GFG Announces Increase to Previously Announced Private Placement to Approximately C$6.0 Million

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

SASKATOON, Saskatchewan, April 29, 2020 (GLOBE NEWSWIRE) -- GFG Resources Inc. (TSX-V: GFG) (OTCQB: GFGSF) (“GFG” or the “Company”) announces that it intends to increase the size of its previously announced non-brokered private placement financing (the “Offering”) (see news release dated April 21, 2020) to an aggregate total of approximately C$6.0 million to accommodate demand from existing and new shareholders. As previously disclosed, Alamos Gold Inc. (TSX: AGI; NYSE: AGI) (“Alamos”) has committed to purchase securities under the Offering to obtain a 9.9% interest in the Company upon completion of the Offering.

The Offering will consist of any combination of common shares of the Company that will qualify as “flow-through shares” (“FT Shares”) for the purposes of the Income Tax Act (Canada) at a price of C$0.2907 per share and non-flow-through common shares (“NFT Shares”) of the Company at a price of C$0.19 per share, subject to maximum aggregate gross proceeds of C$6.0 million. 

“We are very grateful for the strong demand and support from existing and new shareholders in the Offering,” stated Brian Skanderbeg, President and CEO of GFG. “The strategic investment from Alamos is an important endorsement for the Pen Gold Project and our team. Following the close of the Offering, GFG will be well-positioned with a strong balance sheet to aggressively follow-up on our high-grade discovery at the Nib Prospect and other highly prospective targets on our district scale land package located 40 kilometres west of Timmins.”

In connection with the Offering, Alamos will be 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 Offering is scheduled to close on or about May 6, 2020 and is subject to certain conditions, including, but not limited to, the execution of definitive documentation and receipt of all necessary approvals, including the approval of the TSX Venture Exchange. The Offering is being made by way of private placement in Canada and such other jurisdictions as the Company may determine.