Electrum Global Holdings L.P.

May 12, 2016 08:30 ET

Electrum Global Holdings L.P. Acquires Units of Gabriel Resources Ltd.

This press release is issued pursuant to Multilateral Instrument 62-104 -- Take-Over Bids and Issuer Bids and National Instrument 62-103 -- The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.

NEW YORK, NEW YORK--(Marketwired - May 12, 2016) - On May 11, 2016, Gabriel Resources Ltd. (the "issuer") completed a private placement (the "2016 Private Placement") of 20,000 units (the "2016 Units"), each 2016 Unit consisting of (i) $1,000 principal amount of 0.025% convertible subordinated unsecured notes, which notes mature on June 30, 2021 and are convertible into 3,220 common shares ("Common Shares") in the capital of the issuer (the "2016 Notes"), (ii) 1,610 common share purchase warrants each entitling the holder thereof to purchase one Common Share at a price of CAD$0.46 until June 30, 2021 (the "2016 Warrants") and (iii) one arbitration value right entitling the holder to its pro rata share of 7.5% of any proceeds arising from the arbitration claim which the Company has commenced against Romania (the "2016 AVRs").

In addition, the notes (the "2014 Notes" and together with the 2016 Notes, the "Notes"), warrants (the "2014 Warrants" and together with the 2016 Warrants, the "Warrants") and arbitration value rights (the "2014 AVRs" and together with the 2016 AVRs, the "AVRs") issued in connection with a private placement completed by the issuer in 2014 were restructured (the "Restructuring"). These transactions and the securities issued in these transactions are more fully described in the issuer's press releases, dated May 11, 2016 and May 3, 2016.

Pursuant to the 2016 Private Placement, Electrum Global Holdings L.P. (the "Offeror") acquired 3,371 2016 Units at an aggregate price of $3,371,000 or $1000 per 2016 Unit, which 2016 Units consist of (i) $3,371,000 principal amount of 2016 Notes, (ii) 5,427,310 2016 Warrants and (iii) 3,371 2016 AVRs. In connection with the Restructuring, the 5,900 2014 Notes owned by the Offeror became convertible into 18,998,000 Common Shares (compared to 4,702,300 Common Shares prior to the Restructuring) and the terms of the 2014 Notes, 2014 Warrants and 2014 AVRs were amended to be substantially similar to the securities issued in connection with the 2016 Units.

As a result of the closing of the 2016 Private Placement and the Restructuring, the Offeror acquired the right to acquire 10,854,620 Common Shares upon conversion of the 2016 Notes, the right to acquire an additional 14,295,700 Common Shares upon conversion of the 2014 Notes, and 5,427,310 2016 Warrants, representing an increase in the Offeror's securityholding percentage from 16.25% to 22.32% (assuming the conversion or exercise of all of the Notes and Warrants beneficially owned by the Offeror and that no other securities, including those convertible into or exercisable for the issuer's securities, are issued, converted or exercised).

Immediately before the 2016 Private Placement and Restructuring, the Offeror held: (i) 56,410,739 Common Shares; (ii) $5,900,000 principal amount of 2014 Notes convertible into approximately 4,702,300 Common Shares; and (iii) 2,348,200 2014 Warrants, representing approximately 16.25% of the outstanding Common Shares (assuming the conversion of all of the 2014 Notes and exercise of all of the 2014 Warrants beneficially owned by the Offeror and that no other securities, including those convertible into or exercisable for the issuer's securities, were issued, converted or exercised), as well as 5,900 2014 AVRs.

Following the closing of the 2016 Private Placement and Restructuring, the Offeror holds: (i) 56,410,739 Common Shares; (ii) $9,271,000 principal amount of Notes convertible into 29,852,620 Common Shares; and (iii) an aggregate of 7,775,510 Warrants, representing approximately 22.32% of the outstanding Common Shares (assuming the exercise of all of the Notes and Warrants beneficially owned by the Offeror and that no other securities, including those convertible into or exercisable for the issuer's securities, are issued, converted or exercised), as well as 9,271 AVRs.

The 2016 Units referred to above were acquired for investment purposes and the Offeror and/or one or more of its affiliates may, depending on market and other conditions, increase or decrease its beneficial ownership of Common Shares or other securities of the issuer whether in the open market, by privately negotiated agreement or otherwise.

The Offeror is an "accredited investor" (as such term is defined in National Instrument 45-106 - Prospectus Exemptions adopted by the Canadian Securities Administrators ("NI 45-106")) because the Offeror is a "person" (as such term is defined in NI 45-106) in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are "accredited investors".

The issuer is located at c/o RM Gold (Services) Ltd., 25 Southampton Buildings, London, England, WC2A 1AL. The Offeror is located at 700 Madison Avenue, 5th Floor, New York, NY 10065, USA. A copy of the early warning report to which this news release relates can be obtained from Michael Williams (646-365-1600) or on the SEDAR profile of the issuer at www.sedar.com.

Contact Information

  • Michael Williams
    646-365-1600