TIDMHMB
Hambledon Mining plc ("Hambledon" or the "Company")
Investment by EBRD and Change of Directorate
22 February 2012
Further to the announcement made on 27 January 2012 and the
circular to shareholders dated 1 February 2012, Hambledon is
pleased to announce that the European Bank for Reconstruction and
Development ("EBRD") and the Company have agreed terms for the
provision by EBRD of a secured loan facility of US$15 million (the
"Loan Agreement"), a US$3 million equity investment in the Company
and the issue to EBRD of warrants over 30 million Shares, in each
case for Hambledon to develop the Sekisovskoye, Kazakhstan
underground mining operation. This agreement follows the approval
by the EBRD board of directors earlier this month.
Loan Agreement
Under the terms of the Loan Agreement entered into on 21
February 2012 between two of the Company's subsidiaries, Altai
Ken-Bayitu LLP ("AKB") and Sekisovskoye LLP ("Seki"), and EBRD,
EBRD has conditionally agreed to lend US$15 million in two tranches
to AKB and Seki, on a joint and several basis, repayable in
quarterly instalments between 10 January 2015 and 10 October 2017.
Interest on drawn amounts will be charged at a rate of three months
LIBOR plus seven per cent. per annum. The loan ceases to be
available for draw down on 21 February 2014.
Under the Loan Agreement, AKB and Seki have each given certain
representations, warranties and covenants to EBRD and the Loan
Agreement contains certain events of default that could enable EBRD
to require repayment prior to the stated maturity date.
AKB and Seki will work towards satisfying the conditions
precedent to the Loan Agreement and the Company estimates that this
will be achieved within approximately four weeks from the date of
that agreement, after which the first tranche of funds, being US$10
million, made available under the Loan Agreement may be utilised.
The availability of the second tranche is subject to certain
production targets being met.
Subscription Agreement
Under the terms of the Subscription Agreement entered into on 21
February 2012 between the Company and EBRD, EBRD has conditionally
agreed to subscribe for 58,794,708 Shares at a price 3.25 pence per
Share (that price equalling the Placing Price per Share under the
Placing announced on 1 February 2012). The aggregate subscription
monies to be paid by EBRD for such Shares will be approximately
GBP1.91 million (approximately US$3.00 million).
Under the Subscription Agreement, the Company has given certain
representations, warranties and covenants to EBRD. The Subscription
Agreement gives EBRD the right to nominate a director to the Board
for so long as it holds Shares (and, before such time, whilst it
has the right to subscribe for Shares or exercise Warrants).
The Company will now work towards satisfying the conditions
precedent to the Subscription Agreement and estimates that this
will be achieved within approximately 14 days following the date of
that agreement, after which it must then give not less than 15
days' notice to the EBRD to make its equity investment.
Warrant Instrument
Pursuant to the Warrant Instrument, EBRD has been issued with
non-transferrable warrants over 30 million Shares.
The Warrants are exercisable at any time before the earlier of
(i) 21 February 2014 and (ii) if the closing price per Share
exceeds 6.5325 pence for a period of 20 consecutive trading days
during that two year period, 45 days from the date on which the
Company notifies EBRD that this condition has been met. In either
case, any Warrants not exercised within the relevant period will
lapse. The Warrants are exercisable in whole or in tranches of no
less than 5,000,000 Warrants (or, if less, the amount of Warrants
unexercised as at the relevant date).
The exercise price of the Warrants is 4.875 pence per Share
(representing a 50 per cent. premium to the Placing Price).
If the Warrants are exercised in full approximately GBP1.5
million (approximately US$2.30 million) will be raised by the
Company.
Total interests in Shares
On the assumption that (i) only the Shares under the
Subscription Agreement are issued to EBRD and (ii) no further
Shares are issued before that date, EBRD will hold 58,794,708
Shares representing approximately 6.00 per cent. of the then issued
share capital of the Company.
On the assumption that (i) the Shares under the Subscription
Agreement are issued to EBRD and continue to be held by EBRD, (ii)
the Warrants are exercised in full and (iii) no further Shares are
issued before that date, EBRD will hold 88,794,708 Shares
representing approximately 8.79 per cent. of the then issued share
capital of the Company.
Change of Directorate
In view of the impending appointment to the Board of a director
nominated by EBRD, Dr Jeff O'Leary is taking this opportunity to
resign his position on the Board of the Company. Tim Daffern, CEO
of Hambledon, made the following comment "Jeff has ably assisted
the Company since his appointment, especially with its resources
and resource statement. The Company is extremely grateful for
Jeff's guidance and support and wishes him well in the future."
Enquiries:
Hambledon Mining plc:
Telephone +44 (0)20 7233 1462
Charles Zorab
Fairfax I.S. PLC (Nominated adviser and broker):
Telephone +44 (0)20 7598 5368
Ewan Leggat/Katy Birkin
Tavistock Communications:
Telephone +44 (0)20 7920 3150
Ed Portman/Jos Simson
DEFINITIONS
"Directors"or"Board" the directors of the Company;
"EBRD" European Bank for Reconstruction
and Development;
"Kazakhstan" the Republic of Kazakhstan;
"Placing" the placing of 177,507,699
Shares (as summarised
in the circular to Shareholders
dated 1 February 2012) which completed
on 20 February 2012;
"Placing Price" means 3.25 pence per Share
(being the price at
which Shares were issued
under the Placing);
"Shareholder" a person recorded as a holder of Shares
in the Company's register of members;
"Shares" ordinary shares of 0.1p each in
the capital of the Company;
"Subscription Agreement" the agreement entered into
on 21 February 2012
between (i) the Company and (2) EBRD
under which EBRD conditionally agreed
to subscribe for 58,794,708 Shares;
"Warrant Instrument" the deed poll entered into
by the Company on 21
February 2012 constituting
the Warrants; and
"Warrants" the non-transferrable warrants to subscribe
for up to 30,000,000 new
Shares issued to EBRD under the terms
of the Warrant Instrument.
The following exchange rate has been used in this announcement:
GBP1:$1.57.
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