TIDMECR
AIM: ECR
US OTC: MTGDY
ECR MINERALS plc ("ECR Minerals", "ECR" or the "Company")
PROPOSED SUBSCRIPTION BY CHINESE INVESTOR TO RAISE GBP0.55
MILLION PROPOSED ISSUE OF WARRANTS AND ISSUE OF EQUITY
LONDON: 27 FEBRUARY 2017 - The directors of ECR Minerals plc
(the "Directors") are pleased to announce that the Company has
conditionally raised gross proceeds of GBP553,564 ("Gross
Proceeds") pursuant to a subscription by the Shenyang Xinliaoan
Machinery Co Ltd ("Shenyang" or the "Investor") based in the
People's Republic of China, for 55,356,391 new ordinary shares of
the Company ("Subscription Shares") at a price of 1 pence per
Subscription Share ("Subscription Price") (the "Subscription").
Conditional on completion of the Subscription, the Investor will
also be issued warrants over 83,034,586 new ordinary shares in
total (the "Investor Warrants"). Of the Investor Warrants,
55,356,391 are exercisable at a price of 2 pence per share and
27,678,195 have an exercise price of 5 pence per share.
HIGHLIGHTS
-- Shenyang Xinliaoan Machinery Co Ltd has conditionally agreed to
subscribe for a 29.9% shareholding in ECR
-- Shenyang Subscription Shares to be subject to 12-month lock-up
-- GBP100,000 non-refundable deposit receivable from the Investor, to be
converted into ordinary shares at a price of 2p per share in the
event
the conditions of the Subscription are not satisfied by 31 March
2017
-- Proceeds to be used for drilling programmes in Australia and Argentina
and working capital including review of potential new projects
and
business areas
-- Upon completion of the Subscription, Shenyang are able to recommend up
to two directors who may be appointed as members of the ECR
board
-- Issue of shares to directors, consultants and suppliers who have opted
to take ECR shares in lieu of fees owed
Craig Brown, CEO of ECR, commented:
"We are delighted to welcome Shenyang Xinliaoan Machinery Co Ltd
as an investor in ECR. One of the principal challenges faced by
companies such as ECR is in securing investors who are prepared to
take a longer term view. We believe the fact that the Investor has
agreed to a 12-month lock up with respect to the Subscription
Shares speaks volumes in this regard, and is a real vote of
confidence in ECR and its strategy. We look forward to using part
of the net proceeds of the Subscription to press ahead with the
planned drilling programmes at the Avoca and Bailieston projects in
Australia and the SLM gold project in Argentina in due course."
Issue of shares in lieu of fees
In addition to the Subscription, the directors of ECR announce
that the Company has issued 6,673,021 new ordinary shares of 0.001
pence in the Company ("Ordinary Shares") at a price of 1 pence per
Ordinary Share (being the same price as the Subscription Price) in
lieu of salary and fees owed to certain directors, consultants and
suppliers to the Company (the "Fee Shares"). In relation to this,
2,623,750 Fee Shares have been issued to suppliers and consultants,
of which 343,750 Fee Shares have been issued to former director
Stephen Clayson in lieu of fees owed for ad hoc consultative and
administrative services. The remaining 4,049,271 Fee Shares have
been issued to directors as follows:
Director Fee Shares issued Total holding Percentage Shareholding
following following
issue issue of the Fee Shares
of the Fee
Shares
William Howell 1,500,000 1,500,000 1.10%
Ivor Jones 1,000,000 1,000,000 0.74%
Craig Brown 1,549,271 1,549,271 1.14%
The issue of Fee Shares to Craig Brown, Ivor Jones, Bill Howell
and Stephen Clayson constitutes related party transactions under
the AIM Rules for Companies, by virtue of the parties all being or
having been directors of ECR within the preceding twelve months.
Christian Dennis, non-executive director, who is independent of the
related party transactions considers, having consulted with Cairn
Financial Advisers LLP, the Company's nominated adviser, that the
terms of these related party transactions are fair and reasonable
insofar as ECR shareholders are concerned.
The issue of the Fee Shares uses the Company's existing share
authorities to allot Ordinary Shares, accordingly, application will
be made for admission of the Fee Shares to trading on AIM, which is
expected to occur on 6 March 2017 ("Admission"). Following
Admission of the Fee Shares, ECR's issued ordinary share capital
will comprise 135,899,461 Ordinary Shares. This number represents
the total voting rights in the Company and following Admission may
be used by shareholders as the denominator for the calculation by
which they can determine if they are required to notify their
interest in, or a change to their interest in, the Company under
the Financial Conduct Authority's Disclosure and Transparency
Rules. The new Ordinary Shares will rank pari passu in all respects
with the Ordinary Shares of the Company currently traded on
AIM.
Subscription Agreement and Deposit
Pursuant to a subscription agreement entered into with the
Investor ("Subscription Agreement"), the Investor has conditionally
subscribed for 55,356,391 new ordinary shares in the Company at a
price of 1 pence per Subscription Share.
Completion of the Subscription is conditional upon, amongst
other things:
a) the Investor receiving government approval and permission to
remit the Gross Proceeds to the Company;
b) receipt of the Gross Proceeds (less the Deposit amount, as
described below, where applicable) by the Company by 31 March 2017
("Receipt Date");
c) the passing of certain resolutions at a general meeting of
shareholders ("Resolutions") ("General Meeting") to provide the
Company with sufficient shareholder authorities to issue the
Subscription Shares;
d) admission of the Subscription Shares to trading on AIM
("Subscription Shares Admission");
e) the entry by the Company into the warrant instrument which is
described further below.
As noted above, receipt of the Gross Proceeds is conditional on,
amongst other things, approval from the Chinese government to remit
the Gross Proceeds to the Company. Accordingly, it has been agreed
that a non-refundable deposit of GBP100,000 in aggregate be paid to
the Company by 4 March 2017 on behalf of the Investor
("Deposit").
In the event that condition b) above is met by 31 March 2017
(and the remaining Subscription conditions are met), the Deposit
amount will be treated as a payment on account and will be deducted
from the Gross Proceeds to be received by the Company. In the event
that condition b) is not met by 31 March 2017, the amount of the
Deposit received will be converted into ordinary shares in the
Company at a price of 2 pence per share (to be issued to the
Investor (the "Deposit Shares") and ECR, at its election, may
either terminate the Subscription Agreement or extend the Receipt
Date ("Extension").
In the event of an Extension, the Investor will be required to
transmit the full amount of the Gross Proceeds to the Company in
order to complete the Subscription however, the total number of
Subscription Shares to be issued to the Investor shall be capped at
such number of ordinary shares which equates to 29.9 per cent of
the Company's issued share capital at the date of Subscription
Shares Admission. Where the initial number of Subscription Shares
to be issued is less than 55,356,391 due to this restriction, the
Company will retain any balance of the Gross Proceeds and apply it
to the issue of further Subscription Shares to the Investor at the
Subscription Price as and when the Company is able to allot and
issue such Subscription Shares without increasing the Investor's
holding above 29.9 per cent of the Company's issued share
capital.
Subject to the issue of the Subscription Shares, (but excluding
the Deposit Shares), the total number of Ordinary Shares in issue
will be 184,582,831 and the Investor will hold 29.9 per cent of the
enlarged share capital of the Company.
The Company will update the market in due course, in particular
with respect to the receipt of funds pursuant to the Subscription;
the notice of general meeting; and applications for admission to
trading on AIM of the Subscription Shares issued pursuant to the
Subscription.
Lock-up arrangements
The Subscription Shares will be subject to a lock-up for a
period of 12 months following the date of Subscription Shares
Admission. The lock-up arrangements will be subject to standard
carve outs in relation to, inter alia, transfer of the Subscription
Shares to a nominee account; and accepting (or making an
irrevocable commitment in connection with) a general offer made to
all shareholders under the City Code on Takeovers and Mergers.
Director appointment rights and pre-emption rights
Pursuant to completion of the Subscription, the Investor is able
to recommend up to two directors to be appointed to the board of
the Company. The Company will make further announcements in due
course as and when any board appointments are made.
The Investor will, from Subscription Shares Admission, be
granted certain pre-emption rights for so long as the Investor
holds over 20 per cent of the issued share capital of the
Company.
Warrant instrument
Conditional on completion of the Subscription Agreement, the
Company has agreed to enter into a warrant instrument, pursuant to
which the Investor will be issued, conditional on completion of the
Subscription, the Investor Warrants.
The Investor Warrants are to be issued in two tranches, both of
which are exerciseable for a five year period from the date of
Subscription Shares Admission of the Subscription Shares:
-- warrants over 55,356,391 ordinary shares, exercisable at a price of 2
pence per new ordinary share;
-- warrants over 27,678,195 ordinary shares, exercisable at a price of 5
pence per new ordinary share.
Investor Relationship Agreement
In the event of completion of the Subscription, the Investor
will become a 29.9 per cent shareholder in the Company.
Accordingly, the Company, the Investor and its connected parties
and Cairn Financial Advisers LLP, have agreed to enter into a
relationship agreement on completion of the Subscription, pursuant
to which the Investor, in its capacity as a substantial
shareholder, will give various undertakings to the Company to
ensure the relationship and any arrangements between the Investor,
its associates and the Company remain on an arm's length basis and
are transacted on normal commercial terms. The Relationship
Agreement will remain in force for so long as the Investor holds a
direct or indirect interest in at least 20 per cent of the
Company's issued ordinary share capital.
Use of Proceeds of the Subscription
The net proceeds of the Subscription, being approximately
GBP525,886, are expected to be used as follows:
-- to progress the Avoca and Bailieston gold projects in Victoria,
Australia;
-- to progress the SLM gold project in Argentina; and
-- for general working capital purposes to support the other activities
of the Company, including the review of potential new projects
and
business areas.
Takeover Code implications
Under Rule 9 of the Takeover Code, where any person acquires,
whether by a single transaction or a series of transactions over a
period of time, interests in securities which (taken together with
securities in which he is already interested and in which persons
acting in concert with him are interested) carry 30 per cent or
more of the voting rights of a company which is subject to the
Takeover Code, that person is normally required by the Takeover
Panel to make a general offer to all the remaining shareholders of
that company to acquire their shares. A waiver of Rule 9 of the
Takeover Code is not being sought in respect of the proposed
Investor Warrants which may be issued, therefore, Shareholders
should note that exercise of the Investor Warrants would be
dependent on the Investor's percentage holding in the ordinary
share capital of the Company reducing or, the Investor being
required to make an offer for the Company's entire issued share
capital pursuant to Rule 9 of the Takeover Code.
ABOUT ECR
ECR is a mineral exploration and development company. ECR's
wholly owned Australian subsidiary Mercator Gold Australia has
acquired 100% ownership of the Avoca and Bailieston gold projects
in Victoria, Australia. ECR has earned a 25% interest in the
Danglay epithermal gold project, an advanced exploration project
located in a prolific gold and copper mining district in the north
of the Philippines. An NI43-101 technical report was completed in
respect of the Danglay project in December 2015, and is available
for download from ECR's website.
ECR's wholly owned subsidiary Ochre Mining has a 100% interest
in the SLM gold project in La Rioja, Argentina. Exploration at SLM
has focused on identifying small tonnage mesothermal gold deposits
which may be suitable for relatively near term production.
Market Abuse Regulations (EU) No. 596/2014
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the
publication of this announcement via Regulatory Information Service
(RIS), this inside information is now considered to be in the
public domain.
FOR FURTHER INFORMATION, PLEASE CONTACT:
ECR Minerals plc Tel: +44 (0)20 7929 1010
William (Bill) Howell, Non-Executive Chairman
Craig Brown, Director & CEO
Ivor Jones, Director & COO
Email: info@ecrminerals.com
Website: www.ecrminerals.com
Cairn Financial Advisers LLP Tel: +44 (0)20 7213 0880
Nominated Adviser
Emma Earl / Jo Turner
Optiva Securities Ltd Tel: +44 (0)203 137 1902
Joint Broker
Graeme Dickson
FlowComms Tel: +44 (0)7891 677 441
Investor Relations
Sasha Sethi
Blytheweigh Tel: +44 (0)20 7138 3204
Public Relations
Tim Blythe / Camilla Horsfall / Nick Elwes
FORWARD LOOKING STATEMENTS
This announcement may include forward looking statements. Such
statements may be subject to numerous known and unknown risks,
uncertainties and other factors that could cause actual results or
events to differ materially from current expectations. There can be
no assurance that such statements will prove to be accurate and
therefore actual results and future events could differ materially
from those anticipated in such statements. Accordingly, readers
should not place undue reliance on forward looking statements. Any
forward-looking statements contained herein speak only as of the
date hereof (unless stated otherwise) and, except as may be
required by applicable laws or regulations (including the AIM Rules
for Companies), the Company disclaims any obligation to update or
modify such forward-looking statements because of new information,
future events or for any other reason.
View source version on businesswire.com:
http://www.businesswire.com/news/home/20170226005254/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
February 27, 2017 02:00 ET (07:00 GMT)
Ecr Minerals (LSE:ECR)
Historical Stock Chart
From Apr 2024 to May 2024
Ecr Minerals (LSE:ECR)
Historical Stock Chart
From May 2023 to May 2024