TIDMCGH
RNS Number : 9056K
Chaarat Gold Holdings Ltd
27 September 2016
Chaarat Gold Holdings Limited
("Chaarat" or "the Company")
Placing to raise GBP4.1 million
Road Town, Tortola, British Virgin Islands (27 September
2016).
Chaarat (AIM:CGH), the AIM quoted exploration and development
company with assets in the Kyrgyz Republic, is pleased to announce
that it has raised approximately GBP4.1 million through the issue
of 78,840,443 new ordinary shares (the "Ordinary Shares" or
"Shares") of USD 0.01 each in the capital of the Company (the
"Placing Shares") at a price of 5.25p per share (the "Placing
Price") (the "Placing"). The Placing was oversubscribed and,
accordingly, certain investor applications were scaled back to
limit dilution at this time.
Highlights
-- Placing completed to raise GBP4.1 million
-- Dilution to existing shareholders minimised by scaling back applications
-- Proceeds to be used to complete the Bankable Feasibility
Study for the Tulkubash Heap Leach Project (the "Tulkubash
Project")
-- Majority of the Board participated in the Placing including
the current Chairman and non-executives as well as the incoming
Chairman and non-executive director
The Company's announcement on 20(th) September set out its plans
to pursue the development of the Tulkubash Heap Leach Project (the
"Tulkubash Project"). The proceeds of the Placing should enable the
Company to complete a Bankable Feasibility Study ("BFS") on the
Tulkubash Project during the second quarter of 2017 and the local
approval process for the Tulkubash Project, which is expected to be
substantially concluded during the third quarter of 2017.
When in production, the Tulkubash Project is expected to process
approximately 8,000 tonnes of ore per day to produce approximately
60-70,000 ounces of gold per annum. The estimated total capital
requirement to bring the Tulkubash Project into production is
expected to be approximately USD 80 to 100 million.
Director appointments and related matters
Further to the announcement on the 20(th) September the Company
is pleased to announce that the appointment of Martin Andersson as
Non-Executive Chairman and Martin Wiwen-Nilsson as Non-Executive
Director, will become effective on the day following Admission.
Amongst the new shareholders on the register of the Company are
associates of the incoming Chairman. Whilst acting independently,
solely in their own interests and having no direct involvement with
the Company, associates of the incoming Chairman have invested in
this Placing. The incoming Chairman, taking a conservative view,
deemed it appropriate that those parties should be considered as
forming a concert party with Labro and that, subject to the waiver
mentioned below, additional share purchases by them will have to be
approved by the
independent Directors. Further information is set out below.
Subscription for shares by Labro and the Directors
Labro Investments Limited ("Labro"), which currently holds 25.6%
of the Company's issued share capital, has committed to subscribe
for 41,758,250 Placing Shares (the "Subscription"). As announced
previously, Martin Andersson is indirectly beneficially interested
in the majority of the shares in Labro. Following admission of the
Placing Shares to trading on the AIM market of the London Stock
Exchange plc ("Admission"), Labro will hold 111,583,314 Ordinary
Shares representing 31.7% of the Company's share capital as
enlarged by the Placing (the "Enlarged Share Capital") and
21,367,521 warrants to subscribe for Ordinary Shares (the "Labro
Warrants").
Martin Wiwen-Nilsson has committed to subscribe for 7,326,010
Placing Shares, following which he will hold 7,326,010 Ordinary
Shares representing 2.1% of the Company's Enlarged Share
Capital.
Christopher Palmer Tomkinson (who has subscribed for 1,000,000
Placing Shares following which he will hold 7,275,000 Ordinary
Shares representing 2.1% of the Company's Enlarged Share Capital)
will also retire from the Board on the day following Admission. The
Board would like to thank Christopher for his contribution to the
Company over his time as Chairman.
In addition to the subscription of the incoming Directors and
the current Chairman, the following Directors have participated in
the Placing:
Number of
Placing Ordinary
subscription Shares to Percentage
(Placing be held of Enlarged
Shares) on Admission Share Capital
--------------- -------------- -------------- ---------------
Dekel Golan 200,000 14,275,691 4.1%
Linda Naylor* 200,000 1,200,000 0.3%
Richard Rae 200,000 400,000 0.1%
*Includes 114,000 Placing Shares subscribed for by Linda
Naylor's husband, Mr David Tipple.
Concert party arrangements
Our shareholders may recall that there is a provision in the
Company's Articles of Association (the "Articles") which states
that the Board has the right to require any holder of more than 20%
of the Company's Shares to make a mandatory offer to all the
Company's shareholders to acquire their Shares if they acquire an
additional interest in any Shares. The Board has previously
exercised its discretion to waive the requirement for a mandatory
offer when Labro (and the previous holder Fasanara Capital)
acquired Shares in excess of a 20% holding.
Whilst acting independently, solely in their own interests and
having no direct involvement with the Company, certain of the new
shareholders subscribing in the Placing who are associates of the
incoming Chairman have been considered to form a concert party with
Labro. This will mean that, subject to the waiver detailed below,
any purchase of shares by any member of the concert party must be
notified to the Board so that the Independent Directors can decide
whether to exercise their discretion to waive the requirement to
make a mandatory offer to all shareholders. The Board believes this
is best practice for corporate governance purposes so that there is
no perception that Shares are being accumulated with the objective
of acquiring the Company at a potentially depressed valuation.
Accordingly, Martin Wiwen-Nilsson, Dominik Dolenec, Abingdon
Trust, Willem De Geer and Sarastro Group Limited (or in each case
his or its nominee), who are together subscribing for 25,274,720
Placing Shares, are being treated as concert parties of Labro
(together with Labro the "Concert Party") (the "Concert Party
Subscription") for the purposes of the Articles. Following
completion of the Placing, the Concert Party will hold 136,858,034
Ordinary Shares representing 38.9% of the Enlarged Share
Capital.
As the Placing was oversubscribed and Placing applications by
members of the Concert Party were scaled back, it has been agreed
as part of the Placing that members of the Concert Party may
acquire up to a further 21,611,714 Ordinary Shares (excluding
Ordinary Shares issued on exercise of Labro Warrants) within a
period of six months following Admission without triggering a
requirement to make a mandatory offer under the Articles (see
"Further information relating to the Placing" below). If all such
Ordinary Shares were acquired within such period by way of the
acquisition of existing Ordinary Shares, the Concert Party would
hold 158,469,748 Ordinary Shares representing 45.0%% of the
Enlarged Share Capital and, if all Labro Warrants were exercised
(but no other warrants or options to subscribe for Ordinary Shares
were exercised and no other Ordinary Shares were issued), the
Concert Party would hold 179,837,269 Ordinary Shares representing
48.2% of the resulting enlarged share capital.
As a result of the shareholding of Labro prior to the Placing,
the Concert Party Subscription will, for the purposes of AIM Rule
13, constitute a "Related Party Transaction". The Company's
directors consider, having consulted with its Nominated Adviser,
that the terms of the Concert Party Subscription are fair and
reasonable insofar as the Company's shareholders are concerned.
Relationship Agreement
The Company also announces that it has entered into a
relationship agreement (the "Relationship Agreement") with Labro,
which will come into effect on Admission. The Relationship
Agreement provides that, for so long as Labro beneficially owns or
is interested in 20% or more of the issued share capital of the
Company carrying voting rights, Labro shall have the right to
nominate one director to the Board, and to remove any such
nominated director and appoint a replacement director in his/her
place. Labro has also agreed to certain other relationship
obligations under the Relationship Agreement.
The Relationship Agreement will terminate on the date that Labro
ceases to beneficially own or be interested in at least 20% of the
issued share capital of the Company carrying voting rights or if
the Ordinary Shares were to cease to be admitted to trading on AIM.
Further information regarding the Relationship Agreement is set out
in the appendix of this announcement.
Amendment to warrant instruments
In conjunction with the Company's GBP163,500 placing in December
2014, three year warrants (the "Warrants") were issued to placees
to subscribe for one Ordinary Share per placing share at the
placing price of 15p per share (the "Warrant Exercise Price").
The terms of the Warrants allowed for an exercise price
adjustment should the Company raise funds at a price which
represented a discount of more than 10% to the prevailing share
price. The Company will shortly following Admission make an offer
to all holders of the Warrants (the "Warrant Holders") to amend the
terms of such Warrants in order to: (i) extend the expiry date of
the Warrants from 23 December 2017 to 23 December 2019, in exchange
for such Warrant Holders waiving the right, on account of the
Placing, to adjust the Warrant Exercise Price; and (ii) provide for
Warrant Holders to be able to exercise their Warrants on a net
issuance basis. If such offer is not accepted within a period of 14
days from Admission, the Warrant Exercise Price will be adjusted to
14.43p per share.
In conjunction with the Company's US$5m placing in December
2014, Labro was issued 21,367,521 Labro Warrants. Labro and the
Company have entered into a deed of amendment dated 26 September
2016, in order to amend the terms of the Labro Warrants by: (i)
extending the expiry date of the Labro Warrants from 17 December
2017 to 17 December 2019 in exchange for Labro agreeing to waive
its right, pursuant to the term of the Labro Warrants, and on
account of to the Placing, to adjust the exercise price of the
Labro Warrants (which adjustment would have resulted in a new Labro
Warrant exercise price of 14.43p); and (ii) providing for Labro to
be able to exercise the Labro Warrants on a net issuance basis (the
"Labro Warrant Amendment"). Given the current shareholding of
Labro, the Labro Warrant Amendment will, for the purposes of AIM
Rule 13, constitute a "Related Party Transaction". The Company's
directors consider, having consulted with its Nominated Adviser,
that the Labro Warrant Amendment is fair and reasonable insofar as
its shareholders are concerned.
China Nonferrous Metals International Mining Co Ltd
("CNMIM")
Chaarat is required to give notice to CNMIM if it intends to
issue any Ordinary Shares for cash or non- cash consideration.
CNMIM may within 15 business days of receipt of such notice being
issued in connection with the Placing give written notice to
require Chaarat to issue such number of Ordinary Shares to CNMIM on
the same terms as the Placing Shares, as is necessary to maintain
the percentage shareholding of CNMIM in the Company prior to
completion of the Placing. The required notice in respect of the
issue of the Placing Shares will be sent to CNMIM and a further
announcement made, if appropriate. Prior to issue and allotment of
the Placing Shares, CNMIM held 22,469,289 Ordinary Shares
representing 8.23% of the issued share capital of Chaarat.
The information contained within this announcement is deemed to
constitute inside information for the purposes of Article 7 of the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
Dekel Golan, CEO of Chaarat, comments: "The Company set out to
raise a modest amount of money in order to minimise dilution to
shareholders. We were pleased with the interest and support of our
existing and new shareholders and the directors. On account of the
interest shown, the Placing was oversubscribed and orders were
scaled back. We appreciate the trust and support placed in us and
will continue to do our best to justify it."
Enquiries:
Chaarat Gold Holdings
Limited + 44 23 800 11747
c/o Central Asia Services info@chaarat.com
Limited
Dekel Golan CEO
Linda Naylor FD
Numis Securities Limited +44 (0) 20 7260 1000
John Prior, Paul Gillam
(NOMAD)
James Black (Broker)
Further information relating to the Placing
The completion of the Placing is conditional, inter alia, upon
Admission. The Company has applied for Admission and it is expected
that Admission will take place on or around 30 September 2016. The
Placing Price represents a discount of 15.3% to the closing price
of 6.2p per share on 26 September 2016.
The Placing Shares have been issued and allotted as fully paid
and will rank pari passu with the existing Ordinary Shares.
Following Admission, the Company's existing issued share capital
will increase from 272,935,389 Ordinary Shares to 351,775,832
Ordinary Shares. As such the total number of voting rights which
will be attached to the Enlarged Share Capital, on the basis of one
vote per Ordinary Share, will be 351,775,832 (the "Total Voting
Rights").
The Total Voting Rights figure may be used by shareholders as
the denominator for any calculation by which they will determine
whether or not they are required to notify their interests in, or a
change to their interest in, the issued share capital of the
Company.
Chaarat is a company incorporated in the British Virgin Islands
and is therefore not subject to the UK City Code on Takeovers and
Mergers. The Articles contain a regulation which provides that
where any person (i) acquires interests in shares which (taken
together with interests in shares held or acquired by persons
acting in concert with him) carry 20% or more of the voting rights
of the Company; or (ii) holds (together with persons acting in
concert with him) interests in shares representing not less than
20% but not more than 50% of the voting rights and such person (or
any person acting in concert with him) acquires an interest in
additional shares which increases his percentage of voting rights,
the Board shall be entitled, but not obliged, to require that
person to extend a mandatory offer to all of the Company's
shareholders to acquire their Ordinary Shares.
The Board has exercised its discretion under the Articles so as
not to require a mandatory offer to be made in connection with the
Placing by any member of the Concert Party in respect of either the
issue and allotment of the Placing Shares, or as a result of any
redemption or purchase by the Company of its own voting shares at
any time in the future, or the acquisition of up to further
21,611,714 Ordinary Shares (excluding Ordinary Shares issued on
exercise of Labro Warrants) within the period of six months
following Admission (or, in due course if relevant and as
previously announced, the issuance of Ordinary Shares upon exercise
of the Labro Warrants), but not in respect of any other purchase of
Ordinary Shares or any interest therein by any member of the
Concert Party or any other person acting in concert with them.
The Company was notified on 25 September 2016 that Labro
purchased in aggregate 1,050,000 Ordinary Shares during May/June
2015 following receipt of a waiver from the Board on 12 May 2015,
lasting for one month, from the requirement to make a mandatory
offer for the Ordinary Shares held by the Company's other
Shareholders.
Further information relating to the Director appointments
Martin Axel Christer Andersson (aged 49) has confirmed that
other than his current and previous directorships and the
information disclosed below there are no matters to be disclosed
under Rule 17 and paragraph (g) of Schedule 2 of the AIM Rules.
Current directorships:
Brunswick Rail Limited
Cabo Delgado Investments Limited
Central Atlantic Investment Holding LLC
Brunswick Real Estate S.A.R.L
Directorships resigned in last five years:
Siberian Generating Company LLC
Oao Suek
Technosila Holdings
Martin Wiwen-Nilsson (aged 45) has confirmed that other than his
current and previous directorships and the information disclosed
below there are no matters to be disclosed under Rule 17 and
paragraph (g) of Schedule 2 of the AIM Rules.
Current directorships:
Brunswick Real Estate S.A.R.L
Further information relating to the Relationship Agreement
The principal terms of the Relationship Agreement are as
follows:
-- Labro has agreed that it shall (and, to the extent that it is
able, shall procure that its associates/any nominee shall) permit
the Company to carry on its business independently of Labro and its
associates, including so that: (a) a majority of the revenue
generated by the Company's business is not attributable to business
conducted directly or indirectly with Labro or its associates; (b)
Labro and its associates are not able to influence the operations
of the Company outside of its legal governance structure; and (c)
save with the requisite approval of the Company's shareholders in
accordance with the AIM Rules and/or applicable company law, Labro
and its associates do not hold or acquire a material shareholding
in one or more significant subsidiaries of the Company. For these
purposes "Associates" shall have the meaning given to that term in
the Listing Rules.
-- Labro has undertaken to the Company that it shall not (and,
to the extent that it is able, shall procure that none of its
associates/nominees shall) exercise any rights which any of them
have from time to time as shareholders of the Company to: (a) enter
into any transactions and/or relationships between any member of
the Company's group and Labro or its associates, other than at
arm's length and on normal commercial terms and in accordance with
the related party transaction rules set out in the AIM Rules and/or
applicable provisions of applicable company law; and (b) propose
any resolution or take any action which is intended to circumvent
the proper application of the AIM Rules.
-- For so long as the Relationship Agreement remains in force,
Labro shall not (and, to the extent that it is able, shall procure
that none of its associates/nominees shall) take any action (or
omit to take any action) that may: (a) prejudice the suitability of
the Ordinary Shares for admission to trading on AIM; or (b) have
the effect of preventing the Company from complying with its
obligations under the AIM Rules or applicable company law.
-- For so long as Labro (together with its associates)
beneficially owns or is interested in 20% or more of the issued
share capital of the Company carrying voting rights, Labro shall
have the right to nominate one director to the board of directors
of the Company, and to remove any such nominated director and
appoint a replacement director in his/her place.
-- The Relationship Agreement will automatically terminate and
cease to have effect on the earlier of: (a) Labro and any of its
associates in aggregate ceasing to beneficially own or be
interested in at least 20% of the issued share capital of the
Company carrying voting rights; or (b) the Ordinary Shares ceasing
to be admitted to trading on AIM.
-- The Company and Labro have agreed that nothing in the
Relationship Agreement shall prevent: (a) Labro or any of its
associates from exercising any of their voting rights as they, in
their discretion, see fit except where to do so would result in a
breach of the Relationship Agreement; or (b) Labro or any of its
associates from acquiring or disposing of securities of the Company
(save to the extent otherwise required by law or regulation and
subject always to the Company's Articles, including (without
limitation) regulation 19 thereof); or (c) the payment of any fees
and/or expenses to any nominee director in respect of his or her
services as a director in accordance with his/her appointment
agreement as such.
NOTES TO EDITORS:
About Chaarat
Chaarat Gold is an exploration and development company operating
in the Kyrgyz Republic with a large, high grade resource - the
Chaarat Gold Project. The Company's key objective is to become a
low cost gold producer generating significant production from the
development of the Chaarat Gold Project. Chaarat is engaged in an
active community engagement programme to optimise the value of the
Chaarat investment proposition.
Chaarat aims to create value for its shareholders, employees and
communities from its high quality gold and mineral deposits in the
Kyrgyz Republic by building relationships based on trust and
operating to the best environmental, social and employment
standards.
Further information is available at www.chaarat.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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