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GFG Closes C$5.9 Million Oversubscribed Private Placement & Welcomes Alamos Gold as Strategic Investor

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GFG Closes C$5.9 Million Oversubscribed Private Placement & Welcomes Alamos Gold as Strategic Investor

 

 

 

 

 

GFG Resources Inc. (TSX-V: GFG) (OTCQB: GFGSF)  announces that it has closed the oversubscribed, non-brokered private placement financing (see news releases dated April 21, 2020 and April 29, 2020) for gross proceeds of C$5,905,624. As previously disclosed, Alamos Gold Inc. (TSX: AGI) (NYSE: AGI) has purchased securities under the Offering to obtain a 9.9% 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 C$0.2907 per share for gross proceeds of C$4,598,415 and (ii) 6,880,045 non-flow-through common shares of the Company at a price of C$0.19 per share for gross proceeds of C$1,307,209.

 

“The Company is pleased to close the oversubscribed financing and welcomes Alamos as a strategic investor,” stated Brian Skanderbeg, President and CEO 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 Inc. 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 underway.”

 

Corporate Update

 

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 FT 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 NFT Shares will be used for general working capital purposes.

 

The FT Shares and NFT Shares are subject to a hold period and may not be traded until September 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 Venture Exchange. All securities issued will be subject to a hold period expiring four months and one day from their issuance.

 

This news release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The securities 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 may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S under the U.S. Securities Act) unless an exemption from such registration is available.

 

About GFG Resources Inc.

 

GFG Resources is a North American precious metals exploration company focused on district scale gold projects in tier one mining jurisdictions, Ontario and Wyoming. In Ontario, the Company owns 100% of the Pen and Dore gold projects, two large and highly prospective gold properties west of the prolific gold district of Timmins, Ontario, Canada. The Pen and the Dore gold projects have similar geological settings that host most of the gold deposits found in the Timmins Gold Camp which have produced over 70 million ounces of gold. The Company also owns 100% of the Rattlesnake Hills Gold Project, a district scale gold exploration project located approximately 100 kilometres southwest of Casper, Wyoming, U.S.  The geologic setting, alteration and mineralization seen in the Rattlesnake Hills are similar to other gold deposits of the Rocky Mountain alkaline province which, collectively, have produced over 50 million ounces of gold.

 

 

 

Posted May 6, 2020

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