.
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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 t han 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
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.
Further Information
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 pr oject 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 Transylvani a, 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.
Forward-looking Statements
This press release contains “forward -looking information” (also referred to as “forward -looking statements”) within the meaning of applicable
Canadian securities legislation. Forward -looking statements are provided for the purpose of providing information about management’s current
expectations and plans and allowing investors and others to get a better understanding of the Company’s operating environment . All statements,
other than statements of historical fact, are forward-looking statements.
In this press release, forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered
reasonable by the Company at this time, are inherently subject to significant business, economic and competitive uncertaintie s and contingencies
that may cause the Company’s actual financial results, performance, or achievements to be materially different from those expre ssed or implied
herein. Some of the material factors or assumptions used to develop forward -looking statements include, without lim itation, the uncertainties
associated with: the ICSID Arbitration, actions by the Romanian Government, conditions or events impacting the Company’s abil ity to fund its
operations (including but not limited to the completion of further funding noted above) or service its debt, exploration, development and operation of
mining properties and the overall impact of misjudgments made in good faith in the course of preparing forward-looking information.
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Forward-looking statements involve risks, uncertainties, assumptions, and other factors including those set out below, that may never materialize,
prove incorrect or materialize other than as currently contemplated which could cause the Company’s results to differ materially from those expressed
or implied by such forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as “expects”,
“is expected”, “is of the view”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”,
“potential”, “possible” or variations thereof or stating that certain actions, events, conditions or results “may”, “could”, “would”, “should”, “might” or
“will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of fact and may be forward-
looking statements.
Numerous factors could cause actual results to differ materially from those in the forward-looking statements, including without limitation:
• delay or extension to the duration of the ICSID Arbitration;
• required disclosure, costs, process and outcome of the ICSID Arbitration against Romania;
• changes in the liquidity and capital resources of Gabriel, and the group of companies of which it is directly or indirectly parent (“Group”);
• access to funding to support the Group’s continued ICSID Arbitration and/or operating activities in the future;
• equity dilution resulting from the conversion or exercise of new or existing securities in part or in whole to Common Shares;
• the ability of the Company to maintain a continued listing on the TSX Venture Exchange or any regulated public market for trading securities;
• the impact on business strategy and its implementation in Romania of: unforeseen historic acts of corruption, uncertain fiscal investigations;
uncertain legal enforcement both for and against the Group and political and social instability;
• regulatory, political and economic risks associated with operating in a foreign jurisdiction including changes in laws, gover nments and legal
regimes and interpretation of existing and future fiscal and other legislation;
• volatility of currency exchange rates, metal prices and metal production;
• the availability and continued participation in operational or other matters pertaining to the Group of certain key employees and consultants;
and
• risks normally incident to the exploration, development and operation of mining properties.
This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements.
Investors are cautioned not to put undue reliance on forward-looking statements, and investors should not infer that there has been no change in the
Company’s affairs since the date of this press release that would warrant any modification of any forward-looking statement made in this document,
other documents periodically filed with or furnished to the relevant securities regulators or documents presented on the Comp any’s website. All
subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their
entirety by this notice. The Company disclaims any intent or obligation to update publicly or otherwise revise any forward-looking statements or the
foregoing list of assumptions o r factors, whether as a result of new information, future events or otherwise, subject to the Company’s disclosure
obligations under applicable Canadian securities regulations. Investors are urged to read the Company’s filings with Canadian securities regulatory
agencies which can be viewed online at www.sedar.com.
ENDS