TORONTO (miningweekly.com) –TSX-listed Gabriel Resources will raise C$67,5-million by selling shares and warrants in a private placement to BSG Capital Markets, a subsidiary of the Beny Steinmetz Group (BSG), the company announced on Wednesday.
Shares in Gabriel Resources leapt 24,33%, to C$3,27 apiece by 16:10 in Toronto.
BSG will buy 30-million units – each comprising one common share and one share-purchase warrant – for C$2,25 a unit.
The placement is expected to close on or before December 23, after which BSG will own about 9% of Gabriel's issued and outstanding shares.
The company's other main shareholders are Electrum Strategic Holdings and Paulson & Co, which will both own 18% after the BSG financing, and Newmont Mining, which will have 15%.
If BSG exercises all its common share purchase warrants, its holding in Gabriel would increase to 16%, reducing the stakes of the other three major shareholder to 17%, 17% and 14% respectively.
Gabriel's main asset is an 80,2% stake in the Rosia Montana gold project, in Romania. Romanian State-owned enterprise Minvest SA owns 19,3%.
The project has drawn opposition from nongovernmental groups, as well as some corners of the Romanian government, and has been put on hold until the company can resolve a number of legal and permitting disputes with the government.
"We are delighted to welcome another major shareholder to our company, particularly of the calibre of the Beny Steinmetz Group which has proven expertise in the mining industry and project development across the globe and operations in the Balkans,” Gabriel chairperson Michael Parrett said in a statement.
"As one of Romania's most successful foreign investors with extensive involvement in areas of mining, construction and project development, BSG can provide Gabriel with strong support towards advancing the ultimate development of the Rosia Montana project."
BSG is a privately owned holding company which has business interests across the globe in natural resources, real estate, capital markets and the diamond industries.
“We at BSG/BSGR have extensive experience in developing world-class mining assets around the world,” BSG Capital Markets CEO Dag Cramer said.
“Gabriel is the first material investment made by BSGR into gold and we look forward to working together with the Gabriel team to develop Rosia Montana which we believe to be a world class reserve.”