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GFG Closes Private Placement Financing

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GFG Closes Private Placement Financing

 

 

 

 

 

GFG Resources Inc. (TSX-V: GFG) (OTCQB: GFGSF) has closed its private placement financing (see news release dated February 23, 2024) for gross proceeds of C$2,505,866. In connection with the Offering, Alamos Gold Inc. (TSX: AGI) (NYSE: AGI) purchased securities to maintain their 9.9% interest in the Company.

 

Pursuant to the Offering, GFG issued (i) 9,278,635 units of the Company at a price of C$0.085 per Unit for gross proceeds of C$788,684; (ii) 9,697,000 “flow-through” units at a price of C$0.10 per FT Unit for gross proceeds of C$969,700; and (iii) 6,147,059 premium units of the Company at a price of C$0.1216 per Premium Unit for gross proceeds of C$747,482. Each Unit shall consist of one common share of the Company and one-half of one share purchase warrant, with each whole share purchase warrant entitling the holder thereof to acquire one additional common share of the Company at an exercise price of C$0.13 for a period of 36 months from the date of issuance, subject to acceleration as defined below. Each FT Unit and each Premium Unit shall consist of one common share of the Company that will qualify as a “flow-through share” for the purposes of the Income Tax Act (Canada) and one-half of one Warrant.

 

If during the exercise period of the Warrants the closing price of the common shares of the Company is at a price equal to or greater than C$0.13 for a period of 10 consecutive trading days, GFG will have the right to accelerate the expiry date of the Warrants by giving notice, via a news release, to the holders of the Warrants that the Warrants will expire on the date that is 30 days after the issuance of said news release.

 

The gross proceeds raised from the sale of the FT Shares comprising, in part, the FT Units and Premium Units, 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 the Units and the Warrants comprising, in part, the FT Units and Premium Units, will be used for exploration activities on the Company’s projects in Ontario as well as for general working capital purposes.

 

Subject to compliance with applicable regulatory requirements and in accordance with National Instrument 45-106 – Prospectus Exemptions, an aggregate of 6,935,400 Units sold pursuant to the Offering have been issued pursuant to the Listed Issuer Financing Exemption under Part 5A of NI 45-106, and accordingly such securities will not be subject to a hold period pursuant to applicable Canadian securities laws. There is an offering document on Form 45-106F19 related to the Offering that can be accessed under the Company’s profile at www.sedarplus.ca and on the Company’s website at www.gfgresources.com. The balance of the Units, FT Units and Premium Units sold pursuant to the Offering will be subject to a statutory hold period expiring on August 20, 2024.

 

Related Party Transaction

In connection with the Offering, GFG management and directors of the Company  purchased a total of 3,200,000 Units and 497,000 FT Units. Insiders’ participation in the Offering constitutes a “related party transaction” pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions The Company is also relying on the exemption from minority shareholder approval requirements under MI 61-101, as the fair market value of the insiders’ participation in the Offering does not exceed 25% of the market capitalization of the Company.

 

Alamos purchased 3,000,000 Units at a price of C$0.085 each by way of a share purchase agreement with a third party on April 19, 2024, for a total purchase price of C$255,000. Prior to the closing of the Offering, Alamos held 20,809,004 common shares and 3,843,303 warrants of GFG, representing a security holding percentage of approximately 11.24%, on a partially diluted basis. Following the closing of the Offering, Alamos will have beneficial ownership of, or control and direction over 23,809,004 common shares and 5,343,303 warrants of GFG. Assuming exercise of the warrants, Alamos will have beneficial ownership of, or control and direction over 29,152,307 common shares or 11.86% of the issued and outstanding common shares of GFG calculated as of the date of the Offering on a partially diluted basis. Alamos acquired the Units for investment purposes, which will be evaluated and may be increased or decreased from time to time at Alamos’ discretion. A copy of Alamos’ early warning report will be available on the SEDAR+ website at www.sedarplus.ca or can be requested by contacting Scott K. Parsons, Senior Vice President, Investor Relations, at SParsons@alamosgold.com, 416-368-9932 (ext. 5439) or by mail at Brookfield Place, 181 Bay Street, Suite 3910, Toronto, Ontario M5J 2T3.

 

In connection with the Offering, the Company paid cash finder’s fees on portions of the Offering totaling C$45,155.

 

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 unless an exemption from such registration is available.

 

About GFG Resources Inc.

 

GFG 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 operates three gold projects, each large and highly prospective gold properties within the prolific gold district of Timmins, Ontario, Canada. The 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 km southwest of Casper, Wyoming, U.S.

 

Posted April 21, 2024

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