TIDMWSBN
RNS Number : 4531O
Wishbone Gold PLC
18 August 2017
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").
18 August 2017
Wishbone Gold Plc
("Wishbone Gold" or the "Company")
Wishbone Gold Plc / Index: AIM / Epic: WSBN / Sector: Natural
Resources
Fundraising, Investment Agreement and grant of Warrants
Highlights
-- Fundraising from institutional investors (the "Facility")
arranged by RiverFort Global Capital ("RiverFort")
-- Issue price under the Facility of 0.7 pence per new ordinary share
-- The Facility (which comprises a subscription of GBP0.8
million and an equity sharing agreement) to be used to fund the
Company's continuing operations, including general working capital
requirements
-- Up to US$2 million Investment Agreement ('Investment') with
YA II PN, Ltd arranged by Riverfort with an initial drawdown of
US$400,000 repayable on the first anniversary of the date of
drawdown. Any further tranches may be drawn down if agreed with the
Company and at YA II's absolute discretion
-- Grant of warrants
Richard Poulden, Chairman of Wishbone Gold, commented: "This is
the first stage in an overall funding relationship with RiverFort
that can lead to the funding of new deals at the project level. I
have worked with Brian Kinane, CEO of RiverFort, in the past and
have admiration for his skills in this area."
Graham Stirling, CIO of RiverFort, commented: "This innovative
financing structure offered to Wishbone Gold by RiverFort will
allow them to build on their solid progress to date. RiverFort
believes in the future potential of Wishbone Gold and this funding
is an integral part of assisting them in achieving this potential.
It underlines our faith in Wishbone Gold's Board's ability to
execute on their strategy."
Summary
Wishbone Gold Plc (AIM: WSBN), announces that it has agreed the
Facility, which has been organised by RiverFort, and consists of
two parts. The first part is a subscription to raise GBP0.8
million, before expenses, (the "Subscription") by way of a
subscription for 114,285,714 ordinary shares of 0.1 pence each (the
"Ordinary Shares") by a syndicate led by D-Beta One EQ Ltd and
including Cuart Growth Capital Fund I (hereafter "the Syndicate")
at an issue price of 0.7 pence per Ordinary Share (the
"Subscription Shares"). The Subscription is conditional on
admission of the Subscription Shares to trading on AIM
("Admission").
Of the gross proceeds of the Subscription, GBP200,000 will be
retained by the Company and the balance of GBP600,000 will be
returned by the Company to the Syndicate pursuant to the second
part of the Facility, which is an equity sharing agreement (the
"Equity Sharing Agreement"). The Equity Sharing Agreement entitles
the Company to receive back those proceeds subject to the
Settlement Formula on a monthly basis over a period of 18 months.
It is also subject to adjustment upwards or downwards each month
depending on the Company's share price performance during the
previous month, as explained in more detail below. The Equity
Sharing Agreement provides the opportunity for the Company to
benefit from a positive future share performance. However, should
the Company's share price not perform positively, then the Company
will receive less than the amount it will return to the Syndicate
(subject to pricing adjustment) and, if its share price falls
substantially, the Company may have to return some or all the
proceeds of the Subscription to the Syndicate.
In no event 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 Syndicate.
The Facility
Under the Subscription, the Syndicate will subscribe for
114,285,714 Subscription Shares at 0.7 pence per Subscription
Share, for a total gross consideration of GBP800,000. The
Subscription Shares will represent 8.78 per cent of the enlarged
ordinary share capital of the Company. On completion of the
Subscription, the Company shall pay the Syndicate 75 per cent of
the funds received under the Subscription, i.e. GBP600,000, under
the Equity Sharing Agreement (details of which are set out below),
with the Company retaining GBP142,000 which is calculated after
deducting the Company's costs.
It is the Company's intention to use the retained proceeds from
the Subscription and any further receipts under the Equity Sharing
Agreement in the Company's continuing operations, including for
general working capital requirements.
The Equity Sharing Agreement
The Equity Sharing Agreement provides for a monthly payment to
be made by the Syndicate to the Company, being GBP33,333 for the
first 17 months and GBP33,339 in the eighteenth and final month
(the "Monthly Payment"). This payment may be adjusted up or down
depending on whether the average of the lowest ten daily volume
weighted average prices ("VWAP") of the Ordinary Shares during the
relevant month (the "Market Price") is above or below 0.77 pence
per Ordinary Share (the "Benchmark Price"). If the Market Price is
below the Benchmark Price, then the Monthly Payment is reduced
based on the following formula:
Settlement Formula
GBP33,333 - (6,349,206 Ordinary Shares x (Benchmark Price-Market
Price))
If the Market Price is above the Benchmark Price, then the
Monthly Payment is increased based on the following formula:
GBP33,333 + (6,349,206 Ordinary Shares x (Market Price-
Benchmark Price) x 0.75)
Note: The Monthly Payment and number of Ordinary Shares used in
the above calculations will be GBP33,339 and 6,349,212 respectively
in the eighteenth and final month.
The Company intends to announce its monthly receipts under the
Equity Sharing Agreement.
Investment Agreement
The Company has entered into an Investment Agreement
('Investment') with YA II PN, Ltd arranged by Riverfort with the
funds advanced under the Investment Agreement to be deployed as a
source of general working capital.
The total Investment available to the Company is up to US$2m
('Principal Amount') with an initial drawdown of US$400,000; the
maturity date in respect of the initial drawdown of US$400,000 is
the first anniversary of the date of drawdown. Interest is payable
at the rate of 10% per annum. Any further tranches may be drawn
down if agreed with the Company and at YA II's absolute discretion;
any such further tranches must be drawn down prior to the first
anniversary of the date of the Investment Agreement. There is no
guarantee that any drawdown beyond the initial drawdown of
US$400,000 will be agreed.
Warrants
Pursuant to the Investment Agreement the Company will issue
warrants for 20% cover of the relevant amount funded under the
Investment Agreement. In respect of the initial drawdown of
US$400,000 under the Investment Agreement, the Company shall grant
8,934,663 warrants. All warrants granted shall have a strike price
of 140% of the 5 day VWAP of the Ordinary Shares prior to the date
of the relevant grant of warrants.
Admission and Total Voting Rights
An application will be made to admit the Subscription Shares to
trading on AIM. Admission is expected to occur on or around 24
August 2017.
Following Admission, the Company's issued share capital will
consist of 1,301,410,482 Ordinary Shares, with one voting right per
share. Wishbone Gold does not hold any Ordinary Shares in treasury.
Therefore, the total number of Ordinary Shares and voting rights in
the Company will be 1,301,410,482 .This 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 to their interest in, the share capital of
the Company.
For more information on Wishbone Gold please visit the Company's
website www.wishbonegold.com.
Enquiries:
PCG Entertainment PLC
Richard Poulden, Chairman Tel: +44 207 812 0645
Allenby Capital Limited
Nick Naylor/Nick Harriss/James Thomas Tel: +44 20 3328 5656
Beaufort Securities Limited
Elliot Hance Tel: +44 20 7382 8300
Damson Communications
Amelia Hubert Tel: +44 20 7812 0645
Further Information on the Subscription, Equity Sharing
Agreement, Investment Agreement and Warrants
The Subscription
The Company has raised, conditional of Admission, GBP800,000
(before expenses) through the issue of 114,285,714 Ordinary Shares
at a price of 0.7 pence per share.
The Subscription is conditional on Admission of the Subscription
Shares to trading on AIM occurring on or before 8.00 a.m. on 24
August 2017 (or such later time and/or date as the Syndicate and
the Company may agree, being not later than 8.00 a.m. on 31st
August 2017).
The Company has agreed to pay the Syndicate certain commissions
and fees in connection with the Subscription. Under the terms of
the Subscription Agreement, the Company has given certain
warranties and indemnities to the Syndicate in connection with the
Subscription and other matters relating to the Company and its
affairs.
The Subscription Shares will, when issued, represent
approximately 8.78 per cent of the enlarged issued share capital of
the Company following Admission. The Subscription Price is
equivalent to the closing mid-market price of the Ordinary Shares
on 17 August 2017.
The Equity Sharing Agreement
The Company has entered into the Equity Sharing Agreement,
pursuant to which, subject to the conditions therein and provided
that the Company has received the subscription monies payable
pursuant to the Subscription Agreement, the Company will pay an
amount equal to 75 per cent of the gross proceeds of the
Subscription to the Syndicate. The Equity Sharing Agreement will
enable the Company to share in 75 per cent in any share price
appreciation over the Benchmark Price. However, if the Company's
share price remains less than the Benchmark Price then the amount
received by the Company under the Equity Sharing Agreement will be
less than the 75 per cent of the gross proceeds of the Subscription
which are to be returned by the Company to the Syndicate at the
outset.
The Equity Sharing Agreement provides that the Company will
receive 18 approximately equal monthly settlement amounts as
measured against the Benchmark Price. The monthly settlement amount
for the Equity Sharing Agreement is structured to commence on 30
September 2017.
Should the Market Price be below the Benchmark Price, the
Company will receive less than 100 per cent of the monthly
settlement calculated as per the Settlement Formula and the Company
will not be entitled to receive the shortfall at any later date. If
the Market Price exceeds the Benchmark Price the Company will
receive the Monthly Payment plus 75 per cent of the excess of the
Market Price over the Benchmark Price. There is no upper limit
placed on the additional proceeds receivable by the Company as part
of the monthly settlements and the amount available in subsequent
months is not affected.
For example, if on the monthly settlement date, the Market Price
is below the Benchmark Price by 10 per cent, the settlement on the
monthly settlement date will be 90 per cent of the amount due on
that date. If on a monthly settlement date the calculated Market
Price exceeds the Benchmark Price by 10 per cent, the settlement on
that monthly settlement date will be 107.5 per cent of the amount
due from the Syndicate on that date.
Assuming the Market Price equals the Benchmark Price on the date
of each and every monthly amount, the Company would receive
aggregate proceeds of GBP800,000 (before expenses) from the
Facility.
It is possible that in certain circumstances the Company may not
receive the monthly settlement amount referred to above under the
Equity Sharing Agreement and could in fact be liable to make cash
payments to the Syndicate but in no circumstances can the Company's
liability to make payments to the Syndicate on account of the
adjustments referred to above exceed the amount of GBP200,000.
The Company will pay the Syndicate a legal fee, a Due Diligence
fee and the Syndicate's legal costs incurred in the
Subscription.
Under the terms of the Equity Sharing Agreement, the Company has
given certain warranties and indemnities to the Syndicate in
connection with the transactions contemplated therein and relating
to the Company and its affairs.
In no event 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 Syndicate.
Investment Agreement
The Company has entered into an Investment Agreement
('Investment') with YA II PN, Ltd arranged by Riverfort with the
funds advanced under the Investment Agreement to be deployed as a
source of general working capital.
The total Investment available to the Company is up to US$2m
('Principal Amount') with an initial drawdown of US$400,000; the
maturity date in respect of the initial drawdown of US$400,000 is
the first anniversary of the date of drawdown. Interest is payable
at the rate of 10% per annum. Any further tranches may be drawn
down if agreed with the Company and at YA II's absolute discretion;
any such further tranches must be drawn down prior to the first
anniversary of the date of the Investment Agreement. There is no
guarantee that any drawdown beyond the initial drawdown of
US$400,000 will be agreed.
Under the terms of the Investment Agreement:
- the Company has given certain warranties, undertakings and
indemnities;
- in respect of any amount that is not paid on its due date for
payment default interest ("Default Interest") is payable, for any
overdue amount, at a rate of 2 per cent. per week, such weekly
interest rate to be increased, in respect of any overdue amount
that remains unpaid, by an additional 1 per cent per month
following the passage of each calendar month that elapses from the
initial due date of the relevant overdue amount until the amount is
fully repaid ("Default Interest Rate");
-on:
(i) a first Repayment Default (i.e. the Company fails to repay
any amount when due unless such failure to repay is caused by
administrative or technical error and the relevant amount is paid
in full within ten trading days of its due date) Default Interest
shall accrue on the unpaid amount at the Default Interest Rate from
the due date of the relevant amount until such time as the amount
(together with applicable accrued default interest) has been paid
and in the event that the unpaid amount and applicable accrued
default interest (the "Repayment Default Amount") is not paid then
such Repayment Default Amount may be declared to be immediately due
and payable and, upon that declaration, such Repayment Default
Amount shall become within 5 trading days of receipt by the Company
of such notice due and payable without further demand or notice of
any kind;
(ii) a second (or subsequent) Repayment Default, all outstanding
principal amounts owing by the Company and any interest thereon may
be declared to be immediately due and payable, together with any
other sums then owed by the Company and, upon that declaration,
such sums shall become immediately within 5 trading days due and
payable without further demand or notice of any kind; and
- if any amount becomes immediately due and payable pursuant to
items (i) and (ii) above then YA II may elect by notice to the
Company to convert relevant amounts into Ordinary Shares and such
conversion shall be effected at a 20 per cent. discount to the
average of the lowest 5 daily VWAP of the Ordinary Shares from the
15 daily VWAP of the Ordinary Shares during the 15 trading days
immediately preceding the date of the conversion notice.
Warrants
Pursuant to the Investment Agreement the Company will issue
warrants for 20 per cent cover of the relevant amount funded under
the Investment Agreement. In respect of the initial drawdown of
US$400,000 under the Investment Agreement, the Company shall grant
8,934,663 warrants. All warrants granted shall have a strike price
of 140% of the 5 day VWAP of the Ordinary Shares prior to the date
of the relevant grant of warrants. The warrants are
non-transferable and capable of exercise in whole or in part at any
time prior to the third anniversary of the date of grant.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCSFUFLAFWSEFA
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August 18, 2017 10:22 ET (14:22 GMT)
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