TIDMSULA
RNS Number : 4733O
Sula Iron & Gold PLC
21 August 2017
SULA IRON & GOLD PLC
("Sula" or the "Company" or the "Group")
21 August 2017
Equity subscription to raise GBP900,000
Highlights
-- Subscription to raise GBP900,000 (gross) at a price of 0.146p
per Ordinary Shares by investors secured by Riverfort Global
Capital Ltd;
-- On admission of the subscription shares the Company will
enter into an 'equity sharing' agreement with the Investors for an
investment of GBP500,000;
-- As part of the financing and to maximise funds available for
exploration, the Board has agreed to a 50 per cent. reduction in
its salaries until December 2017;
-- Net proceeds of the subscription are expected to fully fund
the Company's exploration activities well into 2018;
-- Final batch of assays from the recently completed 5,184m
Phase III drill programme and regional surface sample programme
have left Sierra Leone bound for ALS Laboratories;
-- Potential for a maiden resource at Sanama Hill, dependent on
assay results from Phase III drill programme; and
-- Once the dry season returns to West Africa, the Company's
exploration activities will be focused on continued regional
surface sampling to ground-truth targets identified from the Tect
structural survey and thereby identify future drill targets.
Sula (AIM: SULA), the gold exploration company focused on Sierra
Leone, is pleased to announce that it has secured subscriptions
from D-Beta One EQ Ltd and Cuart Investments PCC Ltd (the
"Investors") via Riverfort Global Capital Ltd ("Riverfort") for an
aggregate of GBP900,000 through the issue of 616,438,356 new
ordinary shares 0.1p of the Company ("Ordinary Shares") at a price
of 0.146p per Ordinary Share ("Subscription Price")
("Subscription"). The Board of Sula has concluded that the
Subscription is in the best interest of the Company and its
shareholders as the net proceeds are expected to fund the Group's
day-to-day operational costs well into 2018.
Of the gross proceeds of the Subscription, GBP0.4 million will
be retained by the Company for general working capital and the
balance of GBP0.5 million will, subject to admission of the
subscription shares to trading on AIM, be paid by the Company to
the Investors pursuant to an 'equity sharing' agreement ("Sharing
Agreement"), which entitles the Company to receive back the payment
of GBP0.5 million on a pro-rata monthly basis until September 2018,
subject to adjustment upwards or downwards each month depending on
the Company's share price at the time as against a benchmark price
of 0.161 pence per Ordinary Share ('Settlement Formula'). The
Sharing Agreement provides the opportunity for the Company to
benefit from positive future share price performances and will come
into effect upon admission of the Subscription shares to trading on
AIM.
Roger Murphy, CEO of Sula, stated;
"We welcome the support of our new investors and the confidence
that they have in us to deliver significant shareholder returns.
The Subscription is intended to cover the Group's activities well
into 2018, enabling us to continue our planned development of the
project. I strongly believe that this deal secures good capital at
a tough time for junior explorers. Sula is facing a busy period
with the large final batch of results from our recently completed
5,184m drill programme on Ferensola due in mid-September 2017. At
the same time the results from our regional surface sample
programme that was designed to assess some of the other targets for
gold mineralisation will become available. Our next drilling
campaign will be driven by these results"
Operational Outlook
Samples from the final 11 drill holes completed as part of the
recent Phase III drill campaign, along with samples collected as
part of the regional soil sample programme, have left Sierra Leone
and are en route to the ALS Laboratories in Ireland. Results from
the first three holes from this programme were announced on 3
August 2017 and the results from the remaining 11 drill holes will
be released as soon as they become available, which is expected to
be around mid to late September 2017.
Once this information is available, and during the rainy season
when field work is difficult, a period of technical review and
geological interpretation will commence followed by a peer review
by technical specialists in the field of structural geology and
Archaean Greenstone rocks like those at the Ferensola Gold
Project.
If the data allows, Sula will seek to calculate a maiden
resource on the Sanama Hill asset. Shareholders should be aware
that this would be maiden resource and not a global resource and
would only reflect a portion of the potential of our overall
Ferensola licence area where evidence for multiple gold bearing
occurrences are evident.
Sula will also use this period of interpretation and review to
assess the most cost-effective means to expand the Company's
understanding of the geology and gold endowment of the Ferensola
licence area, once field work becomes possible again. The Company
remains convinced that this endowment is very significant. Based on
the success of the recently completed programme, an extension of
the recent surface sample programme will be considered, to
investigate some of the structural and other potential gold
anomalies identified by Sula's prior work. This programme will
generate targets for future drilling campaigns.
The Subscription
Pursuant to the Subscription, 616,438,356 new Ordinary Shares
will be issued to the Investors secured by Riverfort at the
Subscription Price for an aggregate amount of GBP900,000 (before
expenses). GBP400,000 (gross) of the proceeds of the Subscription
(being 44 per cent. of the Subscription) will be retained by the
Company and GBP500,000 will be paid to the Investors pursuant to
the Sharing Agreement, under which the Investors will then make,
subject to the terms and conditions of the Sharing Agreement,
monthly settlements (subject to the Settlement Formula) to the
Company until September 2018 (the "End Date"), as detailed
below.
The Subscription Shares will, when issued, represent
approximately 19.77 per cent. of the Company's issued share capital
as enlarged by the Subscription Shares ("Enlarged Share
Capital").
Subject to confirmation by the Investors' solicitors to the
Company being received later today of their receipt of the
subscription funds from the Investors and the entering into by them
and the Company's solicitors of necessary undertakings in
connection with the performance of the Investors' payment
obligations at Admission, in addition to the Subscription, the
Company will enter into the Sharing Agreement, pursuant to which
the Company will pay GBP0.5 million (being 56 per cent. of the
gross proceeds of the Subscription) to the Investors. The Sharing
Agreement will enable the Company to share in any appreciation in
the Company's share price over a Benchmark Price (being 0.161p
pence per Ordinary Share).
The Sharing Agreement provides that the Company will receive
monthly settlement amounts adjusted by a quantity calculated by
comparing the share price at that time to the Benchmark Price. The
monthly settlement amounts for the Sharing Agreement is structured
to commence around one month following Admission of the
Subscription Shares.
The Sharing Agreement provides for a monthly payment to be made
by the Investors to the Company, being GBP41,666(except for the
first period which will be a partial month and adjusted
accordingly) (the "Monthly Payment"). This payment may be adjusted
up or down depending on whether the "Market Price", (calculated as
the average of the lowest ten daily volume weighted average prices
of the Ordinary Shares during the relevant month), is above or
below the Benchmark Price. If the Market Price is above the
Benchmark Price, then the Monthly Payment is increased based on the
following formula:
Settlement Formula
GBP41,666 - (51,369,863 Ordinary Shares x 0.75 x (Market Price -
Benchmark Price))
If the Market Price is below the Benchmark Price then the
Monthly Payment is reduced based on the following formula:
GBP41,666 - (51,369,863 Ordinary Shares x (Benchmark Price -
Market Price))
Assuming the Market Price equals the Benchmark Price on the date
of each and every settlement, the Company would have received
aggregate proceeds of GBP900,000 (before expenses) from the
Subscription and Sharing Agreement, made up of the GBP400,000 of
the Subscription initially retained by the Company and monthly
settlements totalling GBP500,000.
Under no circumstances will fluctuations in the Company's share
price result in any increase in the number of the Subscription
Shares issued by the Company or received by the Investors. The
Directors believe that a decline in the Company's share price would
not result in any advantage accruing to the Investors and the
Sharing Agreement allows both the Investors and the Company to
benefit from future share price appreciation. The Investors have
agreed to a lock up over the Subscription Shares until 13 September
2017 and have undertaken that neither they, nor any of their
investors or affiliates will hold any short position in the
Company's issued share capital.
Accordingly, application has been made for the Subscription
Shares to be admitted to trading on AIM ("Admission") and it is
expected that Admission will become effective and that dealings in
the Subscription Shares will commence at 8.00 a.m. on 22 August
2017. The Subscription Shares will rank pari passu in all respects
with the Company's existing Ordinary Shares and will be issued
fully paid.
Following Admission, the Company's Enlarged Share Capital will
comprise 3,118,769,065 Ordinary Shares. This figure may be used by
shareholders as the denominator for the calculations by which they
may determine if they are required to notify their interest in, or
a change to their interest in, the Company under the Financial
Conduct Authority's Disclosure and Transparency Rules.
For further information, please contact:
Sula Iron & Gold plc
Roger Murphy (CEO) +44 (0) 20 7583 8304
WH Ireland Limited (Nominated
Adviser and Broker)
Paul Shackleton / James
Bavister +44 (0) 20 7220 1666
VSA Capital Limited (Broker)
Andrew Raca
Blytheweigh (Public Relations) +44 (0) 20 3005 5000
Camilla Horsfall/ Nick Elwes +44 (0) 20 7138 3224
Ongeza Mining (Financial
and Technical Adviser)
Iain Macpherson / Ilja Graulich +27 (0) 11 469 0629
Prior to publication, certain information contained within this
announcement was deemed to constitute inside information for the
purposes of Article 7 of EU Regulation 596/2014 ("MAR"). In
addition, market soundings (as defined in MAR) were taken in
respect of the Subscription with the result that certain persons
became aware of inside information (as defined in MAR), as
permitted by MAR. Due to the publication of this announcement,
those persons that received inside information in a market sounding
are no longer in possession of such inside information relating to
the Company and its securities.
About Riverfort Global Capital
Riverfort Global Capital Ltd is authorised and regulated by the
FCA (Reference number 766760) and provides comprehensive and
innovative growth funding solutions spanning a range of alternative
funding sources from their network of specialist funds and family
offices.
The strategy of Riverfort is to develop and structure long term
capital & investment solutions for companies where the
Riverfort team believe in the investment thesis. The Riverfort
approach is flexible and combines both proprietary and co-investor
capital to solve the collective action problem ensuring companies
can achieve their capital funding objectives with less risk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOEMMGZRNGDGNZM
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