TIDMALO
RNS Number : 3505U
Alecto Minerals PLC
17 January 2017
Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector:
Mining
17 January 2017
Alecto Minerals plc ("Alecto" or the "Company")
Issue of Convertible Loan Notes to raise GBP1 million
(gross)
Alecto Minerals plc (AIM: ALO), the Africa-focused gold and
copper exploration and development company, is pleased to announce
that it has raised GBP1 million (before expenses) through the issue
of convertible loan notes ("Notes"). Alecto will utilise these
funds to recommence operations at the Mowana Copper Mine in
Botswana ("Mowana") and to fund certain transaction expenses in
relation to the completion of the reverse takeover process
associated with the proposed acquisition of Cradle Arc Investments
(Proprietary) Limited ("Cradle"), which owns Mowana, further
details of which were announced by the Company on 21 December 2016
and as more particularly described below.
The Notes have been subscribed to by clients of Beaufort
Securities Limited, the Company's broker ("Noteholders"). The
principal terms of the Notes are as follows:
-- The Notes are repayable by the Company on 16 July 2017.
-- Interest at the rate of 20% will be paid to the Noteholders
and will be satisfied by the issue of new ordinary shares in the
capital of the Company ("Ordinary Shares") at a price of 0.06625
pence per Ordinary Share, being the mid-market price at which the
Ordinary Shares were suspended from trading on AIM. This will
result in the issue of 301,886,792 Ordinary Shares to the
Noteholders (the "Interest Shares").
-- The Noteholders have the right, but not the obligation, to
convert part of, or the whole of, the principal amount outstanding
under the Notes into new Ordinary Shares. During the first ten
trading days following the date of re-admission of the Company's
Ordinary Shares to trading on AIM following publication of an
admission document ("Re-Admission"), the Noteholders can convert
the principal amount of the Notes at a conversion price equal to
the lower of (a) the closing price per Ordinary Share on the
trading day immediately after Re-Admission and (b) 80% of the
closing mid-price per Ordinary Share as quoted on AIM on the
trading day immediately prior to the date of receipt by the Company
of the conversion notice in question (the "Floating Price").
Following that ten trading day period the conversion price will be
the Floating Price.
-- The Notes will not be converted to the extent that doing so
would trigger a mandatory offer for the Company pursuant to Rule 9
of the City Code on Takeovers and Mergers.
-- The terms of the Notes include customary terms of default
pursuant to which the Noteholders may demand immediate repayment
including in the event that the proposed acquisition of Cradle is
not completed by 7 July 2017.
The net funds raised from the issue of the Notes will be used to
provide a loan of up to US$1m to Cradle, which it will use to
recommence operations at Mowana. Fujax Minerals and Energy Limited
("Fujax"), the South African minerals and energy trading company
providing off-take financing to Mowana, will match Alecto's loan to
Cradle, thereby providing Mowana with funding of up to, in
aggregate, US$2m in the short-term with the aim of bringing the
mine back in to production in Q1 2017. The balance of the funds
raised will be used for general working capital purposes, including
the transaction expenses relating to the Company's proposed
acquisition of Cradle through a reverse takeover process.
The Company's broker, Beaufort Securities Ltd, will be paid a
fee of GBP50,000 to be satisfied by the issue of 75,046,904
Ordinary Shares (the "Fee Shares")at the price of 0.06625 pence per
Ordinary Share.
Application will be made to the London Stock Exchange plc for
the Interest Shares and the Fee Shares to be admitted to trading on
AIM ("Admission") and it is expected that the shares will be
admitted to AIM on 24 January 2017 and that trading will commence
when the current suspension is lifted. Following Admission, Alecto
will have in issue 5,649,248,546 Ordinary Shares. The Interest
Shares and Fee Shares will be fully paid and will rank pari passu
in all respects with the Company's existing Ordinary Shares. The
Company does not currently hold any Ordinary Shares in treasury.
Accordingly, the above figure may be used by shareholders in the
Company as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a
change in their interest in, the share capital of the Company under
the Financial Conduct Authority's Disclosure and Transparency
Rules.
Alecto's CEO, Mark Jones, commented:
"We are delighted that the investment potential of Mowana is
recognised and that we have been able to secure these funds to
support Alecto's transition from developer to producer. It is
extremely exciting that our loan of US$1m to Cradle will then be
matched by Fujax, thereby meeting our US$2m budget to recommence
operations at Mowana. The injection of these funds means that we
can continue to progress the reverse takeover process and securing
of shareholder approval for the Mowana transaction, whilst at the
same time commencing production of saleable copper from the mine,
allowing Alecto to benefit from its management contract at the
mine.
"We have made good progress on the ground in Botswana, despite
the interruption of the festive season, with work completed at
Mowana to-date comprising the clean-up and recommissioning of
equipment, detailed mine planning and design and the recruitment of
new personnel. This investment marks a major step forward in
bringing the project back into operation and Alecto's management is
working closely with our partners to restart production and to
complete the acquisition."
Shareholder Conference Call
The Company takes this opportunity to remind shareholders that
it will be holding a call today, Tuesday 17 January at 11.00am. For
full details of the call, please view the announcement dated 23
December 2017. The Company invites shareholders to submit questions
to its public relations advisers, St Brides Partners Ltd, ahead of
the call via email to
shareholderenquiries@stbridespartners.co.uk.
**ENDS**
For further information please visit www.alectominerals.com,
follow us on Twitter @AlectoMinerals, or contact:
Alecto Minerals plc Tel: +44 (0)20 7499 5881
Mark Jones
Strand Hanson Limited Tel: +44 (0)20 7409 3494
Andrew Emmott
Matthew Chandler
James Dance
Beaufort Securities Limited Tel: +44 (0)20 7382 8300
Jon Belliss
St Brides Partners Limited Tel: +44 (0)20 7236 1177
Elisabeth Cowell
Charlotte Page
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR").
Notes to editors:
Alecto Minerals plc is an African focused, gold and copper
exploration and development company quoted on AIM with gold
exploration projects in Mali, Botswana, Burkina Faso and Mauritania
and a development project with near-term gold production in
Zambia.
In Zambia, the historical Matala and Dunrobin gold mines have,
in aggregate, a 760,000 oz Au JORC Code compliant resource estimate
in the Measured, Indicated and Inferred categories at an average
grade of 2.3g/t Au. The Company is focused on bringing Matala into
low-cost production in the near to mid-term.
In Botswana, the Company is, subject to shareholder approval,
looking to acquire a 60% interest in the Mowana Copper Mine, a
formerly producing copper mine and plant, which can be brought back
into production at a relatively low cost. The mine has a mineral
resource inventory of 683,000 tonnes copper ("Cu") in the Measured
and Indicated categories (JORC-code compliant) with an additional
945,000 tonnes Cu in the Inferred category. Alecto and its partners
have re-modelled the Mowana mine to ensure profitable operations
even at depressed commodity prices, leading to an internal estimate
for the project's NPV of US$245 million at a copper price of
US$2.50 per lb. Alecto has also agreed a 10-year management
contract for Mowana with its partners and will receive management
fees equal to 1.5% of revenue.
In Mali, the Company has secured a number of joint-venture
agreements, in-line with its strategy to retain exposure to the
value in its African gold exploration portfolio for little or no
cost; the Kossanto East project, which has an inferred JORC Code
compliant resource estimate of 6.72Mt grading at 1.14g/t Au for an
aggregate of 247,000 oz Au with a cut-off grade of 0.5g/t Au, is
under a joint venture agreement with Ashanti Gold Corp; the
Kossanto West Project is under a joint venture with Randgold
Resources Limited; the 250 sq. km. Karan gold project in southern
Mali is under joint venture with Cora Gold Limited.
Alecto also owns the Kerboulé Project, located in the highly
prospective Birrimian-age Djibo gold belt in northern Burkina Faso,
as well as the wholly owned Wad Amour IOCG Project in Mauritania
which is at an exploration stage.
Accordingly, the Company has a strong, diversified project
portfolio with exciting exploration upside potential.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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