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Eurasia Mining

Eurasia Mining to seek shareholder approval to raise up to £3 million

Eurasia Mining has called a general meeting of shareholders to authorise - inter alia - a restructuring of the company's share capital, the additional issue of warrants to Series A Loan Note holders and major lender Deloan Investments, and deeds of variation relating to existing loan note agreements. 

Under the original Deloan subscription agreement, warrants to subscribe for 40 million new shares at 5p were issued. Eurasia propose to increase this number to 200 million, exercisable at 1p.

Similarly, Series A Loan Note holders are to have their previously granted warrants raised to 47 million exercisable at 1p, as opposed to 9.4 million exercisable at 5p.

Both the Deloan convertible loan notes and the Series A Loan Notes will now convert at 1p per share instead of the previously arranged 5p per share.

The company also proposes to grant shareholder warrants exercisable at 1p per share within 9 months of their issue, in the ratio of one warrant per three shares held.

The capital restructure is necessary to allow new shares and warrants to be issued, as the share price is currently below the par value of the shares, which prohibits the issue of equity to raise funds. Eurasias propose to sub-divide each existing ordinary share of 5p into one ordinary share of 0.1p and one deferred share of 4.9p.

As the issue of the proposed warrants would result in Deloan Investments holding more than 30% of the company's share capital, a waiver of Rule 9 of the Takeover Code - which would entail Deloan being obliged to make an offer for the company - has been requested. If the Takeover Panel agree to such a waiver, shareholders will be asked to vote on a resolution at the General Meeting.

The end result, if all loan notes convert and if all warrants - excluding the shareholder warrants - are exercised, will be 535.4 million shares in issue, in return for the receipt of £2,470,000 of additional new funding from the exercise of warrants. The Series A warrant-holders have all committed to exercise in full within 14 days of the meeting, if the necessary resolutions are approved by shareholders. Additionally, if all shareholders take up their warrant entitlement, and exercise in full, a further 47 million shares will be issued, raising an additional £470,000 to further the company's progress.

Eurasia have been working closely with Dmitry Suschov, a director of the company, who wholly owns and controls Deloan Investments, for over a year and have developed plans to expand gold exploration activities in Russia and to use the current market conditions to secure investment opportunities in the minerals industry together. The directors see considerable opportunities but believe that if the company is to continue and flourish, it is essential that these new arrangements are put in place to enable flexibility in fundraising.