TIDMMNC
RNS Number : 7443F
Metminco Limited
22 May 2017
ASX ANNOUNCEMENT 22 May 2017
FUNDING UPDATE
Metminco Limited (Metminco or the Company) (ASX: MNC; AIM: MNC)
is pleased to announce the following:
Redfield Convertible Note
The documentation in relation to the convertible note facility
of A$0.75 million with Redfield Asset Management and Redfield
Advisory (together Redfield) as announced 3 April 2017 (Redfield
Convertible Notes) is now complete. The Company has now received
A$0.75 million (A$300,000 prior to execution of the documentation
and $450,000 on execution). Metminco is advancing the Miraflores
Feasibility Study towards completion during the third quarter of
2017 at which point the Company will be well placed to transition
to the development phase of the Project.
Lanstead Funding
The Company is also pleased to have the continued support of its
other major shareholder, Lanstead Capital LP (Lanstead). The
Company has executed a binding term sheet with Lanstead to provide
approximately an additional A$200,000 in funding through a
non-redeemable convertible note facility (Lanstead Convertible
Notes or Note). Key terms of the facility follow:
Issue Price and Face Value: A$1,000 per Note and approximately
A$200,000 in aggregate.
Coupon Rate: 5% per annum, compounded monthly, interest to be
capitalised.
Maturity Date: The date which is 18 months after the issue
date.
Conversion Ratio: 16,461 shares per Note calculated by dividing
the A$1,000 Face Value per Note by the Conversion Price. 3,292,200
fully paid ordinary shares (Shares) in aggregate. Capitalised
interest converted by dividing by the Conversion Price to determine
the quantity of shares.
Sharing Agreement: The Company has also entered into a binding
term sheet to enter into a Sharing Agreement with Lanstead (terms
set out below).
Use of Funds
As previously announced, the Miraflores Feasibility Study, which
is anticipated to be completed during the third quarter 2017, is
progressing well with first gold pour targeted for first quarter
2019. The Company is targeting annual gold production averaging
50,000 ozs/Au per annum for 9 years with estimated all in
sustaining costs of US$650 per oz (refer the Company's announcement
dated 8 September 2016).
The proceeds from the Redfield and Lanstead Convertible Notes
will be applied toward the Miraflores Gold Project Feasibility
Study and working capital.
Mr William Howe, Managing Director, commented
"The fundamentals of the Miraflores Gold Project are highly
attractive and the Company expects the Feasibility Study to
demonstrate this. The focus of the Company is to deliver the
Feasibility Study to the market and transition to the development
stage. The Company is fortunate to have the continued support of
its two largest shareholders, Redfield and Lanstead as it
progresses Miraflores toward gold production targeted for early
2019.
The Company believes that the Cauca region is becoming more
prospective and attractive to investment, thereby placing it and
Miraflores in a strong position, as demonstrated by the recent
corporate activity in Colombia such as the strategic investment in
Continental Gold Inc. announced by Newmont Mining Corporation.
It is important to remember that the planned development of the
Miraflores Gold Project is the first leg of the Company's strategy
to become a significant gold producer. The Miraflores Gold Project
is part of the 100% Company owned Quinchia Gold Portfolio which
includes the Tesorito, Dosquebradas and Chuscal gold targets, all
of which have the potential to increase targeted mine life and
annual gold production."
Sharing Agreement
The Sharing Agreement provides that the Company's economic
interest will be determined and payable in 18 monthly settlements
as measured against a benchmark price of $0.081 per Share (the
Benchmark Price). If the Metminco measured share price exceeds the
Benchmark Price, for that month, the Company will receive more than
100 per cent of the monthly settlement due on a pro rata basis.
There is no upper limit placed on the additional proceeds
receivable by the Company as part of the monthly settlements.
Should the measured share price be below the Benchmark Price, the
Company will receive less than 100 per cent of the expected monthly
settlement on a pro rata basis. In no event would a decline in the
share price result in any increase in the number of Shares received
by Lanstead or any other benefit accruing to Lanstead.
Further terms of the Lanstead Convertible Note are as
follows:
Mandatory Conversion on Maturity Date: Unless the Notes have
been converted prior to the Maturity Date, the Notes including
Capitalised Interest will automatically convert into shares on the
basis of the Conversion Ratio on the Maturity Date.
Conversion Price: A$0.06075 per share.
Measured Share Price: The Metminco average share price on the
five days preceding the monthly settlement date.
Conversion by Note Holder: at any time between the Issue Date
and the Maturity Date, a holder of Notes may convert some or all of
the Notes into shares on the basis of the Conversion Ratio.
Options: Lanstead to receive 6,584,400 options. Options expire
24 months from issue date of options and have an exercise price of
A$0.081 per share. Options to be issued as soon as the Company's
available placement capacity under ASX Listing Rule 7.1 is
refreshed.
Lanstead is a substantial shareholder in Metminco which
currently owns 25,316,456 shares in Metminco (19.9%). The issue of
the Lanstead Convertible Notes is therefore considered a Related
Party Transaction under AIM Rule 13. The Directors of Metminco
consider, having consulted with its nominated adviser, that the
terms of the transaction are fair and reasonable insofar as its
shareholders are concerned.
Upon conversion of the Lanstead Convertible Notes, Lanstead will
be issued with 3,292,200 shares plus additional shares due as a
result of the conversion of the capitalised interest. As a result,
Lanstead's ownership in Metminco will increase to a minimum of
28,608,656 shares. Based on Metminco's current outstanding shares
of 127,200,299 this would result in Lanstead's ownership increasing
from 19.9% to a minimum of 21.9%.
This announcement contains inside information as stipulated
under Article 7 of the Market Abuse Regulation (EU) No.
596/2014.
William Howe
Managing Director
Metminco Limited ABN Suite 401, 6 Help Street,
43 119 759 349 Chatswood NSW, 2067
ASX Code: MNC.AX; AIM Tel: +61 (0) 2 9460 1856;
Code: MNC.L Fax: +61 (0) 2 9460 1857
www.metminco.com.au
For further information,
please contact:
METMINCO LIMITED
Phil Killen Office: +61 (0) 2
9460 1856
NOMINATED ADVISOR AND BROKER
RFC Ambrian
Australia
Will Souter / Nathan Forsyth Office: +61 (0) 2
9250 0000
United Kingdom
Charlie Cryer Office: +44 (0) 20
3440 6800
JOINT BROKER
SP Angel Corporate Finance
LLP (UK)
Ewan Leggat Office: +44 (0) 20
3470 0470
PUBLIC RELATIONS
Camarco
United Kingdom
Gordon Poole / Tom Huddart Office: + 44 (0) 20
/ James Crothers 3757 4997
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This information is provided by RNS
The company news service from the London Stock Exchange
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