Baker Steel Resources Trust Ltd Completion of transaction (9472K)
April 16 2018 - 1:25AM
UK Regulatory
TIDMBSRT TIDMPOLY
RNS Number : 9472K
Baker Steel Resources Trust Ltd
16 April 2018
BAKER STEEL RESOURCES TRUST LIMITED
(Incorporated in Guernsey with registered number 51576 under the
provisions of The Companies (Guernsey) Law, 2008 as amended)
16(th) April 2018
Completion of previously announced Transaction with Polymetal
International plc ("Polymetal")
Baker Steel Resources Trust Limited (the "Company") is pleased
to announce that the previously disclosed sale by Polar Acquisition
Limited ("PAL") of its 45% ownership in the Prognoz silver property
in Russia completed on 13(th) April 2018 following receipt of all
required regulatory approvals.
PAL will continue to retain a 2-4% royalty on its 45% pro rata
share of production from the Prognoz silver project.
The total consideration paid for the 45% stake in Prognoz at
completion comprised US$72 million paid through the issue of
6,307,000 new ordinary shares of Polymetal (the "Consideration
Shares"). The number of Consideration Shares issued was determined
by dividing US$72 million by the arithmetic average closing price
of ordinary shares in Polymetal on the Main Market of the London
Stock Exchange in the six months ending two trading days before
Completion being US$11.42 per share. 90% of the Consideration
Shares will be subject to a lock-up period of 180 days. In March
2018, Polymetal declared a final dividend of US$0.30 per share, to
which the Consideration Shares will be eligible. Accordingly PAL is
due to receive a dividend of US$1.89 million in May 2018.
Over the last 12 months Polymetal shares have traded in a range
between GBP10.95 and GBP5.91, and we anticipate them to remain
volatile, particularly with current investor sentiment towards
Russia, which in turn is likely to increase the volatility in the
Company's NAV given PAL's carrying value will continue to be
adjusted in line with the Polymetal share price.
Using the closing price of Polymetal`s shares on 12 April 2018
of GBP6.62, the value of the Polymetal shares received by PAL
equates to approximately US$59.4 million. The carrying value of PAL
(including the royalty interest) has decreased by 1.1% during April
in line with this.
PAL plans to undertake a distribution of all the Polymetal
shares it has received to its shareholders and as such the Company
will monitor its holding of PAL and Polymetal shares going forward
taking into consideration the requirement to maintain portfolio
diversification whilst maximising potential returns.
Information on Prognoz (relevant to the Company's indirect
interest through PAL in the Prognoz royalty interest)
Prognoz is a very large world-class deposit and the largest
undeveloped primary silver deposit in Eurasia with JORC compliant
Indicated and Inferred Resources (estimated by Micon in 2009) of
292 Moz at 586 g/t silver.
Polymetal has stated that it will provide further guidance on
its near and long-term plans for Prognoz in the second half of
2018,
-- Project activities for 2018 include 46 km of diamond drilling
and extensive in-house metallurgical test work. The updated
JORC-compliant resource estimate is expected in Q4;
-- PFS and JORC-compliant reserve estimate in Q4 2019;
-- FS and Reserve update in Q4 2020 paving the way for potential
investment decision in H1 2021;
-- Subject to the positive investment decision, full run-rate of
production can be achieved in 2024.
Further details of the Company and its investments are available
on the Company's website www.bakersteelresourcestrust.com
Enquiries:
Baker Steel Resources Trust Limited +44 20 7389 8237
Francis Johnstone
Trevor Steel
Numis Securities Limited +44 20 7260 1000
David Benda (corporate)
James Glass (sales)
The Net Asset Value ("NAV") figure stated is based on unaudited
estimated valuations of the underlying investments and not
necessarily based on observable inputs. Such estimates are not
subject to any independent verification or other due diligence and
may not comply with generally accepted accounting practices or
other generally accepted valuation principles. In addition, some
estimated valuations are based on the latest available information
which may relate to some time before the date set out above.
Accordingly, no reliance should be placed on such estimated
valuations and they should only be taken as an indicative guide.
Other risk factors which may be relevant to the NAV figure are set
out in the Company's Prospectus dated 26 January 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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