Xtract Resources plc Equity Placing and Corporate Update (3827W)
November 14 2017 - 1:01AM
UK Regulatory
TIDMXTR
RNS Number : 3827W
Xtract Resources plc
14 November 2017
For immediate release
14 November 2017
Xtract Resources Plc
("Xtract" or the "Company")
Equity Placing
Corporate Update
Total Voting Rights
Placing
The Board of Xtract Resources Plc ("Xtract" or the "Company")
announces that the Company's Broker, Beaufort Securities, has today
conditionally raised GBP1,700,000 (before expenses) following the
placement of 59,649,140 new Ordinary Shares of 0.02p each
("Ordinary Shares") at 2.85p ("Placing Price") per new Ordinary
Share (the "Placing"). The new Ordinary Shares represent 20.50% of
the current issued ordinary share capital of the Company. The
Placing Price is at a discount of approximately 8.5% compared to
the 5 day volume weighted average price of 3.12p for the period
ended 13 November 2017. In completing the Placing the Board has
utilised the waiver of pre-emption rights provided by shareholders
at the last Annual General Meeting.
The net proceeds from the Placing (amounting to GBP1,530,000
after direct expenses) will be utilised by the Company to pay off
outstanding debt of GBP530,000 and to take advantage of commercial
opportunities offered in the Manica area and elsewhere.
Background to the Placing
The Board stated earlier this year that it is acutely aware of
the impact of dilution on shareholders and will make every effort
to limit future dilution and, in the event that it is practicable
and cost effective to do so, give full consideration to ways in
which shareholders can participate in any future fund raisings. The
Company had considered whether it would be feasible to offer shares
on similar terms to shareholders by means of a pre-emptive issue,
but understands that the placing funds would not have been
available on the terms offered and in the timescale envisaged if
combined with a pre-emptive offering. The Board fully considered
the offer of funding and has taken into account the uses to which
the funds being raised could be put and whether in its view there
are sufficient commercial advantages for the development of
shareholder value to taking the funding now. The Board further
considered the terms and quantum of the funding offered, which was
initially in excess of GBP1.8 million. Given that pre-emption could
not be combined with the Placing, the Board has reduced the impact
of dilution by reducing the Placing to GBP1.7 million and the
Placing Price discount is 8.5% compared to the 5 day volume
weighted average price of 3.12p. On balance therefore, the Board
has concluded that it would be in the best interests of the Company
and its shareholders to proceed with the Placing with Beaufort
without a pre-emptive offering at this time at the level of
dilution proposed.
Update on alluvial operations
In October 2017, the Board announced that alluvial mining
contractors Sino Minerals and Omnia Mining, had each commenced
production on the eastern and western halves respectively of the
Manica concession. In respect of the eastern half, the Company
reported that smelting of first gold was expected no later than the
10 October 2017 which was achieved on 8 October 2017, and the
Company was in receipt of its first gold bars on 22 October 2017.
In respect of the western half, the Company reported that first
income was anticipated at the end of November 2017 and Omnia
continue to work on the gold plant and in particular the gold room
to increase fine gold recovery and hence overall gold recovery.
Colin Bird, Chairman said: "The placing was considered necessary
to satisfy outstanding debt and remove the requirement for further
convertible issues. The Company has also made the placing in order
to have immediate access to funds to take full advantage of the
potential within the Manica area which may include taking equity
positions in operations and fast tracking the hard rock
propositions together with others in the vicinity. The Company will
continue to pursue other opportunities if and when deemed
appropriate.
Admission to AIM
Application will be made for admission of the Placing Shares to
trading on AIM ("Admission"), in aggregate amounting to 59,649,140
new Ordinary Shares ("New Shares") to be admitted to trading on or
around 28 November 2017. The New Shares will rank pari passu in all
respects with the Company's existing issued ordinary shares.
Total Voting Rights
On Admission of the New Shares, the Company will have
350,560,684 Ordinary Shares in issue with voting rights. Xtract
does not currently hold any shares in treasury. Accordingly, this
figure of 350,560,684 Ordinary Shares may be used by shareholders
in the Company as the denominator for the calculations by which
they will determine if they are required to notify their interest
in, or a change in their interest in, the share capital of the
Company under the FCA's Disclosure Guidance and Transparency
Rules.
Broker Warrants
In conjunction with the Placing, the Company will issue
5,964,914 Broker warrants to Beaufort Securities Limited subject to
a resolution to be put to shareholders at an AGM or shareholder
meeting to be convened, exercisable in whole or in part at 2.85p to
be exercised within 2 years of being issued.
Other
This announcement contains inside information for the purposes
of Article 7 of EU Regulation No. 596/2014 on market abuse. Upon
the publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
Further details are available from the Company's website which
details the Company's project portfolio as well as a copy of this
announcement: www.xtractresources.com
Enquiries:
Xtract Resources Plc Colin Bird, Executive Chairman +44 (0) 20
3416 6471
Beaumont Cornish Michael Cornish +44 (0) 20 7628 3369
Roland Cornish
Felicity Geidt
Email: corpfin@b-cornish.co.uk
Beaufort Securities Jon Bellis +44 (0) 20 7382 8300
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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