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IN THEM, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR
INTO AUSTRALIA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, HONG
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WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.
FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS
NOT AN OFFER OF SECURITIES IN ANY JURISDICTION.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR RELEASE,
PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO THE
UNITED STATES.
THE SECURITIES DESCRIBED HEREIN HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED OR SOLD IN
THE UNITED STATES OR TO A U.S.
PERSON ABSENT REGISTRATION OR AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
TORONTO, Oct. 31, 2017 /CNW/ - Avesoro Resources Inc.
(AIM:ASO / TSX:ASO) ("Avesoro" or the "Company"), is
pleased to announce that it has entered into a conditional
agreement to acquire the Youga Gold Mine and Balogo Gold Mine (the
"Assets") in Burkina Faso
through the acquisition of the entire issued share capital of MNG
Gold Burkina SARL, Cayman Burkina Mines Ltd., MNG Gold Exploration
Ltd., AAA Exploration Burkina Ltd. and Jersey Netiana Mining Ltd.
and their subsidiaries (the "Acquired Entities" which
collectively hold the Assets) from Avesoro Jersey Limited
("Avesoro Jersey"), a related party being the majority
(73.5%) shareholder of the Company, for a total consideration of
US$69.5 million (the
"Acquisition"). The Company has today conditionally raised
approximately £15.2 million (approximately US$20.0 million) through a placing of new Common
Shares in the Company ("Placing Shares") to new and existing
sophisticated and accredited investors at a placing price of
1.9 pence per Placing Share (the
"Placing Price") (the "Placing"). Of the proceeds
from the Placing, US$18.5 million
will be used to fund the cash component of the Acquisition
consideration and the remainder will be used for general working
capital purposes. Up to a further US$2.5
million (gross) may be raised for working capital purposes
by way of a Broker Option (the "Broker Option"), as
determined by the Brokers, which will remain open for exercise by
the Brokers until 5.00 p.m. London
Time on 31 October 2017.
Highlights of the Acquisition
Consideration
- US$69.5 million acquisition
consideration to be funded through:
-
- US$51.0 million of Common Shares
issued to Avesoro Jersey at the Placing Price being 2,033,492,822
new Common Shares ("Consideration Shares"); and
- US$18.5 million of cash raised
via the Placing.
Strategic
- Transformational acquisition for the Company which will add two
producing mines to the Company's portfolio;
- The transaction will simplify the management structure by
bringing two mines into the Company from the wider Avesoro Jersey
group. Following the Acquisition, Avesoro Jersey's shareholding in
the Company will remain at approximately 73 per cent.;
- Positive diversification of project and country risk;
- Significant exploration upside added to the Company's
portfolio; and
- Continuation of the Company's long-term plan to become a
premier mid-tier African gold producer.
Operational
- Increases forecast proforma 2017 gold production to
180-190koz;
- Proforma 2017 year to date cash costs of US$660/oz;
- Increases forecast combined gold production for 2018 by
approximately 60% to 230koz;
- Assets being acquired at attractive valuation of 0.57x
NAV1;
- Assets already well understood by management who have managed
them for the last 18 months under an owner operator mining model;
and
- Addition of 0.5Moz of Proven & Probable Mineral Reserves
and 0.7Moz Inferred Mineral Resources, representing an increase of
72 per cent. and 50 per cent. respectively to the Company's Mineral
Resource and Reserve portfolio.
The Company has conditionally raised approximately £15.2 million
(approximately US$20.0 million) from
institutional investors through a placing of 797,449,000 Placing
Shares at a price of 1.9 pence per
Placing Share, representing approximately 15.0 per cent. of the
Company's existing issued share capital. The Placing Price
represents a discount of approximately 1.3 per cent. to the closing
price of the Company's shares on 30 October
2017, being the latest practicable date before publication
of this announcement. Under the terms of the Broker Option, the
Company may also issue up to a further 99,681,021 new Common Shares
at the Placing Price to sophisticated and accredited investors if
exercised by the Agents.
Serhan Umurhan, Chief Executive Officer of Avesoro,
commented:
"I am delighted to announce that we have entered into an
agreement with Avesoro Jersey Ltd to acquire the Youga Gold Mine
and Balogo Gold Mine in Burkina
Faso. The Assets will provide Avesoro with geographic
diversity within West Africa and
are highly complementary to our existing New Liberty mine,
significantly increasing Avesoro's gold production, in addition to
adding high quality exploration upside that will provide for
further future organic growth. In conjunction with the turnaround
at New Liberty, this acquisition marks a significant next step in
achieving our long-term plan to become a premier mid-tier African
gold producer."
The Acquisition is subject to stock exchange and minority
shareholder approvals, as described further in this announcement.
Closing is anticipated on or around 18
December 2017, as soon as practicable after shareholder
approval is obtained when the Placing will also complete.
In addition, the Company intends to propose, subject to
shareholder approval, a share consolidation (or reverse stock
split) of the issued and outstanding Common Shares (the "Share
Consolidation") at a share consolidation ratio of one (1)
post-consolidation Common Share for every hundred (100)
pre-consolidation Common Shares. The actual timing for
implementation, if any, of the Share Consolidation would be
determined by the Board of Directors based upon its evaluation as
to when such action would be most advantageous to the Company and
its shareholders, and would be expected to occur in early 2018.
The Company will in due course send a circular to shareholders
convening a Special Meeting to seek minority shareholder approval
for the Acquisition and shareholder approval of the Share
Consolidation to be completed in 2018. In conjunction with the
Acquisition, an independent committee of directors was created in
July 2017 consisting of Mr
David Netherway, Mr Jean-Guy Martin and Mr Loudon Owen (the "Independent Committee")
to supervise the negotiation of the Acquisition and the preparation
of an independent formal valuation required by Canadian securities
laws.
The Independent Committee considers, having consulted with the
Company's Nominated Advisor, that the terms of the Acquisition are
fair and reasonable insofar as its shareholders are
concerned.
The Independent Committee has unanimously recommended the
approval of the Acquisition to the board of directors of the
Company (the "Board"). Accordingly, and based on the
recommendation of the Independent Committee, the Board intends to
recommend that the Company's minority shareholders vote in favour
of the resolution in respect of the Acquisition to be proposed at
the Special Meeting.
This summary should be read in conjunction with the full text
of the following Announcement and its Appendices. Capitalised terms
used in this Announcement have the meanings given to them in
Appendix B. Appendix A to this Announcement (which forms part of
this Announcement) sets out the terms and conditions of the
Placing. Persons who choose to participate in the Placing, by
making an oral or written offer to acquire Placing Shares, will be
deemed to have read and understood this Announcement in its
entirety (including Appendix A) and to be making such offer on the
terms and subject to the conditions herein, and to be providing the
representations, warranties, agreements, acknowledgements and
undertakings contained in Appendix A.
1Purchase
price of US$69.5m divided by discounted equity NPV (as per the
latest NI 43-101) of the Youga Gold Mine and the Balogo Gold Mine
adjusted for US$13.1m depletion of the ore bodies arising from
production since the Mineral Reserve and Mineral Resource reporting
date of 28 February 2017.
|
About Avesoro Resources Inc.
Avesoro Resources Inc. is a west Africa focussed gold mining, development and
exploration company listed on the Toronto Stock Exchange
("TSX") and the AIM market operated by the London Stock
Exchange ("AIM").
The Company's assets include the New Liberty Gold Mine in
Liberia (the "New Liberty Gold Mine" or "New Liberty")
which has an estimated Proven and Probable Mineral Reserve of 7.4
Mt with 717,000 ounces of gold grading 3.03 g/t and an estimated
Measured and Indicated Mineral Resource of 9.6 Mt with 985,000
ounces of gold grading 3.2 g/t and an estimated Inferred Mineral
Resource of 6.4 Mt with 620,000 ounces of gold grading 3.0 g/t.
The New Liberty Gold Mine is located within the Southern Block
of the 100% owned Bea Mountain mining licence. This licence covers
478 km² and has a 25 year, renewable, mineral development
agreement. The Bea Mountain mining license also hosts additional
gold projects of Ndablama, Gondoja, Weaju and Leopard Rock which
host Indicated and Inferred Mineral Resources. The Company also
owns the adjacent Yambesei, Archaen West, Mabong and Mafa West
licences, in addition to a gold exploration permit in Cameroon.
Qualified Persons
New Liberty
The information in this announcement relating to the Mineral
Resource and Mineral Reserves Estimates for the New Liberty Gold
mine has been prepared under the supervision of Dr Mike Armitage C Geol., C Eng., who is a Member
of the Institute of Materials, Minerals and Mining and a Fellow of
the Geological Society. Dr Armitage is a full-time employee of SRK
Consulting (UK) Ltd and has sufficient experience which is relevant
to the style of mineralisation and type of deposit under
consideration and to the activity which he has undertaken to
qualify as a "Qualified Person" as defined in National Instrument
43-101 "Standards of Disclosure for Mineral Projects" of the
Canadian Securities Administrators.
Youga and Balogo
The information in this announcement relating to the Mineral
Resource Estimates for the Youga Gold mine, Ouaré deposit and
Balogo Gold Mine has been prepared by Malcolm Titley, who is a Member of the
Australian Institute of Geologists. Mr Titley is a full-time
employee of CSA Global (UK) Ltd and has sufficient experience which
is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he has undertaken to
qualify as a "Qualified Person" as defined in National Instrument
43-101 "Standards of Disclosure for Mineral Projects" of the
Canadian Securities Administrators. Mr Titley has reviewed and
approved this announcement and consents to the inclusion in the
announcement of the matters based on his information in the form
and context in which this appears.
The information in this announcement relating to the Mineral
Reserve Estimates for the Youga Gold Mine, Ouaré deposit and Balogo
Gold Mine has been prepared by Dr Matthew
Randall, who is a registered Fellow of the Institute of
Materials, Minerals and Mining. Dr Randall is an associate
consultant to CSA Global (UK) Ltd and has sufficient experience
which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he has
undertaken to qualify as a "Qualified Person" as defined in
National Instrument 43-101 "Standards of Disclosure for Mineral
Projects" of the Canadian Securities Administrators. Dr Randall has
reviewed and approved this announcement and consents to the
inclusion in the announcement of the matters based on his
information in the form and context in which this appears.
An independent NI 43-101 technical report with respect to each
of the Youga Gold Mine and Balogo Gold mine will be filed on SEDAR
concurrently with the posting of the circular for the Special
Meeting.
Company
The Company's Qualified Person is Mark
J. Pryor, who holds a BSc (Hons) in Geology & Mineralogy
from Aberdeen University, United Kingdom and is a Fellow of the
Geological Society of London, a
Fellow of the Society of Economic Geologists and a registered
Professional Natural Scientist (Pr.Sci.Nat) of the South African
Council for Natural Scientific Professions. Mark Pryor is an independent technical
consultant with over 25 years of global experience in exploration,
mining and mine development and is a "Qualified Person" as defined
in National Instrument 43-101 "Standards of Disclosure for Mineral
Projects" of the Canadian Securities Administrators and has
reviewed and approved this announcement.
Indicative Timetable of Key Events
Record
Date
|
10 November
2017
|
|
|
Posting of
shareholder circular
|
23 November
2017
|
|
|
Latest time and date
for receipt of form of proxy
|
11 December 2017 (UK)
and
12 December 2017
(Canada)
|
|
|
Special
Meeting
|
11.00 a.m. 14
December 2017
|
|
|
CREST accounts
credited in respect of the Placing Shares
|
18 December
2017
|
|
|
Expected completion
of the Acquisition, issue of the
Consideration Shares
and Placing Shares and
commencement of
dealings in the Enlarged Share Capital
on AIM and
TSX
|
18 December
2017
|
All references to times in this timetable are to London time.
Exchange Rate
Where applicable, the exchange rate of US$1.32: GBP1 has
been used being the exchange rate as at 30
October 2017.
Forward Looking Statements
Certain information contained in this announcement
constitutes forward looking information or forward looking
statements with the meaning of applicable securities laws. This
information or statements may relate to future events, facts, or
circumstances or the Company's future financial or operating
performance or other future events or circumstances. All
information other than historical fact is forward looking
information and involves known and unknown risks, uncertainties and
other factors which may cause the actual results or performance to
be materially different from any future results, performance,
events or circumstances expressed or implied by such
forward-looking statements or information. Such statements can be
identified by the use of words such as "anticipate", "plan",
"continue", "estimate", "expect", "may", "will", "would",
"project", "should", "believe", "target", "predict" and
"potential". No assurance can be given that this information will
prove to be correct and such forward looking information included
in this announcement should not be unduly relied upon. Forward
looking information and statements speaks only as of the date of
this announcement.
Forward looking statements or information in this
announcement include, among other things, statements regarding the
completion of the Acquisition and the Placing; the receipt of
shareholder and regulatory approvals; forecast proforma 2017 gold
production of 180-190koz; increase of forecast combined gold
production for 2018 by approximately 60% to 230koz; the combined
Youga & Balogo average Life of Mine production of 54koz per
annum at average Cash Cost and All-in Sustaining Cost of
US$870/oz and US$962/oz respectively; proforma year to date
cash costs of US$660/oz; and that
significant exploration upside will be added to Avesoro
portfolio.
In making the forward looking information or statements
contained in this announcement, assumptions have been made
regarding, among other things: general business, economic and
mining industry conditions; interest rates and foreign exchange
rates; the continuing accuracy of Mineral Resource and Reserve
estimates; geological and metallurgical conditions (including with
respect to the size, grade and recoverability of Mineral Resources
and Reserves) and cost estimates on which the Mineral Resource and
Reserve estimates are based; the supply and demand for commodities
and precious and base metals and the level and volatility of the
prices of gold; market competition; the ability of the Company to
raise sufficient funds from capital markets and/or debt to meet its
future obligations and planned activities and that unforeseen
events do not impact the ability of the Company to use existing
funds to fund future plans and projects as currently contemplated;
the stability and predictability of the political environments and
legal and regulatory frameworks including with respect to, among
other things, the ability of the Company to obtain, maintain, renew
and/or extend required permits, licences, authorizations and/or
approvals from the appropriate regulatory authorities; that
contractual counterparties perform as agreed; and the ability of
the Company to continue to obtain qualified staff and equipment in
a timely and cost-efficient manner to meet its demand.
Actual results could differ materially from those anticipated
in the forward looking information or statements contained in this
announcement as a result of risks and uncertainties (both foreseen
and unforeseen), and should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indicators of whether or not such results will be achieved. These
risks and uncertainties include the risks normally incidental to
exploration and development of mineral projects and the conduct of
mining operations (including exploration failure, cost overruns or
increases, and operational difficulties resulting from plant or
equipment failure, among others); the inability of the Company to
obtain required financing when needed and/or on acceptable terms or
at all; risks related to operating in West Africa, including potentially more
limited infrastructure and/or less developed legal and regulatory
regimes; health risks associated with the mining workforce in
West Africa; risks related to the
Company's title to its mineral properties; the risk of adverse
changes in commodity prices; the risk that the Company's
exploration for and development of mineral deposits may not be
successful; the inability of the Company to obtain, maintain, renew
and/or extend required licences, permits, authorizations and/or
approvals from the appropriate regulatory authorities and other
risks relating to the legal and regulatory frameworks in
jurisdictions where the Company operates, including adverse or
arbitrary changes in applicable laws or regulations or in their
enforcement; competitive conditions in the mineral exploration and
mining industry; risks related to obtaining insurance or adequate
levels of insurance for the Company's operations; that Mineral
Resource and Reserve estimates are only estimates and actual metal
produced may be less than estimated in a Mineral Resource or
Reserve estimate; the risk that the Company will be unable to
delineate additional Mineral Resources; risks related to
environmental regulations and cost of compliance, as well as costs
associated with possible breaches of such regulations;
uncertainties in the interpretation of results from drilling; risks
related to the tax residency of the Company; the possibility that
future exploration, development or mining results will not be
consistent with expectations; the risk of delays in construction
resulting from, among others, the failure to obtain materials in a
timely manner or on a delayed schedule; inflation pressures which
may increase the cost of production or of consumables beyond what
is estimated in studies and forecasts; changes in exchange and
interest rates; risks related to the activities of artisanal
miners, whose activities could delay or hinder exploration or
mining operations; the risk that third parties to contracts may not
perform as contracted or may breach their agreements; the risk that
plant, equipment or labour may not be available at a reasonable
cost or at all, or cease to be available, or in the case of labour,
may undertake strike or other labour actions; the inability to
attract and retain key management and personnel; and the risk of
political uncertainty, terrorism, civil strife, or war in the
jurisdictions in which the Company operates, or in neighbouring
jurisdictions which could impact on the Company's exploration,
development and operating activities.
This announcement also contains Mineral Resource and Mineral
Reserve estimates. Information relating to Mineral Resource and
Mineral Reserve contained in this announcement is considered
forward looking information in nature, as such estimates are
estimates only, and that involve the implied assessment of the
amount of minerals that may be economically extracted in a given
area based on certain judgments and assumptions made by qualified
persons, including the future economic viability of the deposit
based on, among other things, future estimates of commodity prices.
Such estimates are expressions of judgment and opinion based on the
knowledge, mining experience, analysis of drilling results and
industry practices of the qualified persons making the estimate.
Valid estimates made at a given time may significantly change when
new information becomes available, and may have to change as a
result of numerous factors, including changes in the prevailing
price of gold. By their nature, Mineral Resource and Mineral
Reserve estimates are imprecise and depend, to a certain extent,
upon statistical inferences which may ultimately prove unreliable.
If such Mineral Resource and Mineral Reserve estimates are
inaccurate or are reduced in the future (including through changes
in grade or tonnage), this could have a material adverse impact on
the Company and its operating and financial performance. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability. Due to the uncertainty that may be attached to
inferred mineral resources, it cannot be assumed that all or any
part of an inferred mineral resource will be upgraded to an
indicated or measured mineral resource as a result of continued
exploration.
Although the forward-looking statements contained in this
announcement are based upon what management believes are reasonable
assumptions, the Company cannot provide assurance that actual
results or performance will be consistent with these
forward-looking statements. The forward looking information and
statements included in this announcement are expressly qualified by
this cautionary statement and are made only as of the date of this
announcement. The Company does not undertake any obligation to
publicly update or revise any forward looking information except as
required by applicable securities laws.
Proposed Acquisition of the Youga Gold Mine
and Balogo Gold Mine from Avesoro Jersey Limited
and
Placing of New Common Shares to raise
approximately £15.2 million (approximately US$20.0 million) and Broker Option
1. Introduction
The Company announces that it has entered into an
agreement to acquire the Acquired Entities which collectively hold
the Youga Gold Mine and the Balogo Gold Mine in Burkina Faso from Avesoro Jersey Limited, the
majority shareholder of Avesoro Resources Inc. Avesoro Jersey is a
private gold mining and development group which is a subsidiary of
Avesoro Holdings. Under the terms of the Acquisition, Avesoro
Jersey will receive approximately £52.7 million (approximately
US$69.5 million) as consideration of
which approximately £38.6 million (approximately US$51.0 million) will be satisfied by the
issuance of Consideration Shares to Avesoro Jersey at the Placing
Price with the remaining approximately £14.0 million (approximately
US$18.5 million) paid in cash from
the proceeds of the Placing as described below. Approximately
US$1.5 million of the funds raised
pursuant to the Placing will be used for working capital purposes
and transaction expenses. The number of Consideration Shares to be
issued to Avesoro Jersey will be 2,033,492,822, issued at the
Placing Price of 1.9 pence per
share.
In conjunction with the Acquisition, the Company
announces a conditional placing with institutional sophisticated
and accredited investors of 797,449,000 Placing Shares at a Placing
Price of 1.9 pence per Placing Share.
The Placing Shares represent approximately 15.0% of the Company's
existing issued share capital. Under the terms of the Broker
Option, the Company may also issue up to a further 99,681,021 new
Common Shares at the Placing Price on a private placement basis to
sophisticated and accredited investors if exercised by the
Agents.
Following the Acquisition and Placing, Avesoro
Jersey's shareholding in the Company will remain at approximately
73 per cent. In the event the Broker Option is exercised in full by
the Agents, Avesoro Jersey's shareholding in the Company will
reduce to approximately 72 per cent.
The Acquisition is subject to shareholder
approval, as described further in this announcement. Closing is
anticipated on or around 18 December
2017.
2. Reasons for the Acquisition
Background
The Board has previously announced its intention to expand the
Company's business through value accretive acquisitions of cash
generative assets with exploration potential to create a premier
mid-tier African gold producer.
The Board believe that the Acquisition is in line with this
strategy and represents a compelling opportunity to double its
production capacity with mature assets from within the wider
Avesoro Group structure.
The Board believes that the Assets are attractive for the
following reasons:
Youga and Ouaré
- Proven, mature asset which is forecast to produce approximately
60koz gold in 2017;
- Capable and established standalone management team;
- NI 43-101 compliant Proven and Probable Mineral Reserve of 9
million tonnes containing 434.4koz of gold grading 1.49g/t;
- NI 43-101 compliant Indicated Mineral Resource of 15.6 million
tonnes containing 703koz of gold grading 1.40g/t and an Inferred
Mineral Resource of 12.9 million tonnes containing 640koz grading
1.57g/t;
- Benefits from low-cost grid power delivered from Ghana;
- Additional satellite pits identified for further resources
exploration; and
- Currently processes trucked ore from the Balogo deposit.
Avesoro Jersey purchased the Youga Gold Mine and Ouaré permit
for US$25.3 million in February 2016 from Endeavour Mining and as at
30 June 2017 had invested an
additional US$25 million principally
in new mining equipment and drilling campaigns.
Balogo
- Logistically linked to the Youga processing plant via a 154km
road rehabilitated by Avesoro Jersey in 2016;
- NI 43-101 compliant Probable Mineral Reserve of 0.28 million
tonnes containing 78.37koz of gold grading 8.81g/t;
- NI 43-101 compliant Indicated Mineral Resource of 0.45 million
tonnes containing 98.6koz of gold grading 6.75g/t and an Inferred
Mineral Resource of 0.1 million tonnes containing 15koz grading
4.0g/t;
- Current operations are free dig and high grade. Average year to
date mined grade of 7.2g/t gold;
- Proven mature asset forecast to produce 50.6koz gold in 2017;
and
- Orebody well defined with future underground potential (current
Life of Mine ends in 2018 based on current Mineral Reserve).
Avesoro Jersey purchased the Balogo permit for approximately
US$8 million in April 2015 from Golden Rim Resources Ltd and as
at 30 June had invested an additional US$13
million in drilling programmes to delineate Mineral Reserves
and Resources, feasibility studies and heavy mining equipment.
Strategic benefits for the Group
The Board believes that the Acquisition provides, inter
alia, the following benefits:
- Diversification of group risk: The acquisition of the
Assets in Burkina Faso provides
diversification of project and geographic risk to the Company's
shareholders.
- Growth opportunities: The Assets being acquired provide
significant potential for exploration and further growth to
resources and it is the Company's intention to seek opportunities
to extend the Assets current scheduled mine life outside of the
current mine plan.
- More than doubling forecast proforma gold production for
2017 and significant lowering of the group's average cash cost:
The Assets are forecast to add a combined c.110koz of gold to the
Company's proforma production profile in 2017.
- Increasing forecast gold production for 2018 by c. 60%:
The Assets are forecast to add a combined c.86koz of gold to the
Company's production profile in 2018.
- Positioning of the Company for further growth: The
Acquisition is the next step in positioning the Company for further
growth through acquisitions, and the Board believes this increases
its attractiveness to equity investors. In combination with
deleveraging of the balance sheet, the Board believes this will
improve the Company's prospects to source further funding for
accretive growth.
3. Background to the Assets
The Youga, Ouaré and Balogo Properties are situated in the
"Centre-Sud" region of Burkina
Faso, West Africa. Youga
and Ouaré are located approximately 180km southeast of Ouagadougou, adjacent to the Ghanaian border.
The licence properties are separated by the Nakambé River. The
Balogo property is located approximately 160km west of the Youga
property and approximately 100km south of Ouagadougou.
The scientific and technical information with respect to the
Youga Gold Mine contained in this announcement is derived from the
current technical report dated 19 June
2017 prepared by CSA Global (UK) Ltd ("CSA Global")
entitled "Mineral Resource and Mineral Reserve Update for the Youga
and Ouaré Projects" (the "Youga and Ouaré Technical
Report"). The scientific and technical information with respect
to the Balogo Gold Mine contained in this announcement is derived
from the current technical report dated 16
June 2017 prepared by CSA Global entitled "Mineral Resource
and Mineral Reserve Update for the Balogo Project" (the "Balogo
Technical Report").
In April 2015, MNG Gold Burkina
SARL (a subsidiary of Avesoro Jersey) executed an agreement with
Golden Rim Resources Ltd to acquire its entire interest in the
Balogo Gold Mine. Since acquisition Avesoro Jersey has invested
approximately US$13 million as at
30 June 2017 in additional drilling
programs to delineate Mineral Reserves and Resources, feasibility
studies and heavy mining equipment. Surrounding the Balogo Gold
Mine there are a significant number of near-mine prospects that are
currently the subject of exploration evaluation.
In February 2016, Avesoro Jersey
acquired the Youga Gold Mine from Endeavour Mining Corporation. The
Youga Gold Mine comprises an operating conventional open pit gold
mine and three stage crushing, a single stage ball milling and
Carbon in Leach ("CIL")
processing plant with a processing throughput of approximately 1
million tonnes of ore per year at Youga and the nearby Ouaré
deposit, located approximately 45km east of the Youga plant. The
Youga mine has been in operation since 2008 and has produced
approximately 600,000 ounces of gold prior to being acquired by
Avesoro Jersey.
The most recent Mineral Reserve and Mineral Resource estimations
for the Assets, as completed by CSA Global are detailed below.
Table 1: Measured & Indicated Mineral Resource Estimate
at 28th February 2017
Deposit
|
Indicated
Resource
|
Inferred
Resource
|
|
Tonnes
Mt
|
Au Grade
g/t
|
Au Metal
koz
|
Tonnes
Mt
|
Au Grade
g/t
|
Au Metal
koz
|
Youga
|
10.5
|
1.41
|
474.7
|
5.7
|
1.28
|
234
|
Ouaré
|
5.1
|
1.39
|
228.3
|
7.2
|
1.8
|
406
|
Balogo
|
0.45
|
6.75
|
98.6
|
0.1
|
4
|
15
|
Total
|
16.05
|
1.55
|
801.6
|
13
|
1.57
|
655
|
Notes:
1. Reporting cut-off is
0.55 g/t Au for all deposits.
2. The Mineral Resource
Estimate has been depleted for mining up to 28th February 2017. The
effective date of the Mineral Resource is
February 28th,
2017.
3. Figures have been
rounded to the appropriate level of precision for the reporting of
Resources.
4. Due to rounding,
some columns or rows may not compute exactly as shown.
5. The Mineral
Resources are stated as in situ dry tonnes. All figures are in
metric tonnes.
6. The Mineral Resource
has been classified under the guidelines of the Canadian Institute
of Mining, Metallurgy and Petroleum
(CIM) Standards on
Mineral Resources and Reserves, Definitions and Guidelines prepared
by the CIM Standing Committee on
Reserve Definitions
and adopted by CIM Council, and procedures for classifying the
reported Mineral Resources were undertaken
within the context of
the Canadian Securities Administrators National Instrument 43-101
(NI 43-101).
7. The model is
reported above a surface based on the NPVS shell from a US$1,500
gold price pit optimisation run to support
assumptions relating
to reasonable prospects of eventual economic extraction.
8. Mineral Resources
that are not Mineral Reserves do not have demonstrated economic
viability.
9. Mineral Resources
have been reported inclusive of Mineral Reserves, where
applicable.
|
Table 2: Probable Mineral Reserves Estimate at 28th February 2017
Deposit
|
Tonnes
Mt
|
Au Grade
g/t
|
Au Metal
koz
|
Youga
|
5.98
|
1.43
|
275
|
Ouaré
|
2.64
|
1.67
|
141
|
Balogo
|
0.28
|
8.81
|
78
|
Total
|
9.32
|
1.71
|
513
|
Notes:
1.
The Mineral Reserve Estimate has been depleted for mining up to
28th February 2017
2.
Figures have been rounded to the appropriate level of precision for
reporting
3.
Due to rounding, some columns or rows may not compute exactly as
shown
4.
The Mineral Reserves are stated as in situ dry metric
tonnes
5.
The Mineral Reserves were prepared under the guidelines of the CIM,
for reporting under NI 43-101
6.
The Mineral Reserve is reported at a US$1,250 gold price
7.
Modifying factors of 90% mining recovery and 10% waste dilution
have been applied
8.
Probable Reserves were derived from indicated Resources
9.
Mineral Reserves are inclusive of Mineral Resources
|
Based on the above Mineral Reserves Estimate, the Assets are
forecast to have a total gold recovery of 464.5koz based on a
current mine life of eight years and average annual gold production
of 54koz, with average Life of Mine operating costs of US$870/oz, all in sustaining costs of
US$962/oz and a post-tax NPV of
US$134 million at an 8% discount rate
and US$1,300/oz gold price.
The loss before tax of the audited carve out results of the
Youga Businesses for the year ended 31
December 2016 was US$3,494,000. The profit before tax of the
unaudited combined results of the Youga Businesses for the 6 months
ended 30 June 2017 was US$13,028,000.
The loss before tax of the audited combined results of the
Balogo Businesses for the year ended 31
December 2016 was US$1,834,000. The profit before tax of the
unaudited combined results of the Balogo Businesses for the 6
months ended 30 June 2017 was
US$9,214,000.
4. Related Party Transaction
Avesoro Jersey, which currently holds 73.5 per cent. of the
Company's issued common shares is the vendor of the Assets in the
Acquisition. Given the current shareholding of Avesoro Jersey, the
Acquisition will constitute a related party transaction under the
AIM Rules. The independent directors of the Company, who formed an
independent committee in July 2017 to
review the Acquisition, and consisting of Mr David Netherway, Mr Jean-Guy Martin and Mr Loudon Owen consider, having consulted with the
Company's Nominated Adviser, that the terms of this transaction are
fair and reasonable insofar as its shareholders are concerned.
The Acquisition will also constitute a related party transaction
under the TSX Rules and applicable Canadian securities laws,
including Multilateral Instrument 61-101 – Protection of Minority
Security Holders in Special Transactions ("MI 61-101").
Accordingly, the Independent Committee of the Board of Directors of
the Company retained Duff & Phelps who have prepared an
independent formal valuation of the Assets as required by MI
61-101. The full text of the valuation will be included in the
circular for the special shareholder meeting. See below under
"Formal Valuation."
The Company will also be seeking minority shareholder approval
of the Acquisition pursuant to section 5.6 of MI 61-101, as further
described below. In determining minority approval for the
Acquisition, the Company is required to exclude the votes attached
to Common Shares that, to the knowledge of the Company or any
"interested party" or their respective directors and senior
officers, after reasonable inquiry, are beneficially owned or over
which control or direction is exercised by "interested parties" and
their "related parties" and "joint actors" (all as defined in MI
61-101). Accordingly, at the Special Meeting, the Common Shares
held by (i) Avesoro Jersey, and (ii) any of its related parties,
associates or affiliates, and joint actors will be excluded for the
purposes of determining minority approval of the Acquisition. This
is expected to be 3,922,952,429 Common Shares.
Neither the Company nor any of its officers or directors, after
reasonable inquiry, are aware of any prior valuations or bona fide
offers that have been completed or received by Avesoro Jersey in
the past 24 months in respect of the Assets or are otherwise
relevant to the Acquisition, other than the Duff & Phelps
valuation.
The Acquisition is also subject to the receipt of TSX approval.
However, the Company qualifies as an "eligible inter-listed issuer"
as defined under the TSX Company Manual and, accordingly, is
permitted to avail itself of the exemption under Section 602.1 of
the TSX Company Manual which exempts an "eligible interlisted
issuer" listed on a recognized exchange, such as AIM, from the
application of the requirements contained in Section 501 of the TSX
Company Manual in respect of a transaction involving insiders or
other related parties.
5. Formal Valuation
The Independent Committee retained Duff & Phelps to provide
an independent formal valuation in compliance with MI 61-101. Duff
& Phelps is a global valuation and corporate finance advisor
with expertise in complex valuation, transaction opinions, M&A,
disputes and investigations, restructuring, and compliance and
regulatory consulting.
Duff & Phelps delivered their written valuation report,
dated 11 October 2017, containing the
Valuation that concluded that the fair market value of the Acquired
Entities (which hold the Assets) was in the range of US$71 million to US$83 million as of 30 September 2017, and a Fairness Opinion that
concluded that the consideration to be paid for the Assets by the
Company pursuant to the Acquisition is fair from a financial point
of view to the Company. The Independent Committee carefully
reviewed the Valuation and Fairness Opinion as well as other
relevant materials and has unanimously recommended the approval of
the Acquisition to the Board.
6. Information on Avesoro Jersey
Avesoro Jersey, is a privately-owned Jersey incorporated gold
mining and development company focused on West Africa. Avesoro Jersey owns the Youga
Gold Mine and Balogo Gold Mine in Burkina
Faso, the Kokoya Gold Mine in Liberia and various exploration assets. The
majority shareholder in Avesoro Jersey is Mr Murathan Günal, the eldest son of Mr Mehmet
Nazif Günal, a Turkish entrepreneur, who is the owner and founder
of the wider MNG Group. The MNG Group is a Turkish conglomerate
that operates through multiple divisions across construction,
energy, tourism, transport, finance and media.
Avesoro Jersey is the approximately 73.5 per cent. majority
shareholder in the Company and has provided the Company with
approximately US$90 million of equity
funding to date.
Following the completion of the Acquisition and Placing, Avesoro
Jersey will hold 5,945,715,251 Common Shares, representing
approximately 73 per cent. of the then issued and outstanding
Common Shares of the Company on a non-diluted basis. If the
99,681,021 Common Shares available under the Broker Option are
issued, Avesoro Jersey will hold 5,945,715,251 Common Shares,
representing approximately 72 per cent. of the then issued and
outstanding Common Shares of the Company on a non-diluted
basis.
7. Principal Terms of the Acquisition
Pursuant to the Acquisition Agreement, the Company (or one of
its subsidiaries to be nominated by the Company) has conditionally
agreed to acquire the entire issued and outstanding shares of the
Acquired Entities (which collectively hold the Assets) from Avesoro
Jersey. The Acquisition values the Assets at £52,651,515 (being the
sterling equivalent of US$69,500,000
converted at the Exchange Rate). The Company will satisfy the
consideration payable for the Acquisition at Closing by the issue
of 2,033,492,822 Consideration Shares to Avesoro Jersey
(representing £38,636,364 at the Placing Price) and payment of
£14,015,152 in cash (from funds raised in the Placing).
The Acquisition is subject to the satisfaction or waiver of a
number of conditions, including the passing by the minority
shareholders of the Acquisition Resolution at the Special Meeting
and the admission by the LSE of the Consideration Shares to AIM
becoming effective in accordance with the AIM Rules.
Avesoro Jersey has made certain customary and transaction
specific covenants in the Acquisition Agreement. These include,
among other things, covenants to preserve and protect the
businesses and assets of the Youga Gold Mine and the Balogo Gold
Mine including maintaining adequate operating levels of stock and
inventory.
Avesoro Jersey has given certain warranties and indemnities in
respect of the Acquired Entities, subject to customary limitations
in the case of the warranties.
8. Principal Terms of the Placing
Placing
The Company has conditionally placed 797,449,000 shares with
institutional investors at the Placing Price of 1.9 pence per Placing Share to raise
approximately £15.2 million (approximately US$20.0 million) before expenses.
Broker Option
The Company has granted the Agents the option to place up to an
additional 99,681,021 Common Shares at the Placing Price, in the
event that further requests to participate in the Placing are
received after the date of this Announcement and before the Broker
Option closes at 5.00pm London Time
on 31 October 2017. Funds received
from the Broker Option will be used for working capital
purposes.
Private Placement in Canada
The Placing has been made available in Canada by way of a private placement to
accredited investors in the provinces of Canada. All
securities issued under the Placing in Canada or to residents of Canada will be subject to a four month hold
period from the date of issue in accordance with applicable
securities laws in Canada, and
potentially additional restrictions under the laws of other
jurisdictions in which the Placing may be made. Sprott Capital
Partners, a division of Sprott Private Wealth LP ("Sprott")
is acting as agent for the Placing in Canada. Persons in Canada who are not accredited investors are
not eligible to participate in the Placing or the Broker
Option.
9. Agency Agreement
The Company, Numis Securities Limited ("Numis"), Hannam
& Partners (Advisory) LLP ("H&P") (Numis and H&P
together being the "Joint Bookrunners" and each a "Joint
Bookrunner") and Sprott (the Joint Bookrunners and Sprott,
together being the "Agents" and each an "Agent"
herein have entered into an agency agreement (the "Agency
Agreement") pursuant to which the Agents have agreed, in
accordance with the terms of the Agency Agreement, to use their
respective reasonable endeavours to procure subscribers on behalf
of the Company for 791,449,000 Placing Shares at the Placing
Price.
The Agency Agreement contains customary warranties given by the
Company to the Agents as to matters relating to the Company and its
business and a customary indemnity given by the Company to the
Agents in respect of liabilities arising out of or in connection
with the Placing. The Joint Bookrunners are entitled to terminate
the Agency Agreement in certain circumstances prior to Admission,
including circumstances where any of the warranties are found not
to be true or accurate or were misleading and upon the occurrence
of certain other events.
The Placing is conditional, inter alia, on:
|
i.
|
The relevant
customary conditions in the Agency Agreement being satisfied or
(if
applicable) waived
and the Agency Agreement not having been terminated in
accordance with its
terms prior to Admission;
|
|
ii.
|
Minority shareholder
approval being obtained for the Acquisition on the terms
described
above and the
Subscription and the Acquisition becoming unconditional;
|
|
iii.
|
The Acquisition
Agreement not being terminated in accordance with its terms prior
to
Admission;
and
|
|
iv.
|
Admission becoming
effective by no later than 8.00 a.m. on or around 18
December
2017 (or such later
time and/or as the Agents and the Company may agree, being
not
later than 8.00 a.m.
on 31 January 2018).
|
|
|
|
The Company has also granted the Broker Option to the Agents
under the Agency Agreement in order to enable the Agents to place
up to an additional 99,681,021 Common Shares at the Placing Price,
in the event that further requests to participate in the Placing
are received.
The Broker Option is exercisable at the discretion of the Joint
Bookrunners on one or more occasions at any time prior to
5.00 p.m. London time on 31
October 2017. Any Shares issued pursuant to the exercise of
the Broker Option will be issued at the Placing Price and on the
terms and conditions set out in the Appendix to this announcement.
The Broker Option may be exercised by the Joint Bookrunners at
their discretion, with the agreement of the Company, but there is
no obligation on the Joint Bookrunners to exercise the Broker
Option or to seek to procure subscribers for Common Shares pursuant
to the Broker Option. The net proceeds received by the Company
pursuant to the exercise of the Broker Option (if any), being a
maximum of approximately US$2.5
million gross of fees, will be used for general corporate
purposes.
The maximum number of new Common Shares that may be issued
pursuant to the exercise of the Broker Option is 99,681,021, and
therefore the maximum number of Common Shares (including Common
Shares issued pursuant to exercise of the Broker Option) that may
be issued pursuant to the Placing and the Broker Option is
897,130,021.
The Common Shares issued pursuant to the Placing will represent,
in aggregate, approximately 9.8 per cent. of the enlarged issued
share capital of the Company following the Placing. The Common
Shares issued pursuant to the Placing together with Common Shares
issued upon exercise of the Broker Option (assuming that the Broker
Option is exercised in full) would represent, in aggregate,
approximately 10.9 per cent. of the enlarged issued share capital
of the Company following the Placing and the exercise in full of
the Broker Option. The Common Shares issued pursuant to the Placing
and all Common Shares issued upon exercise of the Broker Option
will be issued fully paid and will, upon issue, rank pari passu in
all respects with the Common Shares then in issue, including all
rights to receive all dividends and other distributions declared,
made or paid following Admission of such Common Shares. Neither the
Common Shares issued pursuant to the Placing nor the Common Shares
that may be issued under the Broker Option are being made available
to the public or being offered or sold in any jurisdiction where it
would be unlawful to do so. The Placing is not underwritten by the
Agents.
Application will be made to the London Stock Exchange and the
TSX for Admission of the Common Shares to be issued pursuant to the
Placing and the Acquisition (and if relevant on exercise of the
Broker Option), and it is expected that dealings will commence at
8.00 a.m. (London time) on 18
December 2017.
The information contained within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014.
APPENDIX A
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE
PLACING.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING OR SUBSCRIBE FOR SHARES PURSUANT TO THE BROKER OPTION. ALL
OFFERS OF THE PLACING SHARES AND ANY BROKER OPTION SHARES WILL BE
MADE PURSUANT TO AN EXEMPTION UNDER DIRECTIVE 2003/71/EC (AND
AMENDMENTS THERETO), AND INCLUDING ANY RELEVANT IMPLEMENTING
MEASURE, IN THE RELEVANT MEMBER STATE OF THE EUROPEAN ECONOMIC AREA
("EEA")) (THE "PROSPECTUS DIRECTIVE"), FROM THE
REQUIREMENT TO PRODUCE A PROSPECTUS FOR OFFERS OF THE PLACING
SHARES AND BROKER OPTION SHARES. THIS ANNOUNCEMENT AND THE TERMS
AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT ARE FOR INFORMATION
PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) PERSONS
IN AN EEA MEMBER STATE WHICH HAS IMPLEMENTED THE PROSPECTUS
DIRECTIVE (A "RELEVANT MEMBER STATE"), UNDER THE FOLLOWING
EXEMPTIONS UNDER THE PROSPECTUS DIRECTIVE, IF AND TO THE EXTENT
THEY HAVE BEEN IMPLEMENTED IN THAT RELEVANT MEMBER STATE: (I) TO
ANY LEGAL ENTITY WHICH IS A "QUALIFIED INVESTOR" AS DEFINED
IN THE PROSPECTUS DIRECTIVE; (II) TO FEWER THAN 150 NATURAL OR
LEGAL PERSONS (OTHER THAN QUALIFIED INVESTORS AS DEFINED IN THE
PROSPECTUS DIRECTIVE), AS PERMITTED UNDER THE PROSPECTUS DIRECTIVE;
OR (III) IN ANY OTHER CIRCUMSTANCES WHICH DO NOT REQUIRE THE
PUBLICATION BY THE COMPANY OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF
THE PROSPECTUS DIRECTIVE, PROVIDED THAT NO SUCH OFFER TO THE PUBLIC
SHALL RESULT IN A REQUIREMENT FOR THE PUBLICATION BY ANY OF THE
COMPANY, NUMIS SECURITIES LIMITED ("NUMIS"), HANNAM AND
PARTNERS (ADVISORY) LLP ("H&P") (EACH OF NUMIS AND
H&P BEING A "JOINT BOOKRUNNER" AND TOGETHER THE
"JOINT BOOKRUNNERS") OR SPROTT CAPITAL PARTNERS, A DIVISION
OF SPROTT PRIVATE WEALTH LP ("SPROTT") (THE JOINT
BOOKRUNNERS AND SPROTT TOGETHER BEING THE "BROKERS") OF A
PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE; AND
(B) (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF
THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION)
ORDER 2005, (THE "ORDER"); OR (II) HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS AND OTHER PERSONS FALLING WITHIN
ARTICLE 49(2)(A) TO (D) OF THE ORDER OR TO WHOM THEY MAY OTHERWISE
LAWFULLY BE DISTRIBUTED (ALL SUCH PERSONS TOGETHER BEING REFERRED
TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE INFORMATION
CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION
OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES,
AUSTRALIA, JAPAN, NEW
ZEALAND, SOUTH AFRICA,
JERSEY OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION
OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT (WITHOUT
THE APPENDIX) MAY BE RELEASED, PUBLISHED OR DISTRIBUTED BY THE
COMPANY IN ACCORDANCE WITH ITS CONTINUOUS DISCLOSURE REQUIREMENTS
UNDER APPLICABLE CANADIAN SECURITIES LAWS AND THE REQUIREMENTS OF
THE TORONTO STOCK EXCHANGE ("TSX").
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO THE
LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A PURCHASE OF PLACING
SHARES AND/OR BROKER OPTION SHARES.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE
SECURITIES LAWS OF, OR WITH ANY SECURITIES REGULATORY AUTHORITY OF,
ANY STATE OR OTHER JURISDICTION OF THE
UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED,
DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES ABSENT REGISTRATION UNDER
THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. ANY OFFERING OF THE PLACING
SHARES TO BE MADE IN THE UNITED
STATES WILL BE MADE ONLY TO A LIMITED NUMBER OF "QUALIFIED
INSTITUTIONAL BUYERS" ("QIBS") WITHIN THE MEANING OF RULE
144A UNDER THE SECURITIES ACT ("RULE 144A") PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES
ACT IN A TRANSACTION NOT INVOLVING A "PUBLIC OFFERING" AND OUTSIDE
THE UNITED STATES PERSONS IN
OFFSHORE TRANSACTIONS WITHIN THE MEANING OF, AND IN RELIANCE ON,
REGULATION S UNDER THE SECURITIES ACT. NO PUBLIC OFFERING OF THE
SHARES REFERRED
This Announcement is for information purposes only and does not
constitute an offer to sell or issue or the solicitation of an
offer to buy, subscribe for or otherwise acquire any Placing Shares
or Broker Option Shares in any jurisdiction in which any such offer
or solicitation would be unlawful.
All offers of the Placing Shares and any Broker Option Shares
will be made pursuant to an exemption under the Prospectus
Directive from the requirement to produce a prospectus. This
Announcement is being distributed and communicated to persons in
the UK only in circumstances to which section 21(1) of the
Financial Services and Markets Act 2000 (as amended) "FSMA")
does not apply.
The securities referred to in this Announcement have not been
approved or disapproved by the US Securities and Exchange
Commission, any State securities commission or any other regulatory
authority in the United States,
nor have any of the foregoing authorities passed upon or endorsed
the merits of the Placing or the accuracy or adequacy of this
Announcement. Any representation to the contrary is a criminal
offence in the United States.
The distribution of this Announcement and the Placing and/or
issue of the Placing Shares and any Broker Option Shares in certain
jurisdictions may be restricted by law. No action has been taken by
the Company, the Brokers or any of their respective affiliates that
would permit an offer of the Placing Shares or Broker Option Shares
or possession or distribution of this Announcement or any other
offering or publicity material relating to such Placing Shares or
Broker Option Shares in any jurisdiction where action for that
purpose is required. Persons into whose possession this
Announcement comes are required by the Company and the Brokers to
inform themselves about and to observe any such restrictions.
This Announcement should be read in its entirety. In particular,
you should read and understand the information provided in the
"Important Notices" section of this Announcement.
Persons who are invited to and who choose to participate in the
Placing will be deemed to have read and understood this
Announcement in its entirety, to be participating, making an offer
and acquiring Placing Shares (or Broker Option Shares, as the case
may be) on the terms and conditions contained in this Appendix and
to be providing the representations, warranties, indemnities,
acknowledgements and undertakings contained in this Appendix. In
particular, each such Placee represents, warrants, undertakes,
agrees and acknowledges (amongst other things), that:
1 it is a Relevant
Person and undertakes that it will acquire, hold, manage or dispose
of any Placing Shares and Broker Option Shares that are allocated
to it for the purposes of its business; and
2 in the case of a
Relevant Person in a Relevant Member State who acquires any Placing
Shares or Broker Option Shares pursuant to the Placing:
(a) it is a Qualified Investor;
and
(b) in the case of any Placing
Shares or Broker Option Shares acquired by it as a financial
intermediary, as that term is used in Article 3(2) of the
Prospectus Directive,
(i) the Placing Shares
acquired by it in the Placing have not been acquired on behalf of,
nor have they been acquired with a view to their offer or resale
to, persons in any Relevant Member State other than Qualified
Investors or in circumstances in which the prior consent of the
Joint Bookrunners has been given to the offer or resale; or
(ii) where Placing Shares have
been acquired by it on behalf of persons in any member state of the
EEA other than Qualified Investors, the offer of those Placing
Shares to it is not treated under the Prospectus Directive as
having been made to such persons; and
3 it is acquiring the
Placing Shares for its own account or is acquiring the Placing
Shares for an account with respect to which it exercises sole
investment discretion and has the authority to make and does make
the representations, warranties, indemnities, acknowledgements and
agreements contained in this Announcement; and
4 it understands (or,
if acting for the account of another person, such person
understands) the resale and transfer restrictions set out in this
Appendix; and
5 except for a limited
number of QIBs who have executed and delivered to the Company and
the Brokers a US investor letter substantially in the form provided
to it, (i) it and the person(s), if any, for whose account or
benefit it is acquiring the Placing Shares are acquiring the
Placing Shares in an offshore transaction as defined in and in
accordance with Regulation S under the Securities Act
("Regulation S").
No offering / no prospectus
This Announcement does not constitute an offer, and may not be
used in connection with an offer, to sell or issue or the
solicitation of an offer to buy or subscribe for Placing Shares or
Broker Option Shares in any jurisdiction in which such offer or
solicitation is or may be unlawful.
No prospectus or other offering document has been or will be
submitted to be approved by the Financial Conduct Authority in
relation to the Placing and Placees' commitments will be made
solely on the basis of the information contained in this
Announcement and any information publicly announced through a
Regulatory Information Service (as defined in the AIM Rules for
Companies (the "AIM Rules")) or made available on the System
for Electronic Document Analysis and Retrieval (SEDAR) by or on
behalf of the Company on or prior to the date of this Announcement
(including, without limitation, the information which the Company
is required to public in accordance with the AIM Rules for
Companies as well as the rules and policies of the TSX, which
includes a description of the Company's business and certain of the
Company's financial information, including certain balance sheets
and income statements) (the "Publicly Available
Information") and subject to any further terms set forth in the
contract note or trade confirmation sent to individual placees.
Each Placee, by participating in the Placing, agrees that it has
neither received nor relied on any information, representation,
warranty or statement made by or on behalf of the Brokers or the
Company other than the Publicly Available Information and none of
the Brokers, the Company nor any person acting on such person's
behalf nor any of their affiliates has or shall have any liability
for any Placee's decision to participate in the Placing based on
any other information, representation, warranty or statement. Each
Placee acknowledges and agrees that it has relied on its own
investigation of the business, financial or other position of the
Company in accepting a participation in the Placing. Nothing in
this paragraph shall exclude the liability of any person for
fraudulent misrepresentation.
Details of the Agency Agreement, the Placing Shares and the
Broker Option Shares
The Brokers have entered into the Agency Agreement with the
Company under which the Brokers have undertaken, on the terms and
subject to the conditions set out in the Agency Agreement, to use
their respective reasonable endeavours to procure Placees for the
Placing Shares at a price of 1.9
pence per Placing Share (the "Placing Price") to
raise gross proceeds of approximately US$20.0 million. The Joint Bookrunners have been
granted an option to increase the size of the Placing and to
procure Placees for such additional number of Common Shares as will
raise gross proceeds of the Placing by up to US$2.5 million (the "Broker Option"). The
Joint Bookrunners give no assurance of the exercise (in whole or in
part) of the Broker Option.
The Broker Option is exercisable on more than one occasion at
any time prior to 5.00 p.m. London
Time on 31 October 2017. Any Broker
Option Shares issued pursuant to the exercise of the Broker Option
will be issued on the same terms and conditions as the Placing
Shares issued pursuant to the Placing. The Broker Option may be
exercised by the Joint Bookrunners and there is no obligation on
either Joint Bookrunner to exercise the Broker Option or to seek to
procure subscribers for Broker Option Shares or subscribe for any
Broker Option Shares themselves. Accordingly, any allocation of
Broker Option Shares is conditional upon such exercise and is
therefore not a firm allocation. The maximum number of Broker
Option Shares that may be issued pursuant to the exercise of the
Broker Option is 99,681,021.
The Placing is not being underwritten by any of the Brokers or
any of their respective affiliates.
The Placing Shares and any Broker Option Shares will, when
issued, be fully paid and will rank pari passu in all
respects with the existing common shares in the capital of the
Company, including the right to receive all dividends and other
distributions declared, made or paid in respect of such common
shares after the date of issue of the Placing Shares or any Broker
Option Shares (as the case may be).
As part of the Placing, the Company has agreed that it will not
issue or sell any common shares for a period of 90 days after
Admission without prior consent from the Joint Bookrunners. This
agreement is subject to certain customary exceptions and does not
prevent the Company from granting options, and allotting and
issuing common shares pursuant to options granted to employees in
the normal course of business.
Special Meeting and Applications for admission to listing and
trading on AIM and the Toronto Stock Exchange ("TSX")
The Special Meeting of the Company's shareholders will be held
on or about 14 December 2017 to
consider resolutions relating to the Acquisition (the
"Resolutions").
Application will be made to the London Stock Exchange for
admission to trading of the Placing Shares and any Broker Option
Shares on AIM ("Admission"), following passing of the
Resolutions by the requisite majority of the Company's
shareholders.
It is expected that Admission will take place on or before
8.00 a.m. (London time) on 18
December 2017 and that dealings in the Placing Shares and
any Broker Option Shares on AIM will commence at the same time.
The Company will apply for conditional approval of the TSX with
respect to the listing of the Placing Shares and any Broker Option
Shares, subject only to the satisfaction by the Company of
customary post-closing conditions imposed by the TSX in similar
circumstances.
Principal terms of the Placing
This Appendix gives details of the terms and conditions of, and
the mechanics of participation in, the Placing. No commissions will
be paid to Placees or by Placees in respect of any Placing Shares
or any Broker Option Shares.
1 The Joint
Bookrunners are acting as joint bookrunners and agents of the
Company and Sprott is acting as a co-lead manager and agent of the
Company in connection with the Placing.
2 Participation in the
Placing is only available to persons who may lawfully be, and are,
invited by a Broker to participate. The Brokers and their
respective affiliates are entitled to participate as principal in
the Placing.
3 The price per
Placing Share (and if relevant per Broker Option Share) (the
"Placing Price") is 1.9 pence
and is payable to the Relevant Broker.
4 Each Placee's
allocation is determined by the Broker in their discretion
following consultation with the Company and has been or will be
confirmed orally by the Relevant Broker and a trade confirmation
will be dispatched as soon as possible thereafter. The oral
confirmation from the relevant Broker to the relevant Placee will
constitute an irrevocable legally binding commitment upon such
person (who will at that point become a Placee) in favour of the
Relevant Broker and the Company to acquire the number of Placing
Shares (or if relevant Broker Option Shares) allocated to it and to
pay the relevant Placing Price on the terms and conditions set out
in this Appendix and in accordance with the Company's articles of
association. Except with the express consent of the Relevant
Broker, such commitment will not be capable of variation or
revocation at the time at which it is submitted. Placees in
Canada will also be required to
execute subscription agreements (the "Subscription
Agreements") and to return those executed Subscription
Agreements to the Relevant Broker by no later than 30 October 2017, failing which their
allocation may be cancelled.
5 An offer to acquire
Placing Shares and (if relevant) Broker Option Shares, which has
been communicated by a prospective Placee to the Relevant Broker
which has not been withdrawn or revoked prior to publication of
this Announcement shall not be capable of withdrawal or revocation
immediately following the publication of this Announcement without
the consent of the Brokers.
6 Each Placee will
have an immediate, separate, irrevocable and binding obligation,
owed to the Relevant Broker, to pay to such Relevant Broker (or as
it may direct) in cleared funds an amount equal to the product of
the Placing Price and the number of Placing Shares and (if
relevant) Broker Option Shares such Placee has agreed to acquire
and the Company has agreed to issue to that Placee.
7 Each Placee's
allocation and commitment will be evidenced by a contract note or
trade confirmation issued to such Placee by the Relevant Broker.
The terms of this Appendix will be deemed incorporated therein.
8 Except as required
by law or regulation, no press release or other announcement will
be made by the Brokers or the Company using the name of any Placee
(or its agent), in its capacity as Placee (or agent), other than
with such Placee's prior written consent.
9 Irrespective of the
time at which a Placee's allocation(s) pursuant to the Placing
is/are confirmed, settlement for all Placing Shares and (if
relevant) Broker Option Shares to be acquired pursuant to the
Placing will be required to be made at the same time, on the basis
explained below under 'Registration and Settlement'.
10 All obligations under the
Placing will be subject to fulfilment of the conditions referred to
below under 'Conditions of the Placing' and to the Placing not
being terminated on the basis referred to below under 'Termination
of the Placing'.
11 Each Placee's rights and
obligations in respect of the Placing will terminate only in the
circumstances described below and will not be capable of rescission
or termination by the Placee.
12 To the fullest extent
permissible by law, none of the Brokers nor any of their respective
affiliates nor any of their respective or affiliates' agents,
directors, officers or employees shall have any liability to
Placees (or to any other person whether acting on behalf of a
Placee or otherwise). In particular, none of the Brokers nor any of
their respective affiliates nor any of their agents, directors,
officers or employees shall have any liability (including, to the
extent permissible by law, any fiduciary duties) in respect of the
Brokers' conduct of the Placing.
Registration and Settlement
Placees will be sent a contract note or trade confirmation which
will confirm the number of Placing Shares and any Broker Option
Shares allocated to them and the aggregate amount owed by them to
the Relevant Broker. Each Placee will be deemed to agree that it
will do all things necessary to ensure that delivery and payment is
completed in accordance with either the standing CREST or
certificated settlement instructions which they have in place with
the Relevant Broker or otherwise as such Relevant Broker may direct
or, in the case of a Placee in Canada, in accordance with the terms and
conditions set forth in that Placee's Subscription Agreement.
Other than Placees in Canada,
settlement of transactions in the Placing Shares and any Broker
Option Shares (ISIN: CA0515471070) following Admission will take
place within the CREST system. Settlement through CREST will be on
a T+2 basis unless otherwise notified by the Relevant Broker and is
expected to occur on 18 December
2017. Settlement will be on a delivery versus payment basis.
However, in the event of any difficulties or delays in the
admission of the Placing Shares and any Broker Option Shares to
CREST or the use of CREST in relation to the Placing, the Company
and the Relevant Broker may agree that the Placing Shares and any
Broker Option Shares should be issued in certificated form. The
Brokers reserve the right to require settlement for the Placing
Shares and any Broker Option Shares, and to deliver the Placing
Shares and any Broker Option Shares to Placees, by such other means
as it deems necessary if delivery or settlement to Placees is not
practicable within the CREST system or would not be consistent with
regulatory requirements in a Placee's jurisdiction.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above, in respect of either CREST or certificated deliveries, at
the rate of 2 percentage points above prevailing LIBOR as
determined by the Joint Bookrunners.
Placing Shares and any Broker Option Shares purchased pursuant
to the Placing by a Placee in Canada will be either delivered in definitive
certificate form or delivered and deposited in the form of an
electronic deposit pursuant to the non-certificate issue system
maintained by CDS Clearing and Depositary Services Inc., in each
case as specified in the delivery instructions in that Placee's
Subscription Agreement and subject to receipt by the Company of the
purchase price for those Placing Shares or the Broker Option
Shares, as the case may be.
If Placees do not comply with their obligations the Relevant
Broker may sell any or all of their Placing Shares and any Broker
Option Shares on their behalf and retain from the proceeds, on
behalf of the Company, an amount equal to the Placing Price of each
share sold plus any interest due. Placees will, however, remain
liable for any shortfall below the Placing Price and for any stamp
duty or stamp duty reserve tax (together with any interest or
penalties) which may arise upon the sale of their Placing Shares
and any Broker Option Shares on their behalf.
If Placing Shares or Broker Option Shares are to be delivered to
a custodian or settlement agent, Placees must ensure that, upon
receipt, the conditional contract note or trade confirmation is
copied and delivered immediately to the relevant person within that
organisation. Insofar as Placing Shares or Broker Option Shares are
registered in a Placee's name or that of its nominee or in the name
of any person for whom a Placee is contracting as agent or that of
a nominee for such person, such Placing Shares and/or Broker Option
Shares should, subject as provided below, be so registered free
from any liability to UK stamp duty or stamp duty reserve tax.
Placees will not be entitled to receive any fee or commission in
connection with the Placing.
Conditions of the Placing
The Placing is conditional upon the Agency Agreement becoming
unconditional and not having been terminated in accordance with its
terms.
The obligations of the Brokers under the Agency Agreement are,
and the Placing is, conditional on, inter alia:
(a) the Company having delivered
to the Joint Bookrunners a certificate certifying, inter
alia, that (i) the Company has complied with all the covenants
and satisfied all the terms and conditions of the Agency Agreement
and the Subscription Agreements required to be complied with or
satisfied prior to the time of closing except to the extent that
the same have been waived by the Joint Bookrunners, (ii) no
transaction out of the ordinary course of business, material to the
Company, taken as a whole, has been entered into by the Company or
its material subsidiaries or has been approved by the management of
any of them and (iii) the representations and warranties of the
Company contained in the Agency Agreement and the Subscription
Agreements, and in any certificates of the Company delivered
pursuant to or in connection with the Agency Agreement and the
Subscription Agreements, are true and correct as at the time such
representations and warranties are made;
(b) the Placing Shares and any
Broker Option Shares having been conditionally approved for listing
on the TSX, subject only to the Standard Listing Conditions;
(c) the Acquisition Agreement and
the Subscription Agreements having been executed and delivered by
the Company in form and substance satisfactory to the Joint
Bookrunners and their legal counsel, acting reasonably;
(d) the Acquisition
Agreement having been entered into on or before the date of this
Announcement and remaining in full force and effect (without any
amendments to its terms) and not having been terminated or lapsed,
there having been no breach of its terms which in the opinion of
the Joint Bookrunners (acting in good faith) is material in the
context of the Placing or any circumstances that would give any
party to the Acquisition Agreement the right to terminate the
Acquisition Agreement;
(e) all conditions required to
complete the Acquisition having been satisfied or waived (and, if
waived, such waiver(s) having been disclosed in writing to and
approved by the Joint Bookrunners) (save for (i) any condition
relating to the Agency Agreement becoming unconditional; (ii) any
condition relating to Admission becoming unconditional; and (iii)
the satisfaction of the Company's obligation to pay the
consideration under the Acquisition Agreement);
(f) the Company issuing and
allotting the Placing Shares and (where relevant) the Broker Option
Shares, subject only to Admission;
(g) the Company having received
all required shareholder and regulatory approvals (including
approval of the TSX) in respect of the Acquisition and the Company
obtaining minority approval as required under Multilateral
Instrument 61-101 – Protection of Minority Security Holders in
Special Transactions; and
(h) Admission taking place not
later than 8.00 a.m. (London time) on 31
January 2018,
(all conditions to the obligations of the Brokers included in
the Agency Agreement being together, the "conditions"). The
Joint Bookrunners and the Company may agree to extend the time
and/or date by which any condition is required to be fulfilled to
no later than 8.00 a.m. on
31 January 2018.
If any of the conditions set out in the Agency Agreement is not
fulfilled or, where permitted, waived to the extent permitted by
law or regulations in accordance with the Agency Agreement within
the stated time periods (or such later time and/or date as the
Company and the Joint Bookrunners may agree), or the Agency
Agreement is terminated in accordance with its terms (as to which,
see the "Termination of the Placing" section below), the
Placing will lapse and the Placee's rights and obligations shall
cease and terminate at such time and each Placee agrees that no
claim can be made by or on behalf of the Placee (or any person on
whose behalf the Placee is acting) in respect thereof.
By participating in the Placing, each Placee agrees that its
rights and obligations cease and terminate only in the
circumstances described above and under "Termination of the
Placing" below and will not be capable of rescission or
termination by it.
The Joint Bookrunners may, at their absolute discretion and upon
such terms as they think appropriate, waive fulfilment of all or
any of the conditions in the Agency Agreement in whole or in part
(to the extent permitted by law or regulation) or extend the time
provided for fulfilment of any such conditions in respect of all or
any part of the performance thereof. Any such extension or waiver
will not affect Placees' commitments as set out in this
Appendix.
Neither of the Joint Bookrunners nor any of their affiliates nor
any of their or their respective affiliates' agents, directors,
officers or employees nor the Company shall have any liability to
any Placee (or to any other person whether acting on behalf of a
Placee or otherwise) in respect of any decision any of them may
make as to whether or not to waive or to extend the time and/or
date for the satisfaction of any condition to the Placing nor for
any decision any of them may make as to the satisfaction of any
condition or in respect of the Placing generally and by
participating in the Placing each Placee agrees that any such
decision is within the absolute discretion of the Joint Bookrunners
and the Company.
Termination of the Placing
Each Joint Bookrunner may in its absolute discretion terminate
the Agency Agreement at any time up to and including Admission in
certain circumstances, including (among others) where:
(a) the Company is in breach or
default under or in non-compliance with any warranty,
representation, term or condition of the Agency Agreement or the
Subscription Agreements; or
(b) any order to cease or suspend
trading in any securities of the Company or prohibiting or
restricting the distribution of any of the Placing Shares is made,
or proceedings are announced, commenced or threatened for the
making of any such order, by any securities commission or similar
regulatory authority, any stock exchange or any other competent
authority, and has not been rescinded, revoked or withdrawn; or
(c) any inquiry, action, suit,
investigation or other proceeding (whether formal or informal) in
relation to the Company or its material subsidiaries is instituted
or threatened or announced or any order is made by any governmental
body having jurisdiction over the Company or its material
subsidiaries (other than an inquiry, action, suit, investigation or
proceeding or order based solely upon the activities or alleged
activities of the Joint Bookrunners), which has not been rescinded,
revoked or withdrawn and which, in the opinion of the Joint
Bookrunners, acting reasonably, operates to prevent or materially
restrict the distribution of the Placing Shares into any
jurisdiction in which they have been lawfully offered or would
prevent or materially restrict the distribution of the Placing
Shares under the Agency Agreement and the Subscription Agreements
or would prevent or materially restrict trading in the Placing
Shares or would reasonably be expected to materially adversely
affect the market price or value of the Placing Shares; or
(d) there should occur any
material change, change of a material fact, occurrence or event or
any development that would reasonably be expected to result in a
material change or change of a material fact (other than a change
related solely to information provided by the Joint Bookrunners)
which, in the opinion of the Joint Bookrunners, acting reasonably,
has or would be expected to have a material adverse effect on or
change to certain aspects of the business of the Company and its
subsidiaries or material adverse effect on the market price or
value of any of the Placing Shares; or
(e) there should develop, occur or
come into effect or existence any event, action, state, condition
or major financial occurrence of national or international
consequence or any law or regulation or any international crisis,
act of terrorism or outbreak of hostilities which, in the opinion
of the Joint Bookrunners, acting reasonably, seriously adversely
affects or may seriously adversely affect the financial markets in
Canada, the United States or the United Kingdom or the business, operations or
affairs of the Company and its subsidiaries, taken as a whole, or
the market price, value of any of the Placing Shares; or
(f) the Company is required
to publish a supplementary circular.
If the Agency Agreement is terminated in accordance with its
terms, the rights and obligations of each Placee in respect of the
Placing as described in this Announcement shall cease and terminate
at such time and no claim may be made by any Placee in respect
thereof. For the avoidance of doubt, notwithstanding that a
termination right may arise under the Agency Agreement, the Joint
Bookrunners reserve the right to proceed with the Placing.
By participating in the Placing, each Placee agrees with the
Company and the Joint Bookrunners that the exercise by the Company
or the Joint Bookrunners of any right of termination or any other
right or other discretion under the Agency Agreement shall be
within the absolute discretion of the Company or the Joint
Bookrunners (as the case may be) and that neither the Company nor
the Joint Bookrunners need make any reference to such Placee and
that none of the Company, the Brokers, their respective affiliates
or their or their respective affiliates' agents, directors,
officers or employees, respectively, shall have any liability to
such Placee (or to any other person whether acting on behalf of a
Placee or otherwise) whatsoever in connection with any such
exercise.
By participating in the Placing, each Placee agrees that its
rights and obligations terminate only in the circumstances
described above and under the "Conditions of the Placing"
above and will not be capable of rescission or termination by it
after oral confirmation by the relevant Broker of its
allocation.
Representations, warranties and further terms
By participating in the Placing, each prospective Placee (and
any person acting on such Placee's behalf) represents, warrants,
acknowledges and agrees (for itself and for any such prospective
Placee) that:
1 it has read and
understood this Announcement in its entirety and that its
acquisition of the Placing Shares (or as the case may be Broker
Option Shares) is subject to and based upon all the terms,
conditions, representations, warranties, indemnities,
acknowledgements, agreements and undertakings and other information
contained in this Appendix and that it has not relied on, and will
not rely on, any information given or any representations,
warranties or statements made at any time by any person in
connection with Admission, the Placing, the Company, the Common
Shares, or otherwise, other than the information contained in this
Announcement and the Publicly Available Information;
2 it has not received
a prospectus or other offering document in connection with the
Placing and acknowledges that no prospectus or other offering
document has been or will be prepared in connection with the
Placing;
3 the Common Shares
are admitted to trading on AIM, a market of the London Stock
Exchange plc (the "LSE") and listed on the Toronto Stock
Exchange (the "TSX"), and that it is able to obtain or
access the Publicly Available Information and has had access to all
other information regarding the Company and its present and
prospective business, assets, liabilities and financial condition
that it reasonably considers important in making the decision to
acquire the Placing Shares and it has read and understood such
information;
4 none of the Brokers
nor the Company nor any of their respective affiliates, or their or
their respective affiliates' agents, directors, officers or
employees, respectively, nor any person acting on behalf of any of
them has provided, and will not provide, it with any material
regarding the Placing Shares or Broker Option Shares or the Company
or any other person other than the information in this
Announcement, such information being all that it deems necessary to
make an investment decision in respect of the Placing Shares and
(if relevant) the Broker Option Shares; nor has it requested the
Brokers, the Company, any of their respective affiliates, agents,
directors, officers or employees or any person acting on behalf of
any of them to provide it with any such information;
5 none of the Brokers
nor any person acting on their behalf nor any of their affiliates,
or their or their respective affiliates, agents, directors,
officers or employees, has or shall have any liability for this
Announcement or any other Publicly Available Information, or any
representation relating to the Company, provided that nothing in
this paragraph excludes the liability of any person for fraudulent
misrepresentation made by that person;
6 the content of this
Announcement and the Publicly Available Information has been
prepared by and is exclusively the responsibility of the Company
and that none of the Brokers nor any persons acting on their behalf
are responsible for or have or shall have any liability for any
information or representation, warranty or statement relating to
the Company contained in this Announcement or any other Publicly
Available Information, nor will they be liable for any Placee's
decision to participate in the Placing based on any information,
representation, warranty or statement contained in this
Announcement, any other Publicly Available Information or
otherwise. Nothing in this Appendix shall exclude any liability of
any person for fraudulent misrepresentation;
7 it is not, and at
the time Admission becomes effective will not be, a resident of
Australia, South Africa, New
Zealand, or Japan;
8 unless
it has completed a Subscription Agreement, acknowledges that it is
not, and at the time the Placing Shares (or the Broker Option
Shares, as the case may be) are acquired will not be, a resident of
Canada;
9 the Placing Shares
and any Broker Option Shares are being offered and sold outside
the United States only in
"offshore transactions" as defined in, and in accordance with,
Regulation S under the Securities Act. Unless it is a QIB acquiring
Placing Shares pursuant to an exemption from the registration
requirements of the Securities Act in a transaction not involving a
"public offering", it and any account for which it is acting is
outside the United States and
acquiring the Placing Shares in an "offshore
transaction" as defined in, and in accordance with, Regulation
S under the Securities Act;
10 it understands that
the Placing Shares have not been and will not be registered under
the Securities Act or under the applicable securities laws of any
state or other jurisdiction of the United
States and that (i) the Placing Shares and any Broker Option
Shares are being offered and sold outside the United States in offshore transactions" as
defined in, and in accordance with, Regulation S; and (ii) in
the United States only to persons
who are QIBs pursuant to an exemption from the registration
requirements of the Securities Act in a transaction not involving a
"public offering";
11 (i) the only information on
which it is entitled to rely and on which it has relied in
committing to subscribe for the Placing Shares or Broker Option
Shares (as the case may be) is contained in this Announcement, the
Publicly Available Information such information being all that it
deems necessary to make an investment decision in respect of the
Common Shares and it has made its own assessment of the Company,
the Common Shares and the terms of the Placing based on Publicly
Available Information, (ii) Brokers and the Company (or any of
their respective affiliates) have not made any representation to
it, express or implied, with respect to the Company, the Placing,
the Placing Shares or any Broker Option Shares or the accuracy,
completeness or adequacy of the Publicly Available Information,
(iii) it has conducted its own investigation of the Company, the
Placing and the Common Shares, satisfied itself that the
information is still current and relied on that investigation for
the purposes of its decision to participate in the Placing and (iv)
it has not relied on any investigation that the Brokers or any
person acting on their behalf may have conducted with respect to
the Company, the Placing or the Placing Shares (or the Broker
Option Shares);
12 neither the Placing Shares nor
the Broker Option Shares have been registered or otherwise
qualified, and will not be registered or otherwise qualified, for
offer and sale nor will a prospectus be cleared or approved in
respect of any of the Placing Shares or Broker Option Shares under
the securities laws of the United
States, or any state or other jurisdiction of the United States, nor approved or disapproved
by the US Securities and Exchange Commission, any state securities
commission or other regulatory authority in the United States, nor have any of the
foregoing authorities passed upon or endorsed the merits of the
Placing or the accuracy or adequacy of this Announcement. The
Placing Shares and Broker Option Shares have not been registered or
otherwise qualified for offer and sale nor will a prospectus be
cleared or approved in respect of the Placing Shares or Broker
Option Shares under the securities laws of Canada, Australia, South
Africa, New Zealand or
Japan and, subject to certain
exceptions, may not be offered, sold, taken up, renounced or
delivered or transferred, directly or indirectly, within
the United States, Australia, Canada, South
Africa, New Zealand or
Japan or in any country or
jurisdiction where any action for that purpose is required;
13 it and/or each person on whose
behalf it is participating:
(a) is entitled to acquire Placing
Shares (or Broker Option Shares, as the case may be) pursuant to
the Placing under the laws and regulations of all relevant
jurisdictions;
(b) has fully observed such laws
and regulations;
(c) has capacity and authority and
is entitled to enter into and perform its obligations as an
acquirer of Placing Shares (or Broker Option Shares, as the case
may be) and will honour such obligations; and
(d) has obtained all necessary
consents and authorities (including, without limitation, in the
case of a person acting on behalf of a Placee, all necessary
consents and authorities to agree to the terms set out or referred
to in this Appendix) to enable it to enter into the transactions
contemplated hereby and to perform its obligations in relation
thereto;
14 it will not distribute,
forward, transfer or otherwise transmit this Announcement or any
part of it, or any other presentational or other materials
concerning the Placing in or into the
United States (including electronic copies thereof) to any
person, and it has not distributed, forwarded, transferred or
otherwise transmitted any such materials to any person;
15 the Placing Shares (or Broker
Option Shares, as the case may be) may not be sold, transferred or
otherwise disposed on the TSX or, except pursuant to an exemption
from prospectus requirements under Canadian securities laws, to any
person in Canada, on the TSX or
otherwise into Canada, for a
period of four months plus one day from the date of completion of
the Placing;
16 none of the Brokers, their
affiliates and any person acting on their behalf is making any
recommendations to it, advising it regarding the suitability of any
transactions it may enter into in connection with the Placing and
that participation in the Placing is on the basis that it is not
and will not be a client of any Broker and that no Broker has any
duties or responsibilities to it for providing the protections
afforded to the Brokers' clients or customers or for providing
advice in relation to the Placing nor in respect of any
representations, warranties, undertakings or indemnities contained
in the Agency Agreement nor for the exercise or performance of any
of its rights and obligations thereunder including any rights to
waive or vary any conditions or exercise any termination right;
17 it will make payment to the
Relevant Broker (or as the Relevant Broker may direct) for the
Placing Shares (or Broker Option Shares, as the case may be)
allocated to it in accordance with the terms and conditions of this
Announcement on the due times and dates set out in this
Announcement or in the Subscription Agreement, as the case may be,
failing which the relevant Placing Shares (or Broker Option Shares,
as the case may be) may be placed with others on such terms as the
Relevant Broker may determine in their absolute discretion without
liability to the Placee and it will remain liable for any shortfall
below the net proceeds of such sale and the placing proceeds of
such Placing Shares (or Broker Option Shares, as the case may be)
and may be required to bear any stamp duty or stamp duty reserve
tax (together with any interest or penalties due pursuant to the
terms set out or referred to in this Announcement) which may arise
upon the sale of such Placee's Common Shares on its behalf;
18 its allocation (if any) of
Placing Shares (or Broker Option Shares, as the case may be) will
represent a maximum number of Placing Shares (or Broker Option
Shares, as the case may be) which it will be entitled, and
required, to acquire or subscribe for, and that it may be called
upon to acquire or subscribe for a lower number of Placing Shares
and/or Broker Option Shares (if any), but in no event in aggregate
more than the aforementioned maximum;
19 no action has been or will be
taken by any of the Company, the Broker or any person acting on
behalf of the Company or the Brokers that would, or is intended to,
permit a public offer of the Placing Shares or Broker Option Shares
in the United States or in any
country or jurisdiction where any such action for that purpose is
required;
20 the person who it specifies for
registration as holder of the Placing Shares (or Broker Option
Shares, as the case may be) will be (i) the Placee or (ii) a
nominee of the Placee, as the case may be. The Brokers and the
Company will not be responsible for any liability to stamp duty or
stamp duty reserve tax resulting from a failure to observe this
requirement. It agrees to acquire Placing Shares or Broker Option
Shares pursuant to the Placing on the basis that the Placing Shares
or Broker Option Shares may be allotted to a CREST stock account of
the Relevant Broker who will hold them as nominee directly or
indirectly on behalf of the Placee until settlement in accordance
with its standing settlement instructions with it or in accordance
with the applicable Subscription Agreement, as the case may be;
21 the allocation, allotment,
issue and delivery to it, or the person specified by it for
registration as holder, of Placing Shares (or Broker Option Shares,
as the case may be) will not give rise to a stamp duty or stamp
duty reserve tax liability under (or at a rate determined under)
any of sections 67, 70, 93 or 96 of the Finance Act 1986
(depository receipts and clearance services) and that it is not
participating in the Placing as nominee or agent for any person or
persons to whom the allocation, allotment, issue or delivery of
Placing Shares (or Broker Option Shares, as the case may be) would
give rise to such a liability;
22 it and any person acting on its
behalf falls within Article 19(5) and/or 49(2) of the Order, as
amended, and undertakes that it will acquire, hold, manage and (if
applicable) dispose of any Placing Shares (or Broker Option Shares,
as the case may be) that are allocated to it for the purposes of
its business only;
23 it has not offered or sold and
will not offer or sell any Placing Shares (or Broker Option Shares,
as the case may be) to persons in the United Kingdom prior to Admission except to
persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or
agent) for the purposes of their business or otherwise in
circumstances which have not resulted and which will not result in
an offer to the public in the United
Kingdom within the meaning of section 85 (1) of FSMA;
24 if, within the EEA, it is: (i)
a "qualified investor" within the meaning of Article 2(1)(e) of the
Prospectus Directive; and (ii) a "professional client" or an
"eligible counterparty" within the meaning of Article 4(1)(11) and
Article 24(2), (3) and (4), respectively, of Directive 2004/39/EC
as implemented into national law of the relevant EEA state;
25 it has only communicated or
caused to be communicated and it will only communicate or cause to
be communicated any invitation or inducement to engage in
investment activity (within the meaning of section 21 of FSMA)
relating to Placing Shares or Broker Option Shares in circumstances
in which section 21(1) of FSMA does not require approval of the
communication by an authorised person;
26 it has complied and it will
comply with all applicable laws with respect to anything done by it
or on its behalf in relation to the Placing Shares and Broker
Option Shares (including all relevant provisions of MAR, FSMA and
the Financial Services Act 2012 in respect of anything done in,
from or otherwise involving the United
Kingdom);
27 if it is a financial
intermediary, as that term is used in Article 3(2) of the
Prospectus Directive (including any relevant implementing measure
in any member state), the Placing Shares (or Broker Option Shares,
as the case may be) acquired by it in the Placing will not be
acquired on a non-discretionary basis on behalf of, nor will they
be acquired with a view to their offer or resale to, persons in a
member state of the EEA which has implemented the Prospectus
Directive other than qualified investors, or in circumstances in
which the express prior written consent of the Relevant Joint
Bookrunner has been given to the offer or resale.
28 it has not offered or sold and
will not offer or sell any Placing Shares or Broker Option Shares
to persons in the European Economic Area prior to Admission except
to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or
agent) for the purpose of their business or otherwise in
circumstances which have not resulted and which will not result in
an offer to the public in any member state of the EEA;
29 if it has received any
confidential price sensitive information about the Company in
advance of the Placing, it has not: (a) dealt in the securities of
the Company; (b) encouraged or required another person to deal in
the securities of the Company; or (c) disclosed such information to
any person, prior to the information being made publicly
available;
30 none of the Brokers, the
Company nor any of their respective affiliates, or their or their
respective affiliates' agents, directors, officers or employees,
respectively, nor any person acting on behalf of such persons is
making any recommendation to it, advising it regarding the
suitability of any transaction it may enter into in connection with
the Placing nor providing advice in relation to the Placing nor in
respect of any representation, warranty, acknowledgement,
agreement, undertaking or indemnity contained in the Agency
Agreement nor the exercise or performance of any of the Brokers'
rights and obligations thereunder including any rights to waive or
vary any conditions or exercise any termination right;
31 acknowledges and accepts that
the Brokers may, in accordance with applicable legal and regulatory
provisions, engage in transactions in relation to the Placing
Shares, Broker Option Shares and/or related instruments for their
own account for the purpose of hedging their underwriting exposure
or otherwise and, except as required by applicable law or
regulation, the Brokers will not make any public disclosure in
relation to such transactions;
32 it has complied with its
obligations in connection with money laundering and terrorist
financing under the Proceeds of Crime Act 2002, the Criminal
Justice Act 1993, the Terrorism Act 2000, the Terrorism Act 2006
and the Money Laundering Regulations 2007 and any related or
similar rules, regulations or guidelines issued, administered or
enforced by any government agency having jurisdiction in respect
thereof (together the "Regulations") and, if making payment
on behalf of a third party, that satisfactory evidence has been
obtained and recorded by it to verify the identity of the third
party as required by the Regulations and has obtained all
governmental and other consents (if any) which may be required for
the purpose of, or as a consequence of, such purchase, and it will
provide promptly to the Brokers such evidence, if any, as to the
identity or location or legal status of any person which the B
Brokers may request from it in connection with the Placing (for the
purpose of complying with such regulations or ascertaining the
nationality of any person or the jurisdiction(s) to which any
person is subject or otherwise) in the form and manner requested by
the Brokers on the basis that any failure by it to do so may result
in the number of Placing Shares that are to be purchased by it or
at its direction pursuant to the Placing being reduced to such
number, or to nil, as the Brokers may decide at their sole
discretion;
33 if within a reasonable time
after a request for verification of identity the Brokers have not
received such satisfactory evidence, the Brokers may, in their
absolute discretion, reject an application for Placing Shares in
which event all funds delivered by such Placee to the Brokers (if
any) will be returned without interest to the account of the drawee
bank from which they were originally debited;
34 its commitment to acquire
Placing Shares (and/or Broker Option Shares, as the case may be) on
the terms set out in this Announcement will continue
notwithstanding any amendment that may in future be made to the
terms and conditions of the Placing and that Placees will have no
right to be consulted or require that their consent be obtained
with respect to the Company's or the Brokers' conduct of the
Placing;
35 the Company,
the Brokers and others will rely upon the truth and accuracy of the
foregoing representations, warranties, acknowledgements and
agreements, which are given to each Broker on its own behalf and on
behalf of the Company and are irrevocable;
36 if it is
acquiring the Placing Shares (or Broker Option Shares, as the case
may be) as a fiduciary or agent for one or more investor accounts,
it has full power and authority to make, and does make, the
foregoing representations, warranties, acknowledgements, agreements
and undertakings on behalf of each such accounts;
37 time is of the essence as
regards its obligations under this Appendix;
38 any document that is to be sent
to it in connection with the Placing will be sent at its risk and
may be sent to it at any address provided by it to the Relevant
Broker;
39 the Placing Shares (or Broker
Option Shares, as the case may be) will be issued subject to the
terms and conditions set out in this Appendix and any applicable
Subscription Agreement;
40 the Placee
has consented to receive information in respect of securities of
the Company and other price-affected securities (as defined in
FSMA) which makes it an "insider" for the purposes of Part V of
FSMA, and it agrees not to deal in any securities of the Company
until such time as the inside information (as defined in FSMA) of
which it has been made aware has been made public for purposes of
FSMA or it has been notified by the Brokers or the Company that the
proposed Placing will not proceed and any unpublished price
sensitive information of which the Placee is aware has been
publicly announced, and, other than in respect of its knowledge of
the proposed Placing and the draft Announcement, it has neither
received nor relied on any confidential price sensitive information
concerning the Company or the Placing Shares;
42 where the
Placee is acquiring Placing Shares for one or more managed
accounts, represents and warrants that it is authorised in writing
by each managed account: (a) to acquire the Placing Shares for each
managed account; (b) to make on its behalf the representations,
warranties, acknowledgments, undertakings and agreements in this
Announcement (including the Appendix); and (c) to receive on its
behalf any investment letter relating to the Placing in the form
provided to it by the Relevant Broker;
43 in agreeing
to subscribe for the Placing Shares the Placee is acting as
principal and for no other person and its acceptance of that
commitment will not give any other person a contractual right to
require the issue by the Company of any of the Placing
Shares;
44 the Placee
agrees to be bound by the terms of the articles of incorporation
and by-laws of the Company in force immediately after Admission;
and
45 this Appendix
and all documents into which this Appendix is incorporated by
reference or otherwise validly forms a part will be governed by and
construed in accordance with English law. All agreements to acquire
shares pursuant to the Placing will be governed by English law and
the English courts shall have exclusive jurisdiction in relation
thereto except that proceedings may be taken by the Company or the
Brokers in any jurisdiction in which the relevant Placee is
incorporated or in which any of its securities have a quotation on
a recognised stock exchange.
By participating in the Placing, each Placee (and any person
acting on such Placee's behalf) agrees to indemnify and hold the
Company, the Brokers and each of their respective affiliates and
each of their and their respective affiliates' agents, directors,
officers and employees, respectively, harmless from any and all
costs, claims, liabilities and expenses (including legal fees and
expenses) arising out of or in connection with any breach of the
representations, warranties, acknowledgements, agreements and
undertakings given by the Placee in this Appendix and further
agrees that the provisions of this Appendix shall survive after
completion of the Placing.
The agreement to allot and issue Placing Shares (or Broker
Option Shares, as the case may be) to Placees (or the persons for
whom Placees are contracting as agent) free of stamp duty and stamp
duty reserve tax in the UK relates only to their allotment and
issue to Placees, or such persons as they nominate as their agents,
directly by the Company. Such agreement assumes that the Placing
Shares (or Broker Option Shares, as the case may be) are not being
acquired in connection with arrangements to issue depositary
receipts or to transfer the Placing Shares (or Broker Option
Shares) into a clearance service. If there were any such
arrangements, or the settlement related to other dealings in the
Placing Shares or Broker Option Shares, stamp duty or stamp duty
reserve tax may be payable, for which neither the Company nor the
Brokers shall be responsible. If this is the case, Placees should
take their own independent advice and they shall notify the
Relevant Broker accordingly. In addition, Placees should note that
they will be liable for any capital duty, stamp duty and all other
stamp, issue, securities, transfer, registration, documentary or
other duties or taxes (including any interest, fines or penalties
relating thereto) payable outside the UK by them or any other
person on the acquisition by them of any Placing Shares, Broker
Option Shares or the agreement by them to acquire any Placing
Shares or Broker Option Shares and each Placee, or the Placee's
nominee, in respect of whom (or in respect of the person for whom
it is participating in the Placing as an agent or nominee) the
allocation, allotment, issue or delivery of Placing Shares and/or
Broker Option Shares has given rise to such non-UK stamp,
registration, documentary, transfer or similar taxes or duties
undertakes to pay such taxes and duties, including any interest and
penalties (if applicable), forthwith and to indemnify on an
after-tax basis and to hold harmless the Company and the Brokers in
the event that either the Company and/or any Broker have incurred
any such liability to such taxes or duties.
The representations, warranties, acknowledgements and
undertakings contained in this Appendix are given to each Broker
for itself and on behalf of the Company and are irrevocable.
Numis is authorised and regulated by the Financial Conduct
Authority in the United Kingdom
and is acting exclusively for the Company and no one else in
connection with the Placing and Admission and will not regard any
other person (whether or not a recipient of this document) as a
client in relation to the Placing and will not be responsible to
anyone (including Placees) other than the Company for providing the
protections afforded to its clients or for providing advice in
relation to the Placing or other matters referred to in this
Announcement.
H&P is authorised and regulated by the Financial Conduct
Authority in the United Kingdom
and is acting exclusively for the Company and no one else in
connection with the Placing and Admission and will not regard any
other person (whether or not a recipient of this document) as a
client in relation to the Placing and will not be responsible to
anyone (including Placees) other than the Company for providing the
protections afforded to its clients or for providing advice in
relation to the Placing or other matters referred to in this
Announcement.
Sprott Capital Partners, a division of Sprott Private Wealth LP
is a member of the Investment Industry Regulation Organization of
Canada (IIROC) and a member of the
Canadian Investor Protection Fund (CIPF) and is acting exclusively
for the Company and will not regard any other person (whether or
not a recipient of this document) as a client in relation to the
Placing and will not be responsible to anyone (including Placees)
other than the Company for providing the protections afforded to
its clients or for providing advice in relation to the Placing or
other matters referred to in this Announcement.
Each Placee and any person acting on behalf of the Placee
acknowledges that none of the Brokers owes any fiduciary or other
duties to any Placee in respect of any representations, warranties,
undertakings, acknowledgements or agreements or indemnities in the
Agency Agreement.
Each Placee and any person acting on behalf of the Placee
acknowledges and agrees that each Broker may (at its absolute
discretion) satisfy its obligations to procure Placees by itself
agreeing to become a Placee in respect of some or all of the
Placing Shares and/or Broker Option Shares or by nominating any
connected or associated person to do so.
When a Placee or any person acting on behalf of the Placee is
dealing with Numis, any money held in an account with Numis on
behalf of the Placee and/or any person acting on behalf of the
Placee will not be treated as client money within the meaning of
the relevant rules and regulations of the Financial Conduct
Authority which therefore will not require Numis to segregate such
money, as that money will be held by it under a banking
relationship and not as trustee.
The price of shares and any income expected from them may go
down as well as up and investors may not get back the full amount
invested upon disposal of the shares. Past performance is no guide
to future performance and persons needing advice should consult an
independent financial adviser.
All times and dates in this Announcement may be subject to
amendment. The Brokers will notify Placees and any persons acting
on behalf of the Placees of any changes.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
Definitions
In this Announcement (including the Appendix), save where the
context requires otherwise:
Acquired
Entities
|
MNG Gold Burkina
SARL, Cayman Burkina Mines Limited, MNG Gold Exploration Limited,
AAA Exploration Burkina Limited and Jersey Netiana Mining Limited
and the Subsidiaries
|
|
|
Acquisition
|
means the proposed
acquisition by the Company (or its nominee) of the Acquired
Entities from Avesoro Jersey pursuant to the terms of the
Acquisition Agreement
|
|
|
Acquisition Agreement
|
the agreement dated
30 October 2017 between Avesoro Jersey Limited and the Company
relating to the sale and purchase of the Acquired
Entities
|
|
|
Acquisition Resolution
|
the ordinary
resolution to be proposed to the minority shareholders at the
Special Meeting approving the Acquisition
|
|
|
Admission
|
the admission of the
Placing Shares, the Consideration Shares and/or the Broker Option
Shares (as the context requires) to trading on AIM becoming
effective in accordance with the AIM Rules
|
|
|
Agency
Agreement
|
the agreement between
the Company and the Brokers dated 30 October 2017 pursuant to which
the Brokers agree to procure subscribers for the Placing Shares and
the Broker Option Shares
|
|
|
AIM
|
AIM, a market
operated by the LSE
|
|
|
AIM
Rules
|
the AIM Rules for
Companies and the AIM Rules for Nominated Advisers published by the
LSE from time to time
|
|
|
AIM Rules for
Companies
|
the AIM Rules for
Companies as published by the LSE from time to time including the
AIM Note for Mining and Oil and Gas Companies
|
|
|
AIM Rules for
Nominated
Advisers
|
the AIM Rules for
Nominated Advisers as published by the LSE from time to
time
|
|
|
Assets
|
the Youga Gold Mine
and the Balogo Gold Mine
|
|
|
Avesoro Holdings
Group
|
Avesoro Holdings
Limited and its subsidiaries
|
|
|
Avesoro
Jersey
|
Avesoro Jersey Ltd, a
company incorporated and registered in Jersey
|
|
|
Balogo Gold
Mine
or Balogo Businesses
|
the mine site and
exploration sites 160 km North West of the Youga Gold Mine owned
and operated by MNG Gold Burkina SARL, Jersey Netiana Mining
Limited and Netiana Mining Company
|
|
|
Board
|
the board of
directors of the Company from time to time
|
|
|
Brokers
|
each of the Joint
Bookrunners and Sprott and "Relevant Broker" shall
mean any one of them, as the context requires
|
|
|
Broker Option
Shares
|
up to 99,681,021
Common Shares to be issued upon exercise of the Broker
Option
|
|
|
Closing
|
completion of the
Acquisition pursuant to the terms of the Acquisition
Agreement
|
|
|
Common
Shares
|
common shares of no
par value in the capital of the Company
|
|
|
Company or
Avesoro
Resources Inc
|
Avesoro Resources
Inc., a company incorporated and registered in Canada on February
1, 2011 pursuant to the CBCA
|
|
|
Consideration
Shares
|
2,033,492,822 Common
Shares to be issued by the Company to Avesoro Jersey at the Placing
Price at Closing pursuant to the Acquisition Agreement
|
|
|
CREST
|
the computerised
settlement system (being the relevant system as defined in the
CREST Regulations) to facilitate the transfer of title of shares in
uncertificated form operated by Euroclear
|
|
|
CREST
Regulations
|
the Uncertificated
Securities Regulations 2001 (SI 2001/3755), as amended
|
|
|
Enlarged Share
Capital
|
the issued share
capital of the Company immediately following Admission as enlarged
by the Placing Shares, the Broker Option Shares and the
Consideration Shares
|
|
|
Euroclear
|
Euroclear UK &
Ireland Limited
|
|
|
FSMA
|
the Financial
Services and Markets Act 2000 of the United Kingdom, as amended or
supplemented from time to time
|
|
|
Independent
Committee
|
a committee of the
Board, consisting of Mr David Netherway, Mr Jean-Guy Martin and Mr
Loudon Owen, formed in July 2017 for the purposes of the
Acquisition
|
|
|
Joint
Bookrunners
|
Numis and H&P and
"Joint Bookrunner" or "Relevant Joint Bookrunner"
shall mean any one of them, as the context requires
|
|
|
LSE
|
London Stock Exchange
plc
|
|
|
MAR
|
Regulation (EU) No.
596/2014 on market abuse and any delegated or implementing
regulations made thereunder (each as amended from time to
time)
|
|
|
MI
61-101
|
Multilateral
Instrument 61-101 – Protection of Minority Security Holders in
Special Transactions
|
|
|
NI
43-101
|
Canadian Securities
Administrators National Instrument 43-101
|
|
|
Ouaré
|
the Ouaré project,
located 45 km east of the Youga Gold Mine and comprised of four
Exploration Permits (Bitou 2, Bitou Sud, Bitou Nord and Bitou Est),
owned by Burkina Mining Company S.A.
|
|
|
Placees
|
any person that has
agreed to subscribe for Placing Shares and/or Broker Option
Shares
|
|
|
Placing
|
the conditional
placing of the Placing Shares and/or Broker Option Shares by the
Brokers at the Placing Price pursuant to the Agency
Agreement
|
|
|
Placing
Price
|
1.9 pence being the
price at which the Placing Shares and the Broker Option Shares are
offered pursuant to the Placing
|
|
|
Placing
Shares
|
new Common Shares
(other than the Broker Option Shares) to be issued by the Company
pursuant to the Placing
|
|
|
Regulation
S
|
Regulation S
promulgated under the US Securities Act
|
|
|
Resolutions
|
the resolutions to be
proposed at the Special Meeting to approve the Acquisition and the
Share Consolidation, each a Resolution,
|
|
|
Share
Consolidation
|
the proposed share
consolidation (or reverse stock split) of the issued and
outstanding Common Shares at a share consolidation ratio of one
post-consolidation Common Share for every hundred pre-consolidation
Common Shares
|
|
|
Special
Meeting
|
the special meeting
of the common shareholders of the Company to be held at the offices
of Pillsbury Winthrop Shaw Pittman LLP, Tower 42, Level 21, 25 Old
Broad Street, London, EC2N 1HQ, United Kingdom, on or about
14December 2017
|
|
|
Subsidiaries
|
Burkina Mining
Company S.A., ER Burkina Exploration SARL, Etruscan Resources
Burkina Faso S.A. and Netiana Mining Company S.A.
|
|
|
TSX
|
the Toronto Stock
Exchange
|
|
|
United Kingdom or
UK
|
the United Kingdom of
Great Britain and Northern Ireland
|
|
|
US
|
the United States of
America, its territories and possessions, any State of America and
the District of Columbia
|
|
|
US Securities
Act
|
United States
Securities Act of 1933, as amended
|
|
|
Youga Gold Mine
or
Youga Businesses
|
the gold processing
plant and camp facility, mine, exploration properties and
surrounding stockpiles in the Youga area of southern Burkina Faso
owned and operated by Cayman Burkina Mines Ltd, MNG Gold
Exploration Ltd, Burkina Mining Company S.A., ER Burkina
Exploration SARL and Etruscan Resources Burkina Faso
S.A.
|
|
|
Glossary of Technical Terms
Au
|
Chemical symbol for
gold
|
|
|
Cut-off
Grade
|
The lowest grade
value that is included in a resource statement
|
|
|
CIM
|
Canadian Institute of
Mining, Metallurgy and Petroleum
|
|
|
Diamond
Drilling
|
Drilling method which
obtains a cylindrical core of rock by drilling with an annular bit
impregnated with diamonds
|
|
|
Grade
|
The proportion of a
mineral within a rock or other material. For gold mineralisation
this is usually reported as grams of gold per tonne of rock
(g/t)
|
|
|
g/t
|
Grammes per
tonne
|
|
|
Indicated
Mineral
Resource
|
That part of a
mineral resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a
reasonable level of confidence. It is based on exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are too widely or
inappropriately spaced to confirm geological and/or grade
continuity but are spaced closely enough for continuity to be
assumed
|
|
|
Inferred
Mineral
Resource
|
That part of a
mineral resource for which tonnage, grade and mineral content can
be estimated with a low level of confidence. It is inferred from
geological evidence and assumed but not verified geological and/or
grade continuity. It is based on information gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes that may be limited, or of uncertain
quality and reliability
|
|
|
koz
|
Thousand troy
ounces
|
|
|
km
|
Kilometre
|
|
|
km2
|
Square
Kilometres
|
|
|
kt
|
Thousand tonnes
(1,000 tonnes)
|
|
|
Life of
Mine
|
The time in which,
through the employment of the available capital, the mineral
reserves--or such reasonable extension of the mineral reserves as
conservative geological analysis may justify--will be
extracted.
|
|
|
m
|
metre
|
|
|
Mill
|
Equipment used to
grind crushed rocks to the desired size for mineral
extraction
|
|
|
Mineral
Resource
|
A concentration or
occurrence of material of economic interest in or on the Earth's
crust in such a form, quality, and quantity that there are
reasonable and realistic prospects for eventual economic
extraction. The location, quantity, grade, continuity and other
geological characteristics of a Mineral Resource are known,
estimated from specific geological knowledge, or interpreted from a
well constrained and portrayed geological model
|
|
|
Mineral
Reserves
|
The economically
mineable part of a Measured or Indicated Mineral Resource
demonstrated by at least a Preliminary Feasibility Study. This
Study must include adequate information on mining, processing,
metallurgical, economic and other relevant factors that
demonstrate, at the time of reporting, that economic extraction can
be justified. A Mineral Reserve includes diluting materials and
allowances for losses that may occur when the material is
mined
|
|
|
Measured
Resource
|
That part of a
Mineral Resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a
high level of confidence. It is based on detailed and
reliable exploration, sampling and testing information gathered
through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes. The locations are
spaced closely enough to confirm geological and grade
continuity
|
|
|
Modifying
Factor
|
Considerations made
when converting mineral resources to mineral reserves. Includes
mining, processing, infrastructure and environmental
factors
|
|
|
Moz
|
Million troy
ounces
|
|
|
Mt
|
Million
tonnes
|
|
|
NPV
|
Net Present Value is
a standard method in finance of capital budgeting-the planning of
long-term investments; using the NPV method a potential investment
project should be undertaken if the present value of all cash
inflows minus the present value of all cash outflows (which equals
the net present value) is greater than zero
|
|
|
Open
Pit
|
A surface
mine
|
|
|
Orebody
|
Mining term to define
a solid mass of mineralised rock which can be mined profitably under
current or immediately foreseeable economic conditions "ore" a
mineral deposit that can be extracted and marketed
profitably
|
|
|
Ounce /
oz
|
Troy ounce,
equivalent to 31.103477 grams
|
|
|
Probable
Mineral
Reserve
|
The economically
mineable part of an Indicated and, in some circumstances, a
Measured Mineral Resource demonstrated by at least a Preliminary
Feasibility Study. This Study must include adequate information on
mining, processing, metallurgical, economic, and other relevant
factors that demonstrate, at the time of reporting, that economic
extraction can be justified
|
|
|
Proven Mineral
Reserve
|
The economically
mineable part of a Measured Mineral Resource demonstrated by at
least a Preliminary Feasibility Study. This Study must include
adequate information on mining, processing, metallurgical,
economic, and other relevant factors that demonstrate, at the time
of reporting, that economic extraction is justified
|
|
|
Recovery
|
The proportion of
valuable material obtained in the processing of an ore, stated as a
percentage of the material recovered compared with the total
material present
|
|
|
Run of
Mine
|
Ore mined and
delivered to the processing plant
|
|
|
t
|
Tonne (1 million
grams)
|
|
|
SOURCE Avesoro Resources Inc.