TIDMPGD
RNS Number : 0357X
Patagonia Gold PLC
21 November 2017
NEITHER THIS ANNOUNCEMENT NOR ANY PART OF IT CONSTITUTES AN
OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY,
SUBSCRIBE OR ACQUIRE ANY NEW ORDINARY SHARES IN ANY JURISDICTION IN
WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR
PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, THE
REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH
PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. PERSONS
INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES ARE REQUIRED BY THE
COMPANY TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH
RESTRICTIONS.
Patagonia Gold
("Patagonia Gold" or the "Company")
Subscription and Open Offer to raise, in aggregate,
approximately US$10.24 million
Patagonia Gold Plc (AIM: PGD), the mining company with gold and
silver projects in the southern Patagonia region of Argentina,
Chile and Uruguay, is pleased to announce proposals to raise
GBP7.76 million (gross) (approximately US$10.24 million) by way of
the issue of, in aggregate, 775,725,279 New Shares at a price of 1
pence per New Share for the purposes of funding the exercise of the
Calcatreu Option, which would allow the Company to purchase the
Calcatreu gold-silver project located in the Rio Negro province of
Argentina.
The Circular, including the Notice of General Meeting, Form of
Proxy and Application Form will be posted to Shareholders today.
The General Meeting is scheduled for 11.00 a.m. on 7 December 2017
at the offices of Stephenson Harwood LLP, 1 Finsbury Circus, London
EC2M 7SH.
The definitions set out in the Circular apply in this
announcement unless the context otherwise requires. The Circular
and this announcement have been posted on the Company's website
www.patagoniagold.com.
Christopher van Tienhoven, Chief Executive Officer,
commented:
"We are pleased to have conditionally secured the funding for
the exercise of the Calcatreu Option which represents an excellent
opportunity to acquire a high grade, > 1 million ounce deposit
with significant exploration upside potential in a low sulphidation
mineralized system within a large and under explored exploration
package of tenements."
For more information, please contact:
Christopher van Tienhoven
Patagonia Gold Plc
+54 911 5278 6950
Angela Hallett/Richard Tulloch
Strand Hanson Limited
Tel: +44 (0)20 7409 3494
1. Introduction
Patagonia Gold today announces proposals to raise approximately
GBP7.76 million (gross) (approximately US$10.24 million) by way of
the issue of, in aggregate, 775,725,279 New Shares at a price of 1
pence per New Share for the purposes of funding the exercise of the
Calcatreu Option, which would allow the Company to purchase the
Calcatreu gold-silver project located in the Rio Negro province of
Argentina.
The Fundraising comprises a Subscription of 378,787,878
Subscription Shares at the Issue Price raising GBP3.79 million
(gross) (approximately US$5 million) by Carlos J. Miguens,
Non-Executive Chairman of the Company, through his controlled
entity Cantomi, and an Open Offer of 396,937,401 Open Offer Shares
at the Issue Price raising GBP3.97 million (gross) (approximately
US$5.24 million) available to all Qualifying Shareholders on the
Record Date. The Issue Price of 1 pence represents a discount of
approximately 7.4 per cent. to the closing mid-market price of 1.08
pence per Ordinary Share on 20 November 2017, the latest
practicable date prior to the date of this announcement.
Although the Company has certain on-going Shareholder
authorities taken at the annual general meeting of the Company held
on 27 April 2017, these are not sufficient to implement the
Fundraising and issue of the Subscription Shares and the Open Offer
Shares. Accordingly, the Company is seeking further Shareholder
approval to grant the Directors authority to allot equity
securities and to dis-apply statutory pre-emption rights in respect
of an allotment of equity securities for cash in connection with
the Subscription and the Open Offer, as well as renew the general
on-going Shareholder authorities.
Carlos J. Miguens is deemed to be acting in concert with certain
members of his extended family for the purposes of the City Code.
The Concert Party comprises 12 members and includes Gonzalo
Tanoira, one of the Company's Non-Executive Directors. Further
details on the Concert Party are set out in paragraph 5.5
below.
Carlos J. Miguens, through his controlled entity, Cantomi, has
subscribed for 378,787,878 Subscription Shares and has also
undertaken to apply for all of his direct and Cantomi's Open Offer
Entitlements. In addition, Maria Luisa Miguens, Cinco Vientos and
Polinter SA, who are all members of the Concert Party, have
undertaken to take up their Open Offer Entitlements in full. Mr
Miguens has also undertaken to apply, through Cantomi, for all the
remaining Open Offer Shares under the Excess Application Facility,
other than the Open Offer Shares which he directly, Maria Luisa
Miguens, Cinco Vientos and Polinter SA have each undertaken to take
up in respect of their own pro-rata entitlements under the Open
Offer. Accordingly, Mr Miguens has undertaken to apply for, in
aggregate, 374,878,071 Open Offer Shares, directly and through
Cantomi. In respect of the Fundraising, all other members of the
Concert Party have undertaken not to take up their Open Offer
Entitlements or make any application under the Excess Application
Facility.
Carlos J. Miguens is currently interested in (both directly and
through his controlled entity, Cantomi), in aggregate, 592,240,677
Existing Ordinary Shares, representing approximately 37.30 per
cent. of the Company's Existing Ordinary Shares and the Concert
Party (including Carlos J. Miguens and Cantomi), is currently
interested in, in aggregate, 726,630,466 Existing Ordinary Shares,
representing approximately 45.76 per cent. of the Company's
Existing Ordinary Shares. In addition, certain members of the
Concert Party, being Carlos J. Miguens (together with Cantomi) and
Gonzalo Tanoira (together with Capifox), have previously been
granted the Options.
Accordingly, on completion of the Fundraising:
l assuming exercise of the Options held by Carlos J. Miguens (held through Cantomi) only and no participation in the Open Offer by Qualifying Shareholders, other than as set out above, Carlos J. Miguens' and Cantomi's interest in the Company would increase to, in aggregate, approximately 57.39 per cent. of the then Enlarged Share Capital.
l assuming exercise of the Options and no participation in the
Open Offer by Qualifying Shareholders, the Concert Party's interest
in the Company would increase to, in aggregate, approximately 64.00
per cent. of the then Enlarged Share Capital.
Therefore, the Board is also seeking the approval of the
Independent Shareholders of the Rule 9 Waiver which the Panel has
agreed with the Company to grant, subject to the passing of the
Whitewash Resolution by the Independent Shareholders at the General
Meeting, of any obligation on the part of the Concert Party and/or
Carlos J. Miguens (together with Cantomi), to make a general offer
to Shareholders under Rule 9 of the City Code which otherwise might
arise upon the Concert Party's participation in the Subscription
and the Open Offer as more fully set out in paragraph 5.4 below.
Further details of the Rule 9 Waiver are set out in paragraph 6
below.
As part of the 2014 Fundraising, the future exercise of the
Options was approved as part of the whitewash resolution passed at
that time. Accordingly, the Options may be exercised by the
relevant members of the Concert Party without triggering any
mandatory bid obligations under the City Code.
The Subscription, the Open Offer and the Rule 9 Waiver are
conditional upon, inter alia, Shareholder approval of the
Resolutions, which will be sought at the forthcoming General
Meeting to be held at the offices of Stephenson Harwood LLP, 1
Finsbury Circus, London EC2M 7SH at 11.00 a.m. on 7 December 2017.
You will find a Notice of General Meeting at the end of the
Circular, which is expected to be sent to shareholders today. A
Form of Proxy will also be enclosed with the Circular.
The recommendations of the Directors and the Independent
Directors, are set out in paragraph 13 below.
2. Current activities, trading and prospects
Patagonia Gold is a producing mining and exploration company
with the primary objective of increasing shareholder value through
the acquisition, exploration and development of gold and silver
projects in the Deseado Massif region of Argentina.
The Company holds, directly or indirectly through its
subsidiaries or under option agreements, the mineral rights to over
220 property interests in Argentina, Chile and Uruguay. These
include the mineral rights to 67 property interests in the province
of Santa Cruz covering approximately 190,000 hectares held by the
Company's 90 per cent. owned Argentinian subsidiary, Patagonia Gold
S.A. ("PGSA") and to 51 property interests covering approximately
156,000 hectares held by its wholly owned Argentinian subsidiary
Minera Minamalu S.A. ("Minamalu").
Projects
Lomada de Leiva, Province of Santa Cruz, Argentina
The Lomada de Leiva gold mine ("Lomada") is located
approximately 40 kilometres south-east of the town of Perito Moreno
in the Province of Santa Cruz, and is within the Group's 44,000
hectares La Paloma property block which is approximately 120
kilometres to the north of the El Tranquilo property block. The
Company completed a heap leach trial at Lomada in 2013 and in Q4
2013 successfully brought Lomada into full production. In January
2014 the Company decided to expand mining operations to 3,000 oz Au
per month, with the objective of both reducing its cash costs and
increasing the level of cash generated for continued exploration
and development of the Company's other highly prospective
properties, including Patagonia Gold's flagship Cap-Oeste gold and
silver project ("Cap-Oeste").
Since the commencement of production at Lomada during the course
of 2013 through to the end of December 2016, gross revenues of
approximately US$76.45 million have been generated from gold sales
of approximately 61,572 oz, achieving an average price of US$1,241
per oz.
The irrigation of the heap leach pad at Lomada is continuing
with a daily production of approximately 15 oz still being
achieved, exceeding expectations, with production for 2017 expected
to be 6,100 oz Au.
Cap-Oeste, Province of Santa Cruz, Argentina
The Cap-Oeste Project is located in the El Tranquilo property
block approximately 65 kilometres southwest of the town of Bajo
Caracoles in Santa Cruz. The Company's aim is to continue to expand
the Cap-Oeste Project's resource base and to develop the Cap-Oeste
Project towards production in 2017.
Since acquiring the property from Barrick in 2007, the Company
has drilled 563 holes to May 2015 for a total of 106,148 metres. In
this time the Company has produced 6 resource updates with the
latest JORC compliant resource estimate completed in October 2017
containing 15.45MT @ 1.85 g/t Au and 53.9 g/t Ag for 2.62 g/t Aueq
(US$1,250/Au and US$18/Ag per ounce) for 917k oz Au, 26.8M oz Ag
for 1.31 m oz Aueq, these resource are global of which Net
Attributable ounces are 90% of this figure to the Company. All
resources are reported below the existing preliminary A3 pit
design.
Cap-Oeste Project
Cap-Oeste is expected to produce 24,850 ounces of Aueq during
2017. The Company has experienced significant setbacks in the
installation of the now commissioned agglomeration circuit and
damage to the heap leach pad due to extreme weather conditions,
which have led to a significant reduction in the expected annual
production. The recovery issues have now been resolved and the
leach pad is now agglomerating at capacity with recoveries in line
with expectations and the Company remains confident that gold
recovery of 80% will be achieved on completion of the full leaching
cycle. Agglomeration of the ore continues on a daily basis with
throughput now exceeding 3,000 tonnes per day from a 12 hour shift,
with 85,000 tonnes of agglomerated ore having now been loaded onto
the pads as at the end of October 2017.
As a result of the previously announced recovery issues
experienced at Cap-Oeste, production for 2017 has been materially
impacted and the Company now expects production from the Cap-Oeste
heap leach operations to be 24,850 oz AuEq for 2017 full year, with
10,100 oz AuEq for the final quarter of 2017.
Current pit operations have now advanced to a level where high
grade COSE style hypogene mineralisation has been exposed, enabling
the Company to confirm the shoot's dimensions and style of
mineralisation and grade below the current pit. A subsequent
reinterpretation of the deeper drilling and mineralisation
intersected below the current pit, has led to a material increase
in the tonnage and contained Au and Ag of this non refractory style
of mineralisation (which falls within the COSE style
mineralisation).
An updated JORC compliant resource model has been completed by
CUBE Consulting to report on the ore below the current pit. This
shows a material increase in the COSE type mineralisation, which
can be treated via cyanide leaching, in the Cap-Oeste resource
(Measured and Indicated) below the current pit of approximately
295,000 oz AuEq at an average grade of approximately 19.40 g/t
AuEq.
In addition, as at the end of August 2017, Cap-Oeste has
remaining resources in the current open pit totaling 560,901t @
3.43g/t Au and 135.48g/t Ag for 5.38g/t Aueq for 61,802 oz of Au
and 2.44m oz of Ag.
Total ore mined to the end of September 2017 is 4% below
schedule at 560,710T @ 1.81 g/t Au and 56g/t Ag for 2.48g/t Aueq,
total waste mined for the same period is 2,3 Mt or 21% below
schedule. The Company expects mining operations at Cap-Oeste in the
current pit to be terminated by early Q2 2018, although the Company
is currently evaluating various options, including whether to
continue mining the deposit from underground or expand the open pit
to the full final pit design.
La Manchuria, Province of Santa Cruz, Argentina
The La Manchuria property block is located approximately 50
kilometres to the southeast of the El Tranquilo property block and
hosts the La Manchuria project.
To date, the Company has completed three drilling campaigns for
a total of 20,993 metres of diamond and reverse circulation
drilling on this project.
An NI 43-101 resource estimate, released in September 2010,
listed Indicated Resources at 55,684 oz AuEq and Inferred Resources
of 90,682 oz of AuEq. High-grade gold and silver mineralisation is
open along strike to northeast and southeast.
The Company also has a number of other highly prospective
exploration leases within the Deseado Massif.
Carreta Quemada and Chamizo, Uruguay
As announced on 2 February 2016, Patagonia Gold executed an
option agreement with Trilogy Mining Corporation to earn up to 100%
of the Trilogy's Carreta Quemada and Chamizo exploration gold
projects in Uruguay. Pursuant to the terms of the agreement, the
Company can acquire a 51 per cent. interest in these projects for
providing US$1.5 million to fund project expenditure, and up to an
80 per cent. interest for providing an additional US$2.0 million of
funding, at which point, subject to certain conditions, Trilogy may
exercise a put option, pursuant to which the Company shall be
required to purchase the remaining 20 per cent. interest in the
projects.
Carreta Quemada, which covers an area of 388km2, and Chamizo,
which covers an area of 70km2, are located on the San José
Greenstone Belt within the early Proterozoic Piedra Alta Terrane,
approximately 100km from Montevideo, the capital of Uruguay. To
date there has been minimal exploration work undertaken across the
projects and pursuant to the agreement, Patagonia Gold is proposing
to finance, from its existing resources and future operations, a
systematic exploration programme. Initial work has already
commenced and will include mapping, detailed geochemical soil and
rock chip and gradient array IP geophysical programmes to identify
drill targets, with the aim of discovering a potential stand-alone
gold resource within 18 months, subject to funding and the grant of
tenure and land access.
Current trading and prospects
In its interim results for the six months ended 30 June 2017,
released on 27 September 2017, the Company announced revenues from
gold sales of US$12.8 million (1H2016: US$21.6 million), below
forecast owing mainly to lower initial production from the open pit
mine at Cap-Oeste. However, the Company recorded net profits of
US$9.1 million (1H2016: US$2.2 million) for the first six months of
the year largely owing to the disposal of Cap-Oeste Sur Este
project ("COSE"). Excluding the disposal, the Company achieved a
net loss of US$3.8 million.
At the end of the period short term debt amounted to US$27.1
million (31 December 2016: US$18.0 million). The increase in the
debt position is attributable to the capital cost of the
agglomeration circuit and working capital requirements due to lower
initial revenues from gold sales as a result of the recoveries
issues at Cap Oeste. The outstanding debt is intended to be repaid
in full, and surplus cash flow generated, from the increased
production from Cap Oeste as this ramps up and achieves its target
level of production.
At Lomada, where mining activity ceased in May 2016, operations
continue to perform well with production expected to continue at
least until the end of the current year.
At Cap-Oeste, initial recoveries were impacted by the high clay
content resulting in lower than expected production in the period
with production of 6,643 oz AuEq during the period. However,
following the construction of the agglomeration circuit, which was
completed in August following the commissioning of the crusher,
production at Cap-Oeste is expected to improve as its operation
begins to ramp up.
The Company disposed of COSE on 31 May 2017 to a subsidiary of
Pan American Silver Corp ("PAAS"), for a total consideration of
US$15 million (US$7.5 million of which is deferred to the earlier
of 31 May 2018 and the commencement of production), plus a 1.5% net
smelter return royalty. This transaction allows PAAS to treat and
produce, in its plant, additional ore from the COSE mineral
deposit, and provides Patagonia with the opportunity to reduce its
net debt position while focusing on new opportunities.
3. Background to and reasons for the Fundraising
The Calcatreu gold-silver project represents an excellent
opportunity for the Company to acquire a high grade > 1 million
ounce deposit with significant exploration upside potential in a
low sulphidation mineralized system within a large and under
explored exploration package of tenements. Rio Negro is a mining
friendly province in Argentina with a proactive government intent
on increasing local investment and creating long term job growth.
The Directors believe that Calcatreu has the potential to be a 10+
year open pit mining operation with its existing resource base. The
overall consideration of US$15 million is equivalent to
approximately 62,500m of HQ diamond drilling or approximately 70%
of the drilling that has already been completed within Calcatreu
and represents a discovery cost of US$15 per oz, which is extremely
low for current day exploration costs.
As a result of the previously announced recovery issues
experienced at Cap-Oeste, production for 2017 has been materially
impacted which has significantly impeded the Company's capacity to
generate free cashflow and provide the full US$15 million cash
consideration required to complete the acquisition directly from
operating margin. The Company intends to fund the balance of the
consideration from its existing cash resources and loan
facilities.
4. Use of proceeds
The net proceeds of the Fundraising, together with existing cash
resources and loan facilities of the Company, will be utilised to
exercise the purchase option on the Calcatreu gold silver project
located in Argentina's Rio Negro province. The Calcatreu asset is a
high grade (2.325g/t Aueq) low sulphidation gold system with the
mineralization outcropping at surface. The current resource
contains 8mt @ 3.04 g/t Aueq for 780,000 ounces in Indicated
Category and a further 255,000 oz @ 2.32 g/t Aueq in Inferred
Category. This resource model was completed in 2008 using prices of
US$650/oz Au and $12.50/oz Ag, respectively. The land package
around the existing discovery is large with over 25,000 hectares of
sparsely explored terrain. No systematic exploration has been
carried out since Aquiline sold the asset to Pan American in
2005.
PGSA has now completed its due diligence programme including a
remodeling and re-estimation of the existing resource and the
drilling of 6 PQ diamond holes into the main Vein 49 zone, results
of the drilling compared very well with the original Aquiline
drilling and reduce . The Company proposes to explore the area
immediately around the existing resource with the aim of increasing
the resource before completing a feasibility and developing the
asset. The Directors believe that approximately 12-18 months will
be required to generate and drill off known targets. The Company is
confident from the data reviewed to date that there remains
significant potential to increase the exiting resource base.
Detailed exploration has not been carried out since the gold price
was US$500 dollars per ounce and deeper vein extensions and
geophysical targets were not tested at all only surface outcropping
vein. The system has a known strike length of in excess of 8km and
the Directors believe that this may well increase with increased
knowledge of the system and more detailed geophysical and
geochemical surveys, which the Company intends to undertake on
completion of the acquisition.
5. Information on the Fundraising
5.1 The Subscription
The Company has conditionally raised gross proceeds of GBP3.79
million (approximately US$5 million) through the issue by the
Company of 378,787,878 Subscription Shares at the Issue Price,
through the Subscription with Cantomi pursuant to the terms of the
Subscription Letter. The Issue Price of 1 pence represents a
discount of approximately 7.4 per cent. to the closing mid-market
price of 1.08 pence per Ordinary Share on 20 November 2017, the
latest practicable date prior to the date of this announcement.
The Subscription is, inter alia, conditional upon the passing of
the Resolutions at the General Meeting and Admission.
5.2 The Open Offer
In addition, in order to provide Shareholders with an
opportunity to participate in the Fundraising, the Company is
providing all Qualifying Shareholders with the opportunity to
subscribe, at the Issue Price, for an aggregate of 396,937,401 Open
Offer Shares, raising gross proceeds of GBP3.97 million
(approximately US$5.24 million). This allows Shareholders to
participate on a pre-emptive basis whilst providing the Company
with the flexibility to raise additional equity capital to further
improve its financial position.
Subject to fulfilment of the conditions set out below, and in
the Circular, the Open Offer provides Qualifying Shareholders with
the opportunity to apply to acquire Open Offer Shares at the Issue
Price pro rata to their holdings of Existing Ordinary Shares as at
the Record Date on the following basis:
1 Open Offer Shares for every 4 Existing Ordinary Shares
and in proportion for any other number of Existing Ordinary
Shares then held.
Entitlements to apply to acquire Open Offer Shares will be
rounded down to the nearest whole number and any fractional
entitlements to Open Offer Shares will be disregarded in
calculating an Open Offer Entitlement and will be aggregated and
made available to Qualifying Shareholders pursuant to the Excess
Application Facility.
The Open Offer is conditional upon, inter alia, the passing of
the Resolutions and Admission. If the Conditions are not satisfied,
the Open Offer will not proceed and any Open Offer Entitlements
admitted to CREST will thereafter be disabled and application
monies under the Open Offer will be refunded to the applicants, by
cheque (at the applicant's risk) in the case of Qualifying
Non-CREST Shareholders and by way of a CREST payment in the case of
Qualifying CREST Shareholders, without interest, as soon as
practicable thereafter. The Open Offer Shares have not been placed
subject to clawback nor have they been underwritten, but Carlos J.
Miguens has undertaken to apply for all of his direct and Cantomi's
Open Offer Entitlements. In addition, Maria Luisa Miguens, Cinco
Vientos and Polinter SA, who are all members of the Concert Party,
have undertaken to take up their Open Offer Entitlements in full.
Mr Miguens has also undertaken to apply, through Cantomi, for all
the remaining Open Offer Shares under the Excess Application
Facility, other than the Open Offer Shares which he directly, Maria
Luisa Miguens, Cinco Vientos and Polinter SA have each undertaken
to take up in respect of their own pro-rata entitlements under the
Open Offer. Accordingly, Mr Miguens has undertaken to apply for, in
aggregate, 374,878,071 Open Offer Shares, directly and through
Cantomi. In respect of the Fundraising, all other members of the
Concert Party have undertaken not to take up their Open Offer
Entitlements or make any application under the Excess Application
Facility.
Excess Applications
The Open Offer is structured to allow Qualifying Shareholders to
subscribe for Open Offer Shares at the Issue Price pro rata to
their holdings of Existing Ordinary Shares. Qualifying Shareholders
may also make applications in excess of their pro rata initial
entitlement up to an amount equal to the total number of Open Offer
Shares available under the Open Offer less an amount equal to such
Qualifying Shareholder's Open Offer Entitlement. To the extent that
pro rata entitlements to Open Offer Shares are not subscribed by
Qualifying Shareholders, such Open Offer Shares will be available
to satisfy such excess applications. As noted above, Carlos J.
Miguens has undertaken to apply, through Cantomi, for all of the
Open Offer Shares available under the Excess Application Facility,
other than the Open Offer Shares which he directly, Maria Luisa
Miguens, Cinco Vientos and Polinter SA have each undertaken to take
up in respect of their own pro-rata entitlements under the Open
Offer. Applications under the Excess Application Facility may be
allocated in such manner as the Directors may determine, in their
absolute discretion, and no assurance can be given that any
applications under the Excess Application Facility by Qualifying
Shareholders will be met in full or in part or at all.
Qualifying Shareholders should note that the Open Offer is not a
rights issue. Qualifying Non-CREST Shareholders should be aware
that the Application Form is not a negotiable document and cannot
be traded. Qualifying Shareholders should also be aware that in the
Open Offer, unlike in a rights issue, any Open Offer Shares not
applied for will not be sold in the market nor will they be placed
for the benefit of Qualifying Shareholders who do not apply under
the Open Offer.
Overseas Shareholders
Certain Overseas Shareholders may not be permitted to subscribe
for Open Offer Shares pursuant to the Open Offer and should refer
to the Circular.
CREST instructions
Application has been made for the Open Offer Entitlements and
Excess Open Offer Entitlements for Qualifying CREST Shareholders to
be admitted to CREST. It is expected that the Open Offer
Entitlements will be admitted to CREST on 22 November 2017. The
Excess Open Offer Entitlements will also be enabled for settlement
in CREST on 22 November 2017. Applications through the CREST system
will only be made by the Qualifying Shareholder originally entitled
or by a person entitled by virtue of a bona fide market claim.
Admission, settlement and dealings
Application will be made to the London Stock Exchange for the
Open Offer Shares, together with the Subscription Shares, to be
admitted to trading on AIM. It is expected that Admission will
become effective and that dealings in respect of the New Shares
will commence at 8.00 a.m. on 8 December 2017. Further information
in respect of settlement and dealings in the Open Offer Shares will
be set out in the Circular.
Upon Admission:
l the Subscription Shares will represent approximately 16.03 per
cent. of the Enlarged Share Capital; and
l the Open Offer Shares will represent approximately 16.79 per
cent. of the Enlarged Share Capital.
The New Shares will represent, in aggregate, approximately 48.86
per cent. of the Company's existing issued share capital and
approximately 32.82 per cent. of the Enlarged Share Capital.
The New Shares will, upon Admission, rank pari passu with the
Existing Ordinary Shares, including the right to receive dividends
and other distributions declared following Admission. The New
Shares are not being made available to the public and are not being
offered or sold in any jurisdiction where it would be unlawful to
do so.
5.3 City Code on Takeovers and Mergers
With effect from 30 September 2013, the Company became subject
to the City Code, following the removal of the "residency test" for
companies incorporated in the UK, the Channel Islands and the Isle
of Man and whose shares were admitted to trading on AIM. The
Company was not previously subject to the City Code as its place of
central management and control was outside the UK, the Channel
Islands or the Isle of Man.
The Company is, accordingly, subject to the requirements of Rule
9 of the City Code, which requires that any person who acquires,
whether by a series of transactions over a period of time or not,
an Interest (as defined in the City Code) in shares which, taken
together with shares in which persons acting in concert with him
are interested, carry 30 per cent. or more of the voting rights of
a company which is subject to the City Code, will normally be
required to make a general offer to all of the remaining
shareholders to acquire their shares.
Similarly, when any person, together with any persons acting in
concert with him, is interested in shares which, in aggregate,
carry not less than 30 per cent. of the voting rights of such a
company but not more than 50 per cent. of such voting rights, a
general offer will normally be required if any further interests in
shares are acquired by any such person, or any person acting in
concert with him.
An offer under Rule 9 of the City Code must be made in cash and
at the highest price paid by the person required to make the offer,
or any person acting in concert with him, for any interest in
shares in the company during the 12 months prior to the
announcement of the offer.
Rule 9 of the City Code further provides, inter alia, that where
any person who, together with persons acting in concert with him,
holds over 50 per cent. of the voting rights of a company and
acquires an interest in shares which carry additional voting
rights, then they will not normally be required to make a general
offer to the other shareholders to acquire their shares. However,
the Panel may deem an obligation to make an offer to have arisen on
the acquisition by a single member of a concert party of an
interest in shares sufficient to increase his individual holding to
30 per cent. or more of a company's voting rights, or, if he
already holds more than 30 per cent. but less than 50 per cent., an
acquisition which increases his shareholding in that company.
Under the City Code, a concert party arises where persons acting
together pursuant to an agreement or understanding (whether formal
or informal) co-operate to obtain or consolidate control of, or to
frustrate the successful outcome of an offer for a company, subject
to the City Code. Control means an interest, or interests, in
shares carrying, in aggregate, 30 per cent. or more of the voting
rights of a company, irrespective of whether such interest or
interests give de facto control. The members of the Concert Party
are deemed to be acting in concert for the purposes of the City
Code.
5.4 Concert Party and participation by the Concert Party in the Subscription and Open Offer
The Company's largest Shareholder is the Company's Non-Executive
Chairman, Carlos J. Miguens, who currently is interested in: (i) in
aggregate, 592,240,677 Ordinary Shares, held both directly and
through his controlled entity, Cantomi, representing approximately
37.30 per cent. of the Existing Ordinary Shares; and (ii)
24,500,000 of the Options.
Carlos J. Miguens and each person listed in this paragraph 5.4
are considered to be acting in concert for the purposes of the City
Code. Included within the Concert Party is Gonzalo Tanoira, one of
the Company's Non-Executive Directors, who is interested in: (i) in
aggregate, 17,402,733 Ordinary Shares, held both directly and
through his controlled entity, Capifox, representing approximately
1.10 per cent. of the Existing Ordinary Shares; and (ii) 3,719,000
of the Options.
The aggregate interests of all the members of the Concert Party
comprises 726,630,466 Ordinary Shares representing approximately
45.76 per cent. of the Existing Ordinary Shares. In addition,
members of the Concert Party hold 28,219,000 Options.
Carlos J. Miguens, through his controlled entity, Cantomi, has
subscribed for 378,787,878 Subscription Shares and has also
undertaken to apply for all of his direct and Cantomi's Open Offer
Entitlements. In addition, Maria Luisa Miguens, Cinco Vientos and
Polinter SA, who are all members of the Concert Party, have
undertaken to take up their Open Offer Entitlements in full. Mr
Miguens has also undertaken to apply, through Cantomi, for all the
remaining Open Offer Shares under the Excess Application Facility,
other than the Open Offer Shares which he directly, Maria Luisa
Miguens, Cinco Vientos and Polinter SA have each undertaken to take
up in respect of their own pro-rata entitlements under the Open
Offer. Accordingly, Mr Miguens has undertaken to apply for, in
aggregate, 374,878,071 Open Offer Shares, directly and through
Cantomi. All other members of the Concert Party have undertaken not
to take up their Open Offer Entitlements or make any application
under the Excess Application Facility.
The table below sets out the proposed participation in the
Subscription and the Open Offer, along with current shareholdings,
Options of the members of the Concert Party as well as their and
the Concert Party's resulting interests in the Ordinary Shares of
the Company on the basis that there is no participation in the Open
Offer by Qualifying Shareholders other than as set out above.
Further information on each member of the Concert Party is provided
in paragraph 5.5 below.
Number
of
Ordinary
Shares
interested
in
following
Number Admission
of and
Total Ordinary exercise
number Shares Number of the
Number of Ordinary interested of Ordinary Options
of Ordinary Shares in upon Shares in full
Shares Number Number interested Admission interested as a
interested of of Open in upon as a Number in following percentage
as at Percentage Subscription Offer Admission percentage of Options Admission of the
the of Shares Shares following of the held and exercise further
date Existing proposed proposed completion Enlarged by Concert of the enlarged
of the Ordinary to be to be of the Share Party Options share
Name Circular Shares acquired acquired Fundraising(4) Capital(4) members(2)(3) in full(5) capital
Cantomi
Uruguay 371,462,565
SA(1) 578,578,651 36.44 378,787,878 (4) 1,328,829,094 56.22 24,500,000(2) 1,353,329,094 56.58
Carlos J.
Miguens 13,662,026 0.86 - 3,415,506 17,077,532 0.72 - 17,077,532 0.71
Carlos
Miguens
Jr. 291,654 0.02 - - 291,654 0.01 - 291,654 0.01
Maria Luisa
Miguens 18,000,000 1.13 - 4,500,000 22,500,000 0.95 - 22,500,000 0.94
Cinco Vientos
Uruguay
SA 45,897,392 2.89 - 11,474,348 57,371,740 2.43 57,371,740 2.40
Polinter
SA 24,339,930 1.53 - 6,084,982 30,424,912 1.29 - 30,424,912 1.27
Cristina
Miguens 24,485,645 1.54 - - 24,485,645 1.04 - 24,485,645 1.02
Gonzalo
Tanoira 10,691,576 0.67 - - 10,691,576 0.45 - 10,691,576 0.45
Capifox
SA(3) 6,711,157 0.42 - - 6,711,157 0.28 3,719,000(2) 10,430,157 0.44
Bárbara
Tanoira 1,324,145 0.08 - - 1,324,145 0.06 - 1,324,145 0.06
Leonor
Tanoira 1,324,145 0.08 - - 1,324,145 0.06 - 1,324,145 0.06
Santiago
Tanoira 1,324,145 0.08 - - 1,324,145 0.06 - 1,324,145 0.06
------------- ---------- ------------ ----------- -------------- ---------- ------------- ------------- ----------
Concert
Party
aggregate
total 726,630,466 45.76 378,787,878 396,937,401 1,502,355,745 63.57 28,219,000 1,530,574,745 64.00
------------- ---------- ------------ ----------- -------------- ---------- ------------- ------------- ----------
Other
Shareholders 830,287,923 54.24 - - 861,119,139 36.43 - 861,119,139 36.00
------------- ---------- ------------ ----------- -------------- ---------- ------------- ------------- ----------
Total 1,556,918,389 100.00 378,787,878 396,937,401 2,363,474,884 100.00 28,219,000 2,391,693,884 100.00
============= ========== ============ =========== ============== ========== ============= ============= ==========
Notes:
(1) Carlos J. Miguens is deemed to be beneficially interested in
the Ordinary Shares held by Cantomi and accordingly, his current
aggregate holding is 592,240,677 Ordinary Shares.
(2) Options granted to Carlos J. Miguens (held through Cantomi)
and Gonzalo Tanoira (held through Capifox).
(3) Gonzalo Tanoira is deemed to be beneficially interested in
the Ordinary Shares held by Capifox and accordingly, his current
aggregate holding is 17,402,733 Ordinary Shares.
(4) Assuming no participation in the Open Offer by Qualifying
Shareholders, other than set out above, and that all Open Offer
Shares other than those to be taken up by Maria Luisa Miguens,
Cinco Vientos and Polinter SA are acquired by Carlos J. Miguens, as
set out above. In the event that the Open Offer is fully subscribed
and Cantomi receives no additional Open Offer Shares under the
Excess Application Facility, the holding of Cantomi would be
1,102,011,191 Ordinary Shares and Carlos J. Miguens resulting
aggregate holding would therefore be 1,119,088,723 Ordinary Shares
representing approximately 47.35 per cent. of the Enlarged Share
Capital and the Concert Party's aggregate holding would be
1,275,537,842 Ordinary Shares representing approximately 53.97 per
cent. of the Enlarged Share Capital.
(5) These figures reflect the assumptions set out in note (4)
above, that there is no participation in the Open Offer by
Qualifying Shareholders, other than as set out above, and on the
basis that all the Options held by members of the Concert Party are
exercised in full and that no other outstanding options are
exercised. In the event that only Carlos J. Miguens exercises his
Options, held through Cantomi, he would be interested in, in
aggregate, 1,370,406,626 Ordinary Shares representing approximately
57.39 per cent. of the then enlarged share capital.
5.5 Information on each member of the Concert Party
Carlos J. Miguens: Carlos is the Company's Non-Executive
Chairman. Previously he was president of the flagship company of
the family, Quilmes Brewery, until it was sold to Ambev in 2004.
Carlos has been president, director and shareholder of a number of
companies, including S.A. San Miguel ("San Miguel"), a global
citrus producer, Minera El Desquite, and Central Puerto SA , a
power generator in Argentina.
Cantomi: Cantomi is a company incorporated under the laws of
Uruguay on 2 May 2005, with registration number RUT 21 515861 0017.
Cantomi is wholly owned by Carlos J. Miguens and CJM Trust, of
which Carlos J. Miguens is the sole beneficiary. The directors of
Cantomi are Carlos J. Miguens, Santiago J. Caino, Julio C. Castro
and Andrea P. Torres and the registered address is 25 de Mayo 444
of. 401, Montevideo CP 11000.
Carlos Miguens Jr.: Carlos Miguens Jnr is the son of Carlos J.
Miguens. He is currently residing in Sao Paulo, Brazil and works
for Patria Investments.
Maria Luisa (Luisa) Miguens: Luisa is the sister of Carlos J.
Miguens, and her occupation is an architect. Luisa is a shareholder
of several companies in which her brothers and sister are also
shareholders, including San Miguel, Central Puerto and Intelligent
Energy Holdings Limited, a fuel cell producer listed on the London
Stock Exchange.
Cinco Vientos: Cinco Vientos is a holding company incorporated
under the laws of Uruguay on 10 August 2000, with registration
number RUT 21 432934 0010. Cinco Vientos is wholly beneficially
owned by Maria Luisa Miguens and her sons and daughters, Leonor
Tanoira, Barbara Tanoira, Santiago Tanoira, Gonzalo Tanoira and
Javier Tanoira. The directors of Cinco Vientos are Maria Luisa
Miguens, Santiago J. Caino, Julio C. Castro and Andrea P. Torres
and the registered address is 25 de Mayo 444 of. 401, Montevideo CP
11000.
Polinter SA: Polinter is a holding company incorporated under
the laws of Uruguay on 13 June 2000, with registration number RUT
21 429442 0013. Polinter is wholly owned by Diego Miguens and DMB
Trust, of which Diego is the sole beneficiary. The directors of
Polinter are Diego, Santiago J. Caino, Julio C. Castro and Andrea
P. Torres and the registered address is 25 de Mayo 444 of. 401,
Montevideo CP 11000. Diego is the brother of Carlos J. Miguens,
Mrs. Maria Luisa Miguens and Mrs. Cristina Miguens. Diego is a polo
horse breeder and agribusiness investor. He holds several
investments with his brother Carlos and his two sisters.
Cristina Miguens: Christina is the sister of Carlos J. Miguens,
Mrs. Maria Luisa Miguens and Mr. Diego Miguens and her occupation
is an industrial engineer. Cristina is the owner and editor in
chief of Sophia, a womens' magazine in Argentina. Cristina is an
investor in several companies with her brothers and sister.
However, she holds no directorships in any of the family's
businesses.
Gonzalo Tanoira: Gonzalo is a Non-Executive Director of the
Company and is the son of Mrs. Maria Luisa Miguens. Gonzalo is a
director and member of the audit committee of SA San Miguel and
member of the board of directors of a number of other companies.
Previously Gonzalo worked for Bear Stearns & Co. (New York) in
investment banking division for Latin America and was an associate
at Booz Allen & Hamilton in its Buenos Aires office. He was
also general manager of MB Holding, the private equity group that
managed the Argentine interests of the Miguens family. He is a
shareholder in all of the companies where the rest of the family
has invested. He holds an MBA from the Wharton School of the
University of Pennsylvania.
Capifox: Capifox is a holding company incorporated under the
laws of Uruguay on 3 May 2005, with registration number RUT 21
515024 0016. Capifox is wholly owned by Gonzalo Tanoira and his
mother, Mrs. Maria Luisa Miguens. The directors of Capifox are
Gonzalo Tanoira, Santiago J. Caino, Julio C. Castro and Andrea P.
Torres and the registered address is 25 de Mayo 444 of. 401,
Montevideo CP 11000.
Barbara Tanoira: Barbara is the sister of Gonzalo Tanoira, whose
occupation is a graphic designer. Barbara is married and the mother
of five daughters. She works in graphic design and takes care of
her house and family. She is a shareholder in some of the companies
where the rest of the family has invested.
Leonor Tanoira: Leonor is the sister of Gonzalo Tanoira, whose
occupation is a business administrator. Leonor is married to a
professional polo player and spends most of her time travelling
around the world accompanying her husband while he plays polo. She
is a shareholder in some of the companies where the rest of the
family has invested. She was the founder and general manager of
Bully SA, a cashmere importer.
Santiago Tanoira: Santiago is the brother of Gonzalo Tanoira and
is a polo player. Santiago is married and spends most of his time
playing polo internationally. He is a shareholder in some of the
companies where the rest of the family has invested.
5.6 Related Party Transaction
The participation in the Fundraising by Carlos J. Miguens
(directly and through his controlled entity Cantomi), as set out in
paragraph 5.4 above, will be a related party transaction for the
purposes of Rule 13 of the AIM Rules for Companies, as (i) Mr
Miguens is a Director of the Company; and (ii) the aggregate
subscription by Carlos J. Miguens (directly and through his
controlled entity Cantomi) pursuant to the Fundraising for up to
374,878,071 New Shares will exceed 5 per cent. in certain of the
class tests (as that term is defined in the AIM Rules for
Companies).
Accordingly, the Directors (excluding Mr Miguens) confirm that,
having consulted with the Company's nominated adviser, Strand
Hanson, they consider the terms of the participation by Cantomi in
the Fundraising to be fair and reasonable insofar as Shareholders
are concerned, and in the best interests of Shareholders and of the
Company as a whole.
6. Rule 9 Waiver and Whitewash Resolution
Following consultation by the Company, the Panel has confirmed
the shareholdings of Carlos J. Miguens and certain members of his
extended family, including Gonzalo Tanoira, constitute a 'concert
party' under the City Code. Details of the individual shareholders
who qualify as the Concert Party and further information on the
members of the Concert Party are set out in paragraphs 5.4 and 5.5
above.
Carlos J. Miguens' participation in the Subscription and the
Open Offer, directly and through Cantomi, will increase his
aggregate percentage shareholding of the Company's issued share
capital and will also result in an increase in the Concert Party's
aggregate percentage to over 50 per cent. of the Company's issued
share capital and as such prompt a mandatory offer under Rule 9 of
the City Code.
Under Note 1 of the Notes on the Dispensations from Rule 9 of
the City Code, the Panel may waive the requirement for a general
offer to be made in accordance with Rule 9 of the City Code if,
inter alia, the shareholders of the company who are independent of
the person who would otherwise be required to make an offer, and
any person acting in concert with him, pass an ordinary resolution
on a poll at a general meeting or by way of a written resolution
approving such a waiver.
Accordingly, the Company proposes that the Independent
Shareholders waive the obligation on Carlos J. Miguens and the
Concert Party to make a mandatory offer under Rule 9 of the City
Code, which would otherwise arise as a result of Carlos J. Miguens'
participation in the Subscription and the Open Offer.
The Panel has agreed, subject to the passing of the Whitewash
Resolution by the Independent Shareholders on a poll at the General
Meeting, to waive the requirement under Rule 9 of the City Code for
the Concert Party, collectively and/or individually, to make a
mandatory offer for the Ordinary Shares not already owned by it or
persons connected with it as would otherwise arise on Carlos J.
Miguens' participation in the Subscription and the Open Offer.
The Panel has agreed to the Rule 9 Waiver on the basis that the
Independent Directors, who have been so advised by Strand Hanson,
consider the terms of the Rule 9 Waiver to be fair and reasonable
and in the best interest of the Independent Shareholders and the
Company as a whole.
In addition, Carlos J. Miguens and Gonzalo Tanoira (through
Cantomi and Capifox respectively) both hold the Options, details of
which are also set out in paragraph 5.4 above. As part of the 2014
Fundraising, the Company previously obtained the approval of the
Independent Shareholders to a waiver of the obligation on the
Concert Party to make a mandatory offer under Rule 9 of the City
Code in respect of the exercise of any of the Options held by the
Concert Party. Accordingly, the Concert Party would not be obliged
to make a mandatory offer for the remaining Ordinary Shares under
Rule 9 of the City Code in the event of an acquisition of an
interest in shares arising from the exercise by Carlos J. Miguens
or Gonzalo Tanoira, as members of the Concert Party, of any of the
Options.
7. Potential voting rights of the Concert Party
7.1 The Concert Party
If the Resolutions are passed at the General Meeting and
Admission is effective, on the assumption that:
7.1.1 the Options are exercised in full; and
7.1.2 no other options or convertibles are awarded or exercised
and no other shares are issued, the Company's issued share capital
would increase to 2,391,693,884 Ordinary Shares.
On the basis of such assumptions, in the event of no
participation in the Open Offer by Qualifying Shareholders, other
than the members of the Concert Party as set out above, and that
all Open Offer Shares are acquired by Carlos J. Miguens (both
directly and through Cantomi), Maria Luisa Miguens, Cinco Vientos
and Polinter SA, the Concert Party's maximum interest in Ordinary
Shares would be, in aggregate, 1,530,574,745 Ordinary Shares and
the Concert Party's aggregate holding would constitute
approximately 64.00 per cent. of the then voting rights in the
Company (as set out in the table and accompanying notes in
paragraph 5.4 above).
In the event that Cantomi received no Open Offer Shares under
the Excess Application Facility and on the basis of the above
assumptions, the Concert Party's maximum interest in Ordinary
Shares would be, in aggregate, 1,303,756,842 Ordinary Shares and
the Concert Party's aggregate holding would constitute
approximately 54.51 per cent. of the then voting rights in the
Company.
As a result of the Fundraising the Concert Party will be
interested in together 50 per cent. or more of the voting rights in
the Company, it will therefore be free (subject as set out below
and in Note 4 to Rule 9.1 of the City Code) to increase its
aggregate holding of Ordinary Shares without any obligation to make
a general offer for the Company under the provisions of Rule 9 of
the City Code.
7.2 Carlos J. Miguens and Cantomi
If the Resolutions are passed at the General Meeting and
Admission is effective, on the assumption that:
l only the Options held by Carlos J. Miguens through Cantomi are exercised in full; and
l no other options, warrants or convertibles are awarded or
exercised and no other shares are issued,
the Company's issued share capital would increase to
2,387,974,884 Ordinary Shares.
On the basis of such assumptions, in the event of no
participation in the Open Offer by Qualifying Shareholders, other
than the members of the Concert Party as set out above, and that
all Open Offer Shares are acquired by Carlos J. Miguens (both
directly and through Cantomi), Maria Luisa Miguens, Cinco Vientos
and Polinter SA, then Carlos J. Miguens' and Cantomi's maximum
interest in Ordinary Shares would be, in aggregate, 1,370,406,626
Ordinary Shares and his aggregate holding would constitute
approximately 57.39 per cent. of the then voting rights in the
Company (as set out in the table and accompanying notes in
paragraph 5.4 above).
In the event that Cantomi received no Open Offer Shares under
the Excess Application Facility and on the basis of the above
assumptions, Carlos J. Miguens maximum interest in Ordinary Shares
(both directly and through Cantomi) would be, in aggregate,
1,143,588,723 Ordinary Shares and his aggregate holding would
constitute approximately 47.89 per cent. of the then voting rights
in the Company.
In the event that the Ordinary Shares which Carlos J. Miguens
(both directly and through Cantomi) would then be interested in
together carry 30 per cent. or more of the voting rights but less
than 50 per cent. of the voting rights in the Company, neither
Carlos J. Miguens nor Cantomi may acquire an interest in any
further shares carrying voting rights in the Company (other than
pursuant to the exercise of the Options) without being subject to
the provisions of Rule 9 of the City Code.
In the event that the Ordinary Shares which Carlos J. Miguens
(both directly and through Cantomi) would then be interested in
carry 50 per cent. or more of the voting rights in the Company, he
would be free (both directly and through Cantomi) (subject as set
out below and in Note 4 to Rule 9.1 of the City Code) to increase
his aggregate holding of Ordinary Shares without any obligation to
make a general offer for the Company under the provisions of Rule 9
of the City Code.
8. Independent advice
Strand Hanson has provided advice to the Independent Directors
in relation to the Rule 9 Waiver in accordance with the
requirements of paragraph 4(a) of Appendix 1 to the City Code.
This advice was provided by Strand Hanson to only the
Independent Directors and, in providing such advice, Strand Hanson
has taken into account the Independent Directors' commercial
assessments.
The Independent Directors, who have been so advised by Strand
Hanson, consider that the approval of the waiver by the Panel of
any requirement for Carlos J. Miguens or for the members of the
Concert Party to make a general offer to shareholders under Rule 9
of the City Code, is fair and reasonable and in the best interests
of the Independent Shareholders and the Company as a whole.
9. Intentions of the Concert Party
The Concert Party has confirmed that it is not proposing,
following any increase in its shareholding as a result of the
Fundraising and the exercise of any of the Options, to seek any
change in the general nature of the Company's business, and has
confirmed that each individual member of the Concert Party does not
intend to take any action (whether acting in its capacity as a
Director or a Shareholder) to alter the management of the Company,
the continued employment of its employees (including any material
change in conditions of employment), employer contributions into
the Company's pension schemes, the location of the Company's places
of business, and the deployment of the Company's fixed assets.
The Directors intend to continue to conduct the business of the
Company in the same manner as it is currently conducted and there
are no plans to introduce any material change to the business of
the Company.
The members of the Concert Party have no intention to cause the
Company to cease to maintain any of the trading facilities in
respect of the Ordinary Shares.
In the event that the Fundraising and Rule 9 Waiver are approved
at the General Meeting, neither Carlos J. Miguens, Cantomi nor any
member of the Concert Party will be restricted from making an offer
for the Company.
10. Relationship Agreement
Carlos J. Miguens and Cantomi entered into a Relationship
Agreement with Strand Hanson and the Company in connection with the
2016 Fundraising, which resulted in Carlos J. Miguens' aggregate
percentage shareholding in the Company (taken together with
Cantomi's percentage shareholding in the Company) exceeding 30 per
cent. of the issued share capital of the Company. The principal
purpose of the Relationship Agreement is to ensure (i) that the
Company is able to comply with the AIM Rules and will be carrying
on an independent business as its main activity; (ii) that all
transactions and arrangements between the Group, Carlos J. Miguens,
Cantomi and their respective associates are at arm's length and on
normal commercial terms; (iii) that Carlos J. Miguens, Cantomi and
each of their associates will not take any action that would have
the effect of preventing the Company from complying with its
obligations under the AIM Rules, or propose or procure the proposal
of a shareholder resolution which is intended or appears to be
intended to circumvent the proper application of the AIM Rules or
the Disclosure and Transparency Rules; and (iv) that the Board will
manage the Company in the interests of the Shareholders as a
whole.
The Relationship Agreement will continue for so long as (a) the
Ordinary Shares remain admitted to trading on AIM and (b) Carlos J.
Miguens (both directly and through Cantomi) hold, in aggregate, at
least 20 per cent. of the Company's issued ordinary share
capital.
11. General Meeting
A General Meeting of the Company, notice of which will be set
out at the end of the Circular, is to be held at the offices of
Stephenson Harwood LLP, 1 Finsbury Circus, London, EC2M 7SH on 7
December 2017 at 11.00 a.m. at which the Resolutions will be
proposed. Please note that the summary and explanation set out
below is not the full text of the Resolutions and Shareholders
should review the full text of the Resolutions before returning
their Forms of Proxy.
The Resolutions can be summarised as follows:
11.1 Resolution 1, which will be proposed as an ordinary
resolution, seeks the approval of the Independent Shareholders to
waive the obligation on Carlos J. Miguens and the Concert Party
which would otherwise arise under Rule 9 of the City Code as a
result of the participation of Carlos J. Miguens in the
Subscription and the Open Offer.
11.2 Resolution 2, which will be proposed as an ordinary
resolution, is to authorise the Directors to allot relevant
securities up to an aggregate nominal value of: (i) GBP7,757,252.79
in connection with the Subscription and the Open Offer; and (ii)
otherwise for the allotment of equity securities up to an aggregate
nominal amount of GBP7,878,249.61; and
11.3 Resolution 3, which will be proposed as a special
resolution and which is subject to the passing of Resolution 2,
disapplies statutory pre-emption rights, provided that such
authority shall be limited to, inter alia, the allotment of equity
securities in connection with the Subscription and otherwise for
the allotment of equity securities up to an aggregate nominal
amount of GBP2,363,474.88.
Resolution 2 authorises the allotment of such number of Ordinary
Shares as are necessary for the Subscription and the Open Offer, as
well as providing the Directors with a standing authority to allot
equity securities up to an aggregate nominal value of
GBP7,878,249.61 (being 33.3 per cent. of the Enlarged Share
Capital). Similarly, Resolution 3 authorises the disapplication of
statutory pre-emption rights in respect of such number of Ordinary
Shares as are necessary for the Subscription, as well as providing
the Directors with a standing authority to allot equity securities
otherwise than in accordance with statutory pre-emption rights up
to an aggregate nominal value of GBP2,363,474.88 (being 10 per
cent. of the Enlarged Share Capital). It is considered prudent to
maintain the flexibility that such authorities provide and
therefore to refresh the authorities that were approved at the
Company's last annual general meeting.
Only the Independent Shareholders will be entitled to vote on
Resolution 1 which will be conducted on a poll at the General
Meeting.
12. Importance of vote
The Fundraising is required in order to be able to fund the
exercise of the Calcatreu Option. Shareholders should note that in
the event the Resolutions are not approved and the Fundraising does
not complete, the Company would need immediately to seek
alternative sources of funds to be able to exercise the Calcatreu
Option. The Directors are unable to provide any assurance that
alternative financing or re-financing could immediately be secured
or, that if it were secured, it would be on terms as favourable to
the Company or would not result in a substantial dilution of
Shareholders' interests.
13. Recommendations
13.1 The Independent Directors, who have been so advised by the
Company's financial adviser, Strand Hanson, consider the terms of
the Fundraising to be fair and reasonable and in the best interests
of the Independent Shareholders and of the Company as a whole.
Accordingly, the Independent Directors recommend that the
Independent Shareholders vote in favour of the Whitewash Resolution
(Resolution 1) at the General Meeting as they intend to do in
respect of their entire holdings which amount to interests in
6,364,735 Ordinary Shares, representing approximately 0.40 per
cent. of the Existing Ordinary Shares.
13.2 The Directors consider that the Fundraising is in the best
interests of the Company and Shareholders as a whole. Accordingly,
the Directors recommend that the Shareholders vote in favour of the
Share Authority Resolutions (Resolutions 2 and 3) at the General
Meeting as they intend to do in respect of their entire holdings
which amount to interests in 616,008,145 Ordinary Shares,
representing approximately 38.8 per cent. of Existing Ordinary
Shares.
Voting on the Whitewash Resolution will be by means of a poll at
the General Meeting of Independent Shareholders.
Members of the Concert Party will not vote on the Whitewash
Resolution at the General Meeting.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2017
Record Date for entitlements under 6.00 p.m. on
the Open Offer 17 November
Announcement of the Fundraising 7.00 a.m. on
21 November
Existing Ordinary Shares marked
'ex-entitlement' by the London Stock 8.00 a.m. on
Exchange 21 November
Publication and posting of the Circular,
the Form of Proxy and, to Qualifying
Non-Crest Shareholders only, the
Application Form 21 November
Open Offer Entitlements and Excess
CREST Open Offer Entitlements credited
to CREST stock accounts of Qualifying
CREST Shareholders 22 November
Latest recommended time and date
for requesting withdrawal of Open
Offer Entitlements and Excess CREST 4.30 p.m. on
Open Offer Entitlements from CREST 30 November
Latest time and date for depositing
Open Offer Entitlements and Excess
CREST Open Offer Entitlements into 3.00 p.m. on
CREST 1 December
Latest time and date for splitting
Application Forms (to satisfy bona 3.00 p.m. on
fide market claims only) 4 December
Latest time and date for receipt
of Forms of Proxy for the General 11.00 a.m. on
Meeting 5 December
Latest time and date for receipt
of completed Application Forms and
payment in full under the Open Offer
or settlement of relevant CREST 11.00 a.m. on
instructions (as appropriate) 6 December
General Meeting 11.00 a.m. on
7 December
Results of the General Meeting and
the Fundraising expected to be announced 7 December
Admission and dealings in the Subscription
Shares and Open Offer Shares expected 8.00 a.m. on
to commence on AIM 8 December
Expected date for CREST accounts
to be credited with Subscription
Shares and Open Offer Shares in
uncertificated form 8 December
Expected date for dispatch of share
certificates in respect of Subscription
Shares and Open Offer Shares to
be issued in certificated form by 15 December
Notes:
Each of the times and dates above are subject to change.
References to time in this announcement, the Circular, the
Application Form and the Form of Proxy are to London time unless
otherwise stated. If any of the above times and/or dates change,
the revised time(s) and/or date(s) will be notified to shareholders
by announcement through a Regulatory Information Service.
DEFINITIONS AND GLOSSARY
The following definitions and technical terms apply throughout
this announcement, unless the context otherwise requires:
"Act" the Companies Act 2006 (as amended);
"Admission" the admission of the New Shares
to trading on AIM becoming effective
in accordance with Rule 6 of
the AIM Rules, expected to be
on or around 8 December 2017;
"Ag" the chemical symbol for silver;
"AIM" the AIM market of the London
Stock Exchange;
"AIM Rules" the AIM Rules for Companies
and the AIM Rules for Nominated
Advisers;
"AIM Rules for the AIM Rules for Companies
Companies" (including the guidance notes)
published by the London Stock
Exchange from time to time;
"AIM Rules for the AIM Rules for Nominated
Nominated Advisers" Advisers published by the London
Stock Exchange from time to
time;
"Application Form" the personalised application
form which will accompany the
Circular (where appropriate)
on which Qualifying Non-CREST
Shareholders (other than certain
Overseas Shareholders) may apply
for Open Offer Shares under
the Open Offer;
"Au" the chemical symbol for gold;
"AuEq" gold equivalent;
"Business Day" a day (other than a Saturday
or Sunday or public holiday)
on which commercial banks are
open for general business in
London;
"Calcatreu Option" the option granted to the Company
dated 24 April 2017 to purchase
the Calcatreu gold-silver asset
in Rio Negro Province, Argentina
for US$15 million;
"Cantomi" Cantomi Uruguay SA, a member
of the Concert Party being a
company controlled by Carlos
J. Miguens;
"Capifox" Capifox SA, a member of the
Concert Party;
"certificated form" not in an uncertificated form;
"Cinco Vientos" Cinco Vientos Uruguay SA, a
member of the Concert Party;
"Circular" the circular to be sent to Shareholders
dated 21 November 2017, setting
out details of the Subscription,
the Open Offer and the Rule
9 Waiver, and containing the
Notice of General Meeting;
"City Code" the City Code on Takeovers and
Mergers;
"Company" or "Patagonia Patagonia Gold Plc;
Gold"
"Concert Party" the members of the concert party,
further details of which appear
in paragraph 5.5 of this announcement;
"Concert Party Carlos J. Miguens and Gonzalo
Directors" Tanoira;
"Conditions" the conditions, which will be
set out in full in the Circular,
which have to be satisfied to
enable the Subscription and
the Open Offer to be completed
in accordance with their terms
and which include, inter alia,
the passing of the Resolutions;
"CREST" the electronic systems for the
holding and transfer of shares
in dematerialised form operated
by Euroclear UK & Ireland Limited;
"CREST Regulations" the Uncertificated Securities
Regulations 2001 (SI 2001 No.
3755), as amended from time
to time;
"Directors" or the directors of the Company;
"the Board"
"Enlarged Share the issued ordinary share capital
Capital" of the Company as enlarged by
the issue of the New Shares;
"Euroclear" Euroclear UK & Ireland Limited,
the operator of CREST;
"Excess Application the arrangement pursuant to
Facility" which Qualifying Shareholders
may apply for any number of
Open Offer Shares in excess
of their Open Offer Entitlement
provided that they have agreed
to take up their Open Offer
Entitlement in full;
"Excess CREST Open in respect of each Qualifying
Offer Entitlement" CREST Shareholder, the entitlement
(in addition to his/her Open
Offer Entitlement) to apply
for Open Offer Shares pursuant
to the Excess Application Facility,
which is conditional on him/her
taking up his/her Open Offer
Entitlement in full;
"Excess Open Offer in respect of each Qualifying
Entitlement" Shareholder, the entitlement
(in addition to his/her Open
Offer Entitlement) to apply
for Open Offer Shares pursuant
to the Excess Application Facility,
which is conditional on him/her
taking up his/her Open Offer
Entitlement in full;
"Existing Ordinary the 1,587,749,605 Ordinary Shares
Shares" in issue at the date of this
announcement;
"FCA" the Financial Conduct Authority
of the United Kingdom;
"Form of Proxy" the form of proxy for use in
relation to the General Meeting
which will accompany the Circular;
"FSMA" the UK Financial Services and
Markets Act 2000 (as amended
from time to time);
"Fundraising" together, the Subscription and
the Open Offer;
"g/t" grammes per tonne;
"General Meeting" the general meeting of the Company
to be held at the offices of
Stephenson Harwood LLP, 1 Finsbury
Circus, London, EC2M 7SH, on
7 December 2017 at 11.00 a.m.;
"Group" the group of which the Company
and its subsidiary undertakings
are members;
"Independent Directors" the Directors other than the
Concert Party Directors;
"Independent Shareholders" means the Shareholders, other
than the members of the Concert
Party;
"Indicated Resource" that part of a Mineral Resource
for which quantity, grade or
quality, densities, shape and
physical characteristics are
estimated with sufficient confidence
to allow the application of
modifying factors in sufficient
detail to support mine planning
and evaluation of the economic
viability of the deposit. Geological
evidence is derived from adequately
detailed and reliable exploration,
sampling and testing and is
sufficient to assume geological
and grade or quality continuity
between points of observation;
"Inferred Resource" that part of a Mineral Resource
for which quantity and grade
or quality are estimated on
the basis of limited geological
evidence and sampling. Geological
evidence is sufficient to imply
but not verify geological and
grade or quality continuity;
"ISIN" International Securities Identification
Number;
"Issue Price" 1 pence per New Share;
"JORC" the Joint Ore Reserves Committee:
The Australasian Code for Reporting
of Exploration Results, Mineral
Resources and Ore Reserves,
as published by the Joint Ore
Reserves Committee of The Australasian
Institute of Mining and Metallurgy,
Australian Institute of Geoscientists
and Minerals Council of Australia;
"London Stock Exchange" London Stock Exchange plc;
"m(3) " Cubic metres;
"Measured Resource" that part of a Mineral Resource
for which quantity, grade or
quality, densities, shape, and
physical characteristics are
estimated with confidence sufficient
to allow the application of
modifying factors to support
detailed mine planning and final
evaluation of the economic viability
of the deposit. Geological evidence
is derived from detailed and
reliable exploration, sampling
and testing and is sufficient
to confirm geological and grade
or quality continuity between
points of observation where
data and samples are gathered;
"Mineral Resource" a concentration or occurrence
of solid material of economic
interest in or on the Earth's
crust in such form, grade or
quality and quantity that there
are reasonable prospects for
eventual economic extraction.
The location, quantity, grade
or quality, continuity and other
geological characteristics of
a Mineral Resource are known,
estimated or interpreted from
specific geological evidence
and knowledge, including sampling;
"Money Laundering the Money Laundering Regulations
Regulations" 2007 (SI 2007/2157) (as amended);
"Mt" million tonnes;
"New Shares" together, the Subscription Shares
and the Open Offer Shares;
"Notice of General the notice convening the General
Meeting" Meeting which will be set out
at the end of the Circular;
"Open Offer" the conditional invitation made
by the Company to Qualifying
Shareholders to subscribe for
the Open Offer Shares at the
Issue Price on the terms and
subject to the conditions to
be set out in the Circular and,
in the case of Qualifying Non-CREST
Shareholders, in the Application
Form;
"Open Offer Entitlement" the pro rata entitlement of
a Qualifying Shareholder, pursuant
to the Open Offer, to apply
to subscribe for 1 Open Offer
Shares for every 4 Existing
Ordinary Shares registered in
their name as at the Record
Date;
"Open Offer Shares" 396,937,401 new Ordinary Shares
to be issued by the Company
pursuant to the Open Offer subject,
inter alia, to the passing of
the Resolutions;
"Options" the existing share options held
by the Concert Party Directors
over, in aggregate, 28,219,000
Ordinary Shares;
"Ordinary Shares" the ordinary shares of 1 pence
each in the capital of the Company;
"Overseas Shareholders" Shareholders with registered
addresses in, or who are citizens,
residents or nationals of, jurisdictions
outside the UK;
"oz" ounces;
"Panel" the Panel on Takeovers and Mergers;
"PFS" pre-feasibility study;
"Prospectus Rules" the Prospectus Rules made in
accordance with EU Prospectus
Directive 2003/71/EC published
by the FCA pursuant to Part
VI of FSMA;
"Qualifying CREST Qualifying Shareholders holding
Shareholders" Existing Ordinary Shares which,
on the register of members of
the Company on the Record Date,
are in uncertificated form;
"Qualifying Non-CREST Qualifying Shareholders holding
Shareholders" Existing Ordinary Shares which,
on the register of members of
the Company on the Record Date,
are in certificated form;
"Qualifying Shareholders" holders of Existing Ordinary
Shares on the register of members
of the Company at the close
of business on the Record Date
with the exclusion (subject
to exemptions) of persons with
a registered address or located
or resident in a Restricted
Jurisdiction;
"Record Date" the record date for the Open
Offer, being 6.00 p.m. on 17
November 2017;
"Registrars", "Receiving Computershare Investor Services
Agent" or "Computershare" PLC of The Pavilions, Bridgwater
Road, Bristol BS99 6AH;
"Relationship Agreement" the relationship agreement between
Carlos J. Miguens, Cantomi,
Strand Hanson and the Company
dated 21 April 2016;
"Resolutions" the resolutions proposed to
be passed at the General Meeting
as numbered 1 to 3 in the Notice
of General Meeting;
"Restricted Jurisdiction" any jurisdiction where local
laws or regulations may result
in a significant risk of civil,
regulatory or criminal exposure
for the Company if information
or documentation concerning
the proposals is sent or made
available to Shareholders in
that jurisdiction including,
without limitation, the United
States, Canada, Australia, the
Republic of South Africa and
Japan;
"Rule 9 Waiver" means the waiver by the Panel
of any obligation which would
otherwise be imposed on the
Concert Party, either individually
or collectively, under Rule
9 of the City Code, as a result
of the Concert Party's participation
in the Subscription and the
Open Offer;
"Securities Act" the US Securities Act of 1933,
as amended from time to time
and the rules and regulations
promulgated thereunder;
"Share Authority means the resolutions to grant
Resolutions" the Directors authority to allot
the Subscription Shares and
the Open Offer Shares and the
related disapplication of statutory
pre-emption rights and the renewal
of the general on-going authorities
taken at the previous annual
general meeting of the Company,
to be proposed at the General
Meeting and set out in the Notice
of General Meeting as the resolutions
numbered 2 and 3;
"Shareholder" a holder of Ordinary Shares;
"Strand Hanson" Strand Hanson Limited, the Company's
nominated and financial adviser;
"Subscription" the conditional subscription
for the Subscription Shares
pursuant to the Subscription
Letter;
"Subscription Letter" the letter of subscription entered
into between the Company and
Cantomi in connection with the
Subscription;
"Subscription Shares" 378,787,878 new Ordinary Shares
to be conditionally placed for
cash pursuant to the Subscription
Letter and whose allotment and
issue is conditional, inter
alia, on the passing of the
Resolutions at the General Meeting;
"Trilogy" Trilogy Mining Corporation;
"UK" or "United the United Kingdom of Great
Kingdom" Britain and Northern Ireland;
"UK Listing Authority" the UK Listing Authority, being
or "UKLA" the FCA acting as competent
authority for the purposes of
Part VI of FSMA;
"uncertificated recorded on the relevant register
form" or other record of the share
or other security confirmed
as being held in uncertificated
form in CREST, and title to
which, by virtue of the CREST
Regulations, may be transferred
by way of CREST;
"United States" the United States of America,
its territories and possessions,
any State of the United States
and the District of Columbia;
"USE" unmatched stock event;
"Whitewash Resolution" the ordinary resolution of the
Independent Shareholders concerning
the waiver of obligations under
Rule 9 of the City Code to be
proposed at the General Meeting
in connection with the Concert
Party's participation in the
Subscription and the Open Offer
and set out in the Notice of
General Meeting as the resolution
numbered 1;
"2014 Fundraising" the subscription and open offer
of, in aggregate, 182,688,427
Ordinary Shares at 4.5 pence
per share which completed on
9 December 2014; and
"2016 Fundraising" the subscription and open offer
of, in aggregate, 462,962,962,
Ordinary Shares at 1.5 pence
per share which completed on
11 May 2016.
In this announcement:
l all references to "pounds", "GBP", "pence" or "p" are to the
lawful currency of the United Kingdom;
l words importing the singular shall include the plural and vice
versa, and words importing the masculine gender shall include the
feminine or neutral gender;
l all references to legislation are to English legislation
unless the contrary is indicated, and any reference to any
provision of any legislation includes any amendment, modification,
re-enactment or extension thereof; and
l all times referred to are London time unless otherwise stated
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOEBBLLLDFFFFBZ
(END) Dow Jones Newswires
November 21, 2017 02:01 ET (07:01 GMT)
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