The 6ix Report - GFG Closes Oversubscribed Private Placement Financing

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0:32 Hello everyone and welcome to The 6th Report. I'm here with Mark LePage, Vice President of Business Development at GFG Resources, to discuss their recent news release. And Mark, you're here to talk about the closing of the company's recent private placement, which was oversubscribed from the initial announcement of 3 million to nearly 4.2 million. What were the key drivers of GFG's ability to upsize and close your recent financing in this challenging market? Yeah. The big factor for us was the fact that We had Alamos Gold come in as a lead order for the financing. From the success we had in 2022, they increased their position back to 9.9% of the company. That certainly sent a strong message to the market. We also had several other current investors that supported the financing and were able to close the book in pretty short order.

1:24 In these challenging environments, it's tough to see upsized or oversubscribed financings, especially in the exploration space. But the fact that our investors really trust management, they've seen our track record. We had a really great year in 2022

1:42 on the back of some really great drill results. They know that capital is going to be going into something that has the ability to be the next Timmons Gold deposit. So how do you weigh or rank the various financing paths or structures available for the company? Yes, I mean, it's relatively simple being an exploration company. We need hard dollars, what we call hard dollars for G&A purposes. And then the rest of the capital that we need is exploration expenditure. So we will structure it in a couple of different ways. Mainly though, is we raise hard dollars for G&A purposes, so that's to run the office and keep the lights on marketing and whatnot. The other piece is flow through financing structure. So where we can sell our shares at a premium, have less dilution, and those dollars have to go in the ground.

2:37 And the fact that our investors know that those dollars go in the ground, they're much more happy to see us raise much more flow-through dollars than hard dollars, knowing the fact that those dollars have to be spent in the ground to advance the project.

2:52 That's the simple version on how we structure these finances. Thank you. What are the inherent challenges in today's junior financing market? In our space, whether it be commodities or junior market, you know, the gold space is certainly challenging these in these current environments, specifically the juniors. Investors tend to, you know, be risk off in these challenging environments. So as an exploration company, we have much more risks than per se a revenue generating or a cashflow generating company like a producer. So They tend to go up cap. That's the biggest challenge. There's also a lot of junior exploration companies out there. When we have such a small pool of capital to go after and a much more larger group of exploration companies, it's really hard to try to get those investors to choose GFG or choose ABC company.

4:00 That's the biggest challenge is that we face a really small pool of capital and the competition for that capital is immense because there's so many exploration companies. Yeah. Like you say, it's a small pool of capital. So how do you position GFG in the minds of investors to drive participation in these finances? Because I've actually seen quite a few finances lately that have not even been fully subscribed to and you were oversubscribed. You know, it's one thing we believe in is just consistent marketing. You know, our owners know exactly what we're up to, what the strategy is. We work really hard at communicating and marketing to our current investors, as well as prospective investors. So we have a very robust marketing and digital strategy that make sure that our investors know what's going on with the company, where the company's going. And really at this stage of

4:56 the game of the junior market, you really need trust in management. So we make sure that management's always in front of our investors and so that we can build that trust. And in the junior space, there is also the issue of liquidity with these thinly traded stocks, right? So what initiatives do you take to improve liquidity both in the US and Canadian markets? Yeah, and it goes back to, you know, mainly our marketing strategy. We also have a market maker who does an excellent job for us in making sure that there's, you know, a pretty fluid trades going through day in, day out. He does a great job of that. And then we also, back to our marketing strategy, we focus a lot in North America, as well as in Europe. We have a lot of US, Swiss-based

5:47 institutional investors that we targeted, that we've built over the years. We make sure we go see them 2 to 3 times a year. And from a digital strategy standpoint, we make sure that we do a lot of homework before we execute our plans to make sure that we're going after the right investors. Thank you for that. What can people expect from GFG resources going forward into 2023? 2023 is going to be a big year for GFG. We are well capitalized. We have just over $4 million in the bank and we're going to drill 10,000 to 12,000m this year. Specifically with our focus will be in Timmins. We truly believe we're on the cusp of delivering the next Timmins Gold deposit and we're surrounded by mills. We have 4 mills within trucking distance of

6:36 the Montclair Gold project. And we'll drill 10,000 to 12,000m there. If we can have the results, and we believe we will have the results that we produced last year, this is definitely a story to watch for 2023. Perfect. And if you want to learn more about GFG Resources, visit gfgresources.com. Thank you, Mark, for your time. Thanks, Kyle. I appreciate the time and opportunity. Take care.