Gabriel Resources Ltd. (TSX-V:GBU) is pleased to announce an initial closing of the non-brokered private placement previously announced on August 6, 2019 of up to 81,730,233 units of the Company at a price of $0.3225 per Unit for gross proceeds of up to US$20 million (approximately $26.4 million).

Each Unit consists of one common share of the Company and one Common Share purchase warrant. Each New Warrant entitles the holder to acquire one Common Share at an exercise price of $0.645 at any time prior to August 23, 2024.

In the initial closing, a total of 76,504,263 Units were issued to subscribers to raise aggregate gross proceeds of US$18.7 million (approximately $24.7 million). The New Shares and New Warrants issued in the initial closing of the Private Placement are subject to a statutory 4-month hold period expiring December 24, 2019.

The proceeds from the Private Placement will be used by the Company to finance the costs of its continuing arbitration case against Romania before the World Bank’s International Centre for Settlement of Investment Disputes and for general working capital requirements.

The closing of the remainder of the Private Placement is subject to certain conditions and applicable approvals. It is anticipated that the remainder of the Private Placement may close on or about August 30, 2019 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.

Securities Currently In Issue

As a result of the initial closing of the Private Placement the Company has the following securities in issue:

• 567,671,723 Common Shares issued and outstanding;
• 76,504,263 Common Share purchase warrants which are exercisable at a price of $0.645 at any time prior to August 23, 2024;
• 25,723,372 Common Share purchase warrants which are exercisable at a price of $0.49 at any time prior to January 15, 2024;
• 80,702,475 Common Share purchase warrants which are exercisable at a price of $0.49 at any time prior to December 21, 2023;
• 111,536,250 Common Share purchase warrants which are exercisable at a price of $0.46 at any time prior to June 30, 2021;
• $95,625,000 of convertible subordinated unsecured notes, with an annual coupon of 0.025%, a conversion price of $0.3105, and a maturity date of June 30, 2021. At maturity, the Company will have the ability to repay the notes through the issuance of Common Shares; and
• 95,625 arbitration value rights (“AVRs”), comprising:
  • 55,000 AVRs entitling the holders to a pro rata share of 7.5% of any proceeds arising from any monies received by the Company and/or any of its affiliates pursuant to any settlement or arbitral awards irrevocably made in its favour in relation to the ICSID Arbitration (“ICSID Award”), subject to a maximum aggregate entitlement of $175 million among all holders of such AVRs; and
  • 40,625 AVRs entitling the holders to a pro rata share of 5.54% of any proceeds arising from any ICSID Award, subject to a maximum aggregate entitlement of $129.3 million among all holders of such AVRs.

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.

The Private Placement was conditionally approved by the TSX Venture Exchange on August 12, 2019. The Private Placement remains subject to final acceptance by the Exchange and the receipt of all other applicable approvals.

Further detail regarding the Private Placement can be found in the news release issued by the Company on August 6, 2019, which is available on the Company’s website at www.gabrielresources.com and filed on SEDAR at www.sedar.com, and the material change report of the same date also filed on SEDAR.

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. 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.