Serabi Gold plc Serabi Extends Drawdown Period For Convertible Loan
August 04 2020 - 01:00AM
UK Regulatory
TIDMSRB
For immediate release
4 August 2020
Serabi Gold plc
("Serabi" or the "Company")
Serabi extends drawdown period for convertible loan
Serabi Gold plc (AIM: SRB, TSX: SBI), the Brazilian focused gold mining
and development company, is pleased to announce that it has agreed with
Greenstone Resources II LP ("Greenstone") to extend by six months the
period during which the Company can draw down on the US$12 million
Convertible Loan Facility ("the Convertible) that was announced on 23
April 2020 and is being subscribed for by Greenstone.
Mike Hodgson, CEO, commented:
"Extending, by six months, the period in which we can draw down on the
Convertible, will relieve pressure to draw down funds earlier than might
otherwise be necessary and avoid incurring additional debt under the
Convertible that may ultimately not be required. This is excellent news
for the Company and its shareholders
"Despite the COVID-19 pandemic, we have continued mining operations at
the Palito Complex and with the gold prices that we have benefitted from
during the second quarter of this year, were able to pay down the
remaining US$3.5 million of the loan with Sprott Resource Lending
Partnership whilst maintaining our cash position. Despite lower
production levels, the second quarter was one of our best ever quarters
from a cash flow perspective. Greenstone provided Serabi with the
Convertible as a means to help ensure that the Company was able to
complete the acquisition of the Coringa gold project. With the gold
price looking set to be maintained, the Sprott loan now repaid and
projected production levels, we currently anticipate that Serabi can
fund the US$1 million per month instalments that are due to Equinox Gold
Corp ("Equinox") for Coringa, at least in the near term, from the cash
flow generated from on-going operations."
Details of the variation in the terms of the Convertible
The original period during which the Company could draw down funds under
the Convertible was due to expire on 31 December 2020 (the "Availability
Period"), after which time any funds that had not been drawn down under
the Convertible would no longer be available. The Company and
Greenstone have now agreed to extend the Availability Period to 30 June
2021. In all other respects the terms of the Convertible are unchanged.
There was no consideration payable to Greenstone in respect of this
variation to the terms.
As at 3 August 2020, the Company had drawn down US$2.0 million of the
Convertible and made payments of US$2.5 million to Equinox Gold Corp.
("Equinox") in respect of the US$12 million payment obligation (the
"Outstanding Consideration") for the Coringa gold project. After these
payments, the balance of the Outstanding Consideration amounts to
US$9.5 million. Under the arrangements agreed with Equinox, the Company
will continue to make payments of US$1.0 million per month until such
time as restrictions imposed as a result of the COVID-19 pandemic on
travel to and within Brazil are lifted at which time any remaining
balance of the Outstanding Consideration will become due within six
weeks of that date.
Related party transaction
AIM
As Greenstone is currently interested in more than 10 per cent. of the
issued ordinary share capital of the Company, the amendment to the
Availability Period (the "Amendment") is a related party transaction for
the purposes of Rule 13 of the AIM Rules ("Rule 13"). As Mark Sawyer, a
non-executive director of the Company, is a nominated Board appointee of
Greenstone, he is not independent for the purposes of Rule 13. For the
purposes of the AIM Rules, the independent directors of the Company
(being the Directors other than Mark Sawyer) consider, having consulted
with the Company's nominated adviser, Beaumont Cornish, that the
Amendment is fair and reasonable insofar as Shareholders are concerned.
This announcement is inside information for the purposes of Article 7 of
Regulation 596/2014.
The person who arranged for the release of this announcement on behalf
of the Company was Clive Line, Director.
Enquiries:
Serabi Gold plc
Michael Hodgson Tel: +44 (0)20 7246 6830
Chief Executive Mobile: +44 (0)7799 473621
Clive Line Tel: +44 (0)20 7246 6830
Finance Director Mobile: +44 (0)7710 151692
Email: mailto:contact@serabigold.com
contact@serabigold.com
--------------------------------------------------
Website: http://www.serabigold.com
www.serabigold.com
--------------------------------------------------
Beaumont Cornish Limited
Nominated Adviser and Financial Adviser
Roland Cornish Tel: +44 (0)20 7628 3396
Michael Cornish Tel: +44 (0)20 7628 3396
Peel Hunt LLP
UK Broker
Ross Allister Tel: +44 (0)20 7418 8900
Copies of this announcement are available from the Company's website at
www.serabigold.com.
Neither the Toronto Stock Exchange, nor any other securities regulatory
authority, has approved or disapproved of the contents of this
announcement.
Qualified Persons Statement
The scientific and technical information contained within this
announcement has been reviewed and approved by Michael Hodgson, a
Director of the Company. Mr Hodgson is an Economic Geologist by training
with over 26 years' experience in the mining industry. He holds a BSc
(Hons) Geology, University of London, a MSc Mining Geology, University
of Leicester and is a Fellow of the Institute of Materials, Minerals and
Mining and a Chartered Engineer of the Engineering Council of UK,
recognising him as both a Qualified Person for the purposes of Canadian
National Instrument 43-101 and by the AIM Guidance Note on Mining and
Oil & Gas Companies dated June 2009.
Forward Looking Statements
Certain statements in this announcement are, or may be deemed to be,
forward looking statements. Forward looking statements are identi ed by
their use of terms and phrases such as "believe", "could", "should"
"envisage", "estimate", "intend", "may", "plan", "will" or
the negative of those, variations or comparable expressions, including
references to assumptions. These forward looking statements are not
based on historical facts but rather on the Directors' current
expectations and assumptions regarding the Company's future growth,
results of operations, performance, future capital and other
expenditures (including the amount, nature and sources of funding
thereof), competitive advantages, business prospects and opportunities.
Such forward looking statements re ect the Directors' current beliefs
and assumptions and are based on information currently available to the
Directors. A number of factors could cause actual results to differ
materially from the results discussed in the forward looking statements
including risks associated with vulnerability to general economic and
business conditions, competition, environmental and other regulatory
changes, actions by governmental authorities, the availability of
capital markets, reliance on key personnel, uninsured and underinsured
losses and other factors, many of which are beyond the control of the
Company. Although any forward-looking statements contained in this
announcement are based upon what the Directors believe to be reasonable
assumptions, the Company cannot assure investors that actual results
will be consistent with such forward looking statements.
ENDS
Attachment
-- Convertible Extension
https://ml-eu.globenewswire.com/Resource/Download/b895ee77-1913-4635-aef9-74a7b1afd2a8
(END) Dow Jones Newswires
August 04, 2020 02:00 ET (06:00 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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