Highlights:
-- Strategic alliance and financing with Highland Park raises an initial
$32.5 million, with $37.8 million further investment potential.
Significantly adds to Keegan's existing $186 million treasury.
-- Appointment of experienced mine builders: Mr. Peter Breese as President
and Chief Executive Officer ("CEO") and Mr. Tony Devlin as Chief
Operating Officer ("COO"). Mr. Breese and Mr. Devlin's extensive record
of mine development in Africa significantly de-risks the successful
construction and operation of an efficient modern gold mine.
Keegan Resources Inc. (TSX:KGN)(NYSE MKT:KGN)(NYSE Amex:KGN)
("Keegan" or the "Company") is pleased to announce that it has
arranged a private placement with Highland Park S.A. ("Highland
Park") of Johannesburg, South Africa and some other investors.
Highland Park will become a major strategic investor in the Company
but is not expected to materially affect control. The placement
will involve an equity issue of a targeted 9,443,500 Units at
C$3.44 per Unit, the five-day volume weighted average market price
based on the date of signing of the principle subscription
agreement, resulting in a targeted total of $32.5 million raised.
The placement will further enhance the Company's already strong
financial position and will provide access to Highland Park's
substantial resource management skills. The funds from the
placement will enable Keegan to fast track the Company's flagship
Esaase gold project in Ghana and emerge as a significant gold
producer.
The key investors in Highland Park include the original founders
and former executives of Toronto based LionOre Mining International
Limited ("LionOre"). LionOre was acquired in 2007 for US$6.3
billion by Norilsk Nickel. Highland Park was also involved in the
development and strategic direction of Mantra Resources into a
leading uranium explorer and developer prior to its acquisition by
ARMZ Uranium Holding Co. in 2011.
In conjunction with the Highland Park investment, Keegan is
pleased to announce the appointments of Mr. Peter Breese as
President and Chief Executive Officer and Mr. Tony Devlin as Chief
Operating Officer of the Company to occur concurrently with
completion of the placement. Mr. Breese will also be appointed as a
Director of Keegan. Along with Mr. Breese and Mr. Devlin comes a
multidisciplinary technical team that has the expertise necessary
to execute on all aspects of the project. The Board understands
that the appointment of a CEO and a COO with strong records of
success in project development and operations management, as well
as extensive experience in Africa, is an important and timely step
for the Company as it evolves from an explorer into a significant
near-term gold producer. Shawn Wallace, co-founder, Chairman and
acting CEO, will continue to play a key role with Keegan as
Chairman of the Board and as a Director.
The Board is very pleased to have Highland Park as a strategic
investor and has also invited Mr. Colin Steyn, previously CEO of
LionOre and currently the Chairman of Coalspur Mines, to join the
Board of Keegan upon completion of the financing. Mr. Steyn was a
Director of LionOre from 1998 and was appointed President and CEO
in 1999. Prior to this, Mr. Steyn was Executive Director in charge
of metallurgical operations in Zimbabwe for Rio Tinto. Mr. Steyn
holds an MBA from Cranfield University, UK and is currently a
Director of Mirabela Nickel and the Chairman of Coalspur Mines.
Dr. Daniel McCoy will step down from the Board on closing to
make room for these new appointments. Dr. McCoy has been integral
in the discovery and delineation of the Esaase gold project and the
Company wishes to thank him for his many contributions as a
Director. Dr. McCoy will continue with Keegan in his present role
as Chief Geologist.
Shawn Wallace, Chairman of the Board, commented: "We think that
the investment in Keegan by Highland Park, a group of very
successful and experienced mining executives known for their
meticulous approach and extensive due diligence, represents a major
endorsement of our project, our new plan and our team. I am
delighted to also welcome Peter and Tony to the Keegan team. Their
extensive African project development and operational experience
will be critical in transforming Keegan into a significant gold
producer. The value of putting in place a team that has worked
together for many years on several successful projects is
invaluable. Execution risk is currently a key issue for investors
in the mining industry and we feel that by putting this team in
place we have more than addressed this. The timing of these
appointments is ideal as we finalize a revised Pre-Feasibility
Study following our extensive re-examination of the development
options for our flagship Esaase gold project.
I would also on behalf of the entire Board like to give a
special thank you to Dr. Daniel McCoy. Dan was responsible for
assembling and guiding the technical team that discovered and
delineated the Esaase gold project and his contribution was
critical to our exploration success.
The funds raised from the placement and any subsequent warrant
exercise will add significantly to our already strong financial
position, minimizing financing risk, and will now enable us to
expedite the development of our key asset in Ghana. I believe
Keegan now stands out as one of the few development projects that
will be virtually fully financed without committing any debt
security over its property or hedging any of its future gold
production. The partnership with Highland Park will be accretive to
all shareholders. We will also gain from the demonstrated
corporate, development and operational skills and expertise of Mr.
Colin Steyn and Highland Park as we commence the transition from
explorer to significant gold producer."
Colin Steyn, on behalf of Highland Park, commented: "Our
investment follows a lengthy and exhaustive due diligence of a
number of gold opportunities in Africa by our technical team and
our decision to invest in Keegan reflects our confidence in the
quality of Keegan's Esaase gold project and its management, and
also reflects our confidence in Ghana as an investment
destination."
Peter Breese has over 25 years executive, operational and
project management experience in the global mining industry in the
base and precious metals sectors. Peter is currently a Director of
TSX listed Coalspur Mines Limited. He has held a number of senior
executive positions including CEO of Mantra Resources, CEO of
Norilsk Nickel International, COO of LionOre, as well as senior
management and board positions with Impala Platinum Holdings (South
Africa), Mimosa Mining Company (Zimbabwe), Zimasco (Zimbabwe) and
BCL (Botswana).
Tony Devlin has over 30 years executive, operational and project
management experience in Africa. Most recently Tony was Managing
Director ("MD") of Mantra Tanzania. Prior to that he was MD of
Williamson Diamonds in Tanzania and also held a number of executive
management positions with Anglo American including CEO of Zimbabwe
Alloys (Zimbabwe).
The financing will include the issuance of up to 9,443,500 Units
at C$3.44 per Unit, the five-day volume weighted average market
price based on the date of signing of the subscription agreement,
resulting in a total of $32.5 million raised. Each Unit will
consist of one Common Share of the Company as well as one Warrant
to purchase a Common Share in the Company for a period of two years
at a price of $4.00 per share. Should the Company's share price
trade at a price of greater than $6.00 per share for a period of
twenty consecutive trading days, the Company will have a right to
accelerate the exercise period of the Warrants to 30 days. Exercise
of the Warrants would raise an additional $37.8 million. The
private placement will result in Highland Park securing an initial
9.6% ownership of the Company with the Warrant providing an
opportunity to increase their ownership to 17.3% assuming no
intervening additional share issuances. Highland Park will become a
strategic partner and the single largest shareholder in Keegan. The
placement is not expected to materially affect control given the
size of the other institutional shareholdings.
There are no fees or broker warrants associated with the
financing. The financing is currently subject to TSX acceptance and
will rely on an exemption from shareholders approval requirements
under NYSE MKT rules. Insiders may purchase up to 10% of the
financing. The financing will not be registered under the
securities laws of the United States and will not be offered to US
Persons except where permitted by exemptions form US registration
requirements. All securities issued under the placement will be
subject to a 4 month resale restriction from closing under Canadian
law.
On Behalf of the Board of Directors,
Shawn Wallace, Chairman of the Board
About Keegan Resources Inc.
Keegan is a junior gold company offering investors the
opportunity to share ownership in the rapid exploration and
development of high quality pure gold assets. The Company is
focused on its wholly owned flagship Esaase gold project (3.83
million ounces of gold in the Measured and Indicated category with
an average grade of 1.73 g/t Au and 1.25 million ounces of gold in
the Inferred category at an average grade of 1.75 g/t Au, based on
a 0.8 g/t Au cut-off) located in Ghana, West Africa; a highly
favourable and prospective jurisdiction. Managed by highly skilled
and successful technical and financial professionals, Keegan is
well financed with no debt. Keegan is also strongly committed to
the highest standards for environmental management, social
responsibility, and health and safety for its employees and
neighbouring communities.
Keegan trades on the TSX and the NYSE MKT under the symbol
KGN.
More information about Keegan is available at
www.keeganresources.com.
Forward Looking and other Cautionary Information
This release includes certain statements that may be deemed
"forward-looking statements". All statements in this release, other
than statements of historical facts, that address estimated
resource quantities, grades and contained metals, possible future
mining, exploration and development activities, are forward-looking
statements. Although the Company believes the forward-looking
statements are based on reasonable assumptions, such statements
should not be in any way construed as guarantees of future
performance and actual results or developments may differ
materially from those in the forward-looking statements. Factors
that could cause actual results to differ materially from those in
forward-looking statements include market prices for metals, the
conclusions of detailed feasibility and technical analyses, lower
than expected grades and quantities of resources, mining rates and
recovery rates and the lack of availability of necessary capital,
which may not be available to the Company on terms acceptable to it
or at all. The Company is subject to the specific risks inherent in
the mining business as well as general economic and business
conditions. For more information on the Company, Investors should
review the Company's annual Form 20-F filing with the United States
Securities Commission and its home jurisdiction filings that are
available at www.sedar.com.
Neither Toronto Stock Exchange nor the Investment Industry
Regulatory Organization of Canada accepts responsibility for the
adequacy or accuracy of this release.
Contacts: Keegan Resources Inc. Shawn Wallace Chairman of the
Board 1.604.683.8193 or Toll Free: 1.800.863.8655 1.604.683.8194
(FAX)info@keeganresources.com www.keeganresources.com
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