For immediate
release 23
January 2018
Serabi Gold plc("Serabi" or the
"Company")Increase in debt facility with Sprott Resource
Lending Partnership ("Sprott")
Serabi Gold plc (AIM:SRB, TSX:SBI), the
Brazilian-focused gold mining and development company, is pleased
to report that following its acquisition of Chapleau Resources Ltd
("Chapleau"), and its 370,000 ounce Coringa gold project
("Coringa") on 21 December 2017 (the "Acquisition"),
Serabi has now arranged an additional US$3 million secured loan
(the "New Facility") with its existing lender, Sprott.
The funds will be used to provide increased
working capital for the Company and in particular to replace funds
it used to make the initial US$5 million cash payment upon
completion of the Acquisition.
The Company had an existing US$5 million loan
(the "Existing Facility") from Sprott repayable in 24
monthly instalments with a final repayment date of 31 December
2019. As part of the revised borrowing arrangements, the term
for the Existing Facility has been extended to 30 June 2020 and is
now repayable in 30 equal monthly instalments. The New
Facility may be repaid, at the Company's request and with the
agreement of Sprott (the "Extension Option") in equal
monthly instalments commencing 30 September 2018 with a final
payment due 22 months later on 30 June 2020. If the Extension
Option is not exercised the New Facility must be repaid in full on
30 September 2018. Notwithstanding the above, both the New
Facility and the Existing Facility may be repaid by Serabi in full
without penalty at any time.
Sprott will receive a total fee, for the New
Facility and the revision to the terms of the Existing Facility, of
US$90,000, which is being settled through the issue of 2,141,798
new ordinary shares of Serabi ("New Ordinary Shares").
The New Ordinary Shares will rank pari-passu with the existing
ordinary shares of the Company in issue and applications have been
made to both the TSX and AIM for the New Ordinary Shares to be
admitted to trading. If the Extension Option is exercised,
Sprott will be entitled to receive a further fee of US$90,000,
payable in additional new ordinary shares, based on the prevailing
share price and exchange rates at that time. The Existing
Facility was, and continues to be, secured against the assets of
the Company, including the shares of its subsidiary companies at
that time. These assets are now also security for the New Facility
and the shares of Chapleau acquired on completion of the
Acquisition have now also been pledged to Sprott as security for
both the Existing Facility and the New Facility.
Following completion of the New Facility the
Company now has aggregate loans with Sprott of US$8 million which
carry an interest rate of 10 per cent per annum.
Michael Hodgson, CEO of Serabi
commented.
"The Company took out its first debt
financing with Sprott back in September 2014 and during this time
has established an excellent working relationship with them.
Over this period Sprott have shown great flexibility and have been
a strong contributor to Serabi's current success and platform from
which we now hope to build further growth. As a lender they
continue to grow and we are very pleased to have their on-going
support and for the belief they have in the continuing ability of
Serabi and its management to deliver strong operational performance
and growth.
"The Company is continuing the work started
by Anfield on the permitting and licencing process for Coringa and
reviewing the cost estimates contained in the Coringa Feasibility
Study and optimising these and looking at options to enhance the
economics of the project. We are also evaluating our options for
the longer term development finance requirements of the Coringa
project and the Company's existing organic growth prospects.
This New Facility in the meantime allows us to continue with all
our current programmes and plans."
Dušan Petkovic, Principal at Sprott
commented.
"As one of the largest investors dedicated to the natural
resource sector, Sprott is excited to continue its partnership with
Serabi. Our partnership with the Serabi team is consistent with our
strategy of supporting exceptional management teams with innovative
and flexible capital."
The 2,141,798 New Ordinary Shares, which have
been issued at a price of 3.0375 pence per New Ordinary Share, are
expected to be admitted to trading on AIM on 26 January 2018.
Total Voting Rights
Following the issue of the New Ordinary Shares,
the Company's issued share capital will consist of 700,843,570
Ordinary Shares, with voting rights. This figure may be used by
shareholders in the Company as the denominator for the calculation
by which they will determine if they are required to notify their
interest in, or a change to their interest in, the share capital of
the Company under the Financial Conduct Authority's Disclosure
Guidance and Transparency Rules and pursuant to Regulation 23 of
the Company's articles of association. The Company does not
hold any Ordinary Shares in treasury.
Enquiries:
Serabi Gold plc Michael
Hodgson
Tel: +44 (0)20 7246 6830Chief Executive
Mobile: +44 (0)7799 473621Clive
Line
Tel: +44 (0)20 7246 6830Finance
Director
Mobile: +44 (0)7710 151692 Email: contact@serabigold.com
Website: www.serabigold.com
Beaumont Cornish LimitedNominated
Adviser and Financial
Adviser
Roland Cornish
Tel: +44 (0)20 7628 3396Michael
Cornish
Tel: +44 (0)20 7628 3396
Peel Hunt LLPUK
Broker
Ross Allister
Tel: +44 (0)20 7418 9000Chris Burrows
Tel: +44 (0)20 7418 9000
Blytheweigh Public
Relations
Tim
Blythe
Tel: +44 (0)20 7138 3204Camilla Horsfall
Tel: +44 (0)20 7138 3224
Copies of this announcement are available from
the Company's website at www.serabigold.com.
Neither the Toronto Stock Exchange, nor any
other securities regulatory authority, has approved or disapproved
of the contents of this announcement.
This announcement is inside information for the
purposes of Article 7 of Regulation 596/2014. The person who
arranged for the release of this announcement on behalf of the
Company was Clive Line, Director
Qualified Persons StatementThe scientific
and technical information contained within this announcement has
been reviewed and approved by Michael Hodgson, a Director of the
Company. Mr Hodgson is an Economic Geologist by training with over
30 years' experience in the mining industry. He holds a BSc (Hons)
Geology, University of London, a MSc Mining Geology, University of
Leicester and is a Fellow of the Institute of Materials, Minerals
and Mining and a Chartered Engineer of the Engineering Council of
UK, recognising him as both a Qualified Person for the purposes of
Canadian National Instrument 43-101 and by the AIM Guidance Note on
Mining and Oil & Gas Companies dated June 2009.
Forward Looking StatementsCertain
statements in this announcement are, or may be deemed to be,
forward looking statements. Forward looking statements are
identified by their use of terms and phrases such as ''believe'',
''could'', "should" ''envisage'', ''estimate'', ''intend'',
''may'', ''plan'', ''will'' or the negative of those, variations or
comparable expressions, including references to assumptions. These
forward looking statements are not based on historical facts but
rather on the Directors' current expectations and assumptions
regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the
amount, nature and sources of funding thereof), competitive
advantages, business prospects and opportunities. Such forward
looking statements reflect the Directors' current beliefs and
assumptions and are based on information currently available to the
Directors. A number of factors could cause actual results to differ
materially from the results discussed in the forward looking
statements including risks associated with vulnerability to general
economic and business conditions, competition, environmental and
other regulatory changes, actions by governmental authorities, the
availability of capital markets, reliance on key personnel,
uninsured and underinsured losses and other factors, many of which
are beyond the control of the Company. Although any forward looking
statements contained in this announcement are based upon what the
Directors believe to be reasonable assumptions, the Company cannot
assure investors that actual results will be consistent with such
forward looking statements.
ENDS
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