TIDMPERE
RNS Number : 5237M
Pembridge Resources plc
22 September 2021
22 September 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE UK VERSION OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014
AS IT FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018 AND CERTAIN OTHER ENACTING MEASURES
Update on the Minto Capital Raise, TSXV Listing, Guarantee to
Sumitomo and short term financing of Pembridge
London, United Kingdom - Pembridge Resources plc (LSE: PERE)
("Pembridge" or the "Company") is pleased to announce the closing
of Minto Explorations Limited's ("Minto") capital raise as a pre
cursor to its listing via a "reverse take-over" of 1246778 B.C.
Ltd. (the "RTO") under the policies of the TSX Venture Exchange
(the "Exchange" or the "TSXV") and Guarantee to Sumitomo as well as
short term financing for Pembridge.
Highlights
-- Minto capital raise closed or committed in respect of approximately CAD$ 30.5 million
-- Of the capital raised, CAD$ 15.2 million have been received
in escrow accounts, where it is to be held until listing approval
is received. The remaining CAD$ 15.3 million has been committed,
with approximately CAD$ 0.55 million anticipated to be closed in
the next week and the remaining approximately CAD$ 14.75 million
being closed on concurrent with the completion of the RTO
transaction
-- Minto application to TSXV to list the shares with expected listing in Q4 2021
-- The capital raise values Minto at CAD$ 156.6 million before the financing
-- Pembridge provides Sumitomo with guarantee for borrowing by Minto of US$ 495,000
-- Short term financing of up to GBP200,000 provided to Pembridge by major shareholder
Capital Raise and listing application
Pembridge announced on 16 June 2021 that Minto was entering into
a reverse take-over ("RTO") agreement with a publicly listed
corporation 1246778 B.C. Ltd, which is a reporting issuer in Canada
("Shellco") to form the listed issuer ("PublicCo"). PublicCo will
be renamed Minto Metals Corp. ("Minto Metals"), and will file an
application to the TSXV to list the shares of Minto Metals on the
TSXV and, concurrently, raising funds from a private placement. The
capital raise has now closed and/or commitments have been received
for aggregate subscription proceeds of approximately CAD$ 30.5
million. Of this amount, CAD$ 15.2 million has been received in
escrow accounts, approximately CAD$ 0.55 million is anticipated to
be closed on in the next week and the remaining CAD$ 14.75 million
will be closed on concurrent with the completion of the RTO
transaction. The proceeds of the financing will be held in escrow
pending closing of the reverse take-over, and upon release of the
same, will fund operational improvements, exploration and working
capital for Minto Metals.
Of this new capital, CAD$ 3.8 million was invested by Pembridge,
which has thus maintained its ownership percentage in Minto Metals
at 11.1%, which is subject to change depending on whether
additional capital is raised prior to the listing of Minto Metals.
Pembridge funded this investment with the USD $3 million of
convertible loan notes that it issued in June 2021. Gati
Al-Jebouri, the CEO and Chairman of the Board of Directors of the
Company will be appointed as a director of Minto Metals and has
been nominated as Chairman of the Audit and Risk Committee of the
Minto Metals board. Gati Al-Jebouri is investing an additional CAD$
250,000 of his personal funds in the Minto Metals financing.
As part of the RTO, Pembridge's shares in Minto will be replaced
in a share-for-share exchange whereby all existing Minto
shareholders will receive voting shares in PublicCo. As Pembridge
will no longer hold all of the voting shares in Minto Metals, with
effect from date of listing on TSXV, it is no longer required to
treat Minto Metals as a subsidiary in its consolidated financial
statements.
Minto valuation
The pricing of CAD$ 2.60 per share applied in the capital raise
implies a pre-money valuation of Minto Metals of CAD$ 156.6 million
and post money CAD$ 187.1 million. At post-money valuation of Minto
Metals, Pembridge's 11.1% share in Minto Metals is valued at CAD$
20.8 million. This is approximately GBP11.8 million at current
exchange rates, equal to GBP0.133 per undiluted Pembridge share
based on the Company's issued share capital of 88,965,516 shares.
If all existing options and the conversion rights of the recently
issued convertible loan notes were exercised, the Company would
have 122,220,856 issued shares.
Guarantee to Sumitomo for Minto borrowing
Minto's existing US$ 12.5 million prepayment funding with
Sumitomo has been drawn in the amount of US$ 8.0 million to date.
Although Minto is currently performing with a positive operating
cash flow, Minto's working capital requirements arising as a result
of the capital investments in developing the Minto mine necessitate
a draw down under the Sumitomo prepayment funding. To enable the
drawing down of the remaining US$ 4.5 million under the facility,
Sumitomo has requested that the existing shareholders guarantee
this amount.
These guaranteed liabilities shall be payable severally and not
jointly by each Guarantor on a pro rata basis in proportion to
their current shareholding ownership. With the current Pembridge
shareholding in Minto at 11%, this means that the Company is to
guarantee Minto's liability towards Sumitomo in the amount of US$
495,000. This guarantee will automatically be discharged upon (i)
the completion of the RTO, with Minto receiving minimum gross
proceeds of CAD$ 25 million, or (ii) Sumitomo being repaid in full
of the Additional Advance, whichever is earlier.
Pembridge short term financing
The capital raise and listing of Minto Metals on the TSXV were
expected to be completed by the end of July 2021. As a result of
conditions outside the control of Minto's management, the capital
raise and listing have been delayed until now. Repayment of the CAD
$4 million receivable by Pembridge from Minto is to commence after
the capital raise and is to be repaid in 4 equal quarterly
payments. Due to the delay in the capital raise, the first
repayment is now expected in Q4 2021 instead of Q3 2021.
This has impacted the cash flow of Pembridge and, to ensure that
the company has sufficient funds to meet all its ongoing
obligations, Pembridge's Chairman and CEO, Gati Al-Jebouri, has
provided an additional facility of up to GBP200,000 to cover any
cash shortfall until the end of 2021. This facility has been
approved by the Pembridge Board of Directors and entered into on 21
September 2021. The Facility carries interest at an annual rate of
14%, to be paid upon repayment, and an arrangement fee in the
amount of 6% of the amounts drawn down .
Gati Al-Jebouri, Chief Executive Officer and Chairman of the
Board of Pembridge said:
"This capital raise by Minto Metals, resulting in investment by
new and existing shareholders at a pre-money valuation of CAD$
156.6 million, confirms the true value of our investment in Minto.
This additional capital will enable Minto Metals to further
increase production, to benefit from the resulting economies of
scale as well as the current strong price of copper and to extend
its life of mine with further exploration. The capital raise and
listing of Minto Metals provides a transparent third party
valuation of our investment. I trust that the market will now
recognise the value of Pembridge's investment and reflect this in
the Company's market valuation. We are proud to have been involved
in re-starting the mine and pleased that it is now able to move
into a new phase of development with the upcoming listing and new
capital and look forward to seeing the value of our investment
increase as Minto Metals delivers on its long term objectives. With
the expected cash inflows from Minto Metals and higher valuation of
our company, I believe that we will be ready to execute on the
fourth stage of Pembridge development, which I outlined in 2019
when I took over the leadership of the company. This stage is the
identification of new projects to invest in and grow our
business."
Cautionary Statement
This News Release includes certain "forward-looking statements"
which are not comprised of historical facts. Forward-looking
statements include estimates and statements that describe the
Company's future plans, objectives or goals, including words to the
effect that the Company, or management, expects a stated condition
or result to occur. Forward-looking statements may be identified by
such terms as "believes", "anticipates", "expects", "estimates",
"may", "could", "would", "will", or "plan". Since forward-looking
statements are based on assumptions and address future events and
conditions, by their very nature they involve inherent risks and
uncertainties. Although these statements are based on information
currently available to the Company, the Company provides no
assurance that actual results will meet management's expectations.
Risks, uncertainties and other factors involved with
forward-looking information could cause actual events, results,
performance, prospects and opportunities to differ materially from
those expressed or implied by such forward-looking information.
Forward-looking information in this news release includes, but is
not limited to, the anticipated amount of additional funds to be
raised in future closings of financing, the anticipated use of
proceeds of the financings and the Company's intentions regarding
its objectives, goals or future plans and statements. Factors that
could cause actual results to differ materially from such
forward-looking information include, but are not limited to, the
Company's ability to predict or counteract the potential impact of
COVID-19 coronavirus on factors relevant to the Company's business,
failure to identify additional mineral resources, failure to
convert estimated mineral resources to reserves with more advanced
studies, the inability to eventually complete a feasibility study
which could support a production
decision, the preliminary nature of metallurgical test results
may not be representative of the deposit as a whole, delays in
obtaining or failures to obtain required governmental,
environmental or other project approvals, political risks,
uncertainties relating to the availability and costs of financing
needed in the future, changes in equity markets, inflation, changes
in exchange rates, fluctuations in commodity prices, delays in the
development of projects, capital, operating and reclamation costs
varying significantly from estimates and the other risks involved
in the mineral exploration and development industry, and those
risks set out in the Company's public documents. Although the
Company believes that the assumptions and factors used in preparing
the forward-looking information in this news release are
reasonable, undue reliance should not be placed on such
information, which only applies as of the date of this news
release, and no assurance can be given that such events will occur
in the disclosed time frames or at all. The Company disclaims any
intention or obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, other than as required by law.
ENDS
NOTES TO EDITORS
About Pembridge Resources plc
Pembridge is a mining company that is listed on the standard
segment of the Official List of the FCA and trading on the main
market for listed securities of London Stock Exchange plc.
Pembridge has an investment in Minto Explorations Ltd, a British
Columbia incorporated business operating the Minto mine in Yukon,
Canada.
About Minto Explorations Limited
Minto operates the underground copper-gold-silver mine located
in central Yukon, approximately 240 kilometres north of the capital
Whitehorse along the Klondike Highway. In excess of US$350 million
of capital expenditure has been invested into Minto operations
since site construction began in 2006. The Minto mine was in
continuous production between 2007 and 2018, when the mine was
placed onto temporary care and maintenance. Pembridge acquired
Minto from Capstone Mining Corporation in June 2019 and restarted
operations in October 2019.
Enquiries:
Pembridge Resources plc: +44 (0) 20 7917 2968
Gati Al-Jebouri, Chief Executive Officer and Chairman of the
Board
David James, Chief Financial Officer
Brandon Hill Capital - United Kingdom: +44 (0)20 3463 5016
Jonathan Evans
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END
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