28 July 2016
GOLDSTONE RESOURCES LIMITED
("GoldStone" or the "Company")
Conditional £1.0 million Fundraise and Director Change
GoldStone Resources Limited (AIM: GRL), the West and Central Africa focused gold exploration company quoted on AIM, is pleased to announce that it has conditionally raised, in aggregate, £1.0 million through a placing and subscription of £0.809 million and the settlement of a loan of £0.191 million (US$0.25 million).
· GoldStone has conditionally raised, in aggregate, £1.0 million before expenses through
- the placing and subscription of 32,366,400 new ordinary shares of 1.0p each ("Ordinary Shares") with new and existing investors at a price of 2.5p ("Placing Price") (the "Placing")
- the settlement of Stratex International Plc's ("Stratex") unsecured loan of £0.191 million (US$0.25 million), being the amount drawn down to date, (the "Stratex Loan") into 7,633,600 new Ordinary Shares based on the Placing Price (the "Loan Settlement") (together with the Placing, the "Fundraise")
· Pursuant to the Placing, 9,342,954 new Ordinary Shares will be issued under the Company's existing share authorities and 30,657,046 new Ordinary Shares will be issued under the new share authorities to be sought at the Company's annual general meeting later today ("AGM"). However, if shareholders do not approve the Company's share authorities pursuant to Special Resolution 1 as set out in the notice of the AGM, the Fundraise will not proceed
· The Placing Price represents a discount of approximately 13.0 per cent. to the closing share price of 2.875p on 27 July 2016, being the last day prior to this announcement
· A warrant to subscribe for one new Ordinary Share at a price of 5.0p per share, being a 100 per cent. premium to the Placing Price, will be attached to each new Ordinary Share issued pursuant to the Fundraise (the "Warrants"). The Warrants will vest immediately on issue and are valid for 24 months from the date of Admission. Stratex has undertaken that it will not exercise the Warrants issued to it, if such exercise would result in an obligation to make an offer under Rule 9 of the City Code on Takeovers and Mergers.
· In addition to the Loan Settlement, Stratex has also subscribed for 5,745,464 new Ordinary Shares pursuant to the Placing. On completion of the Fundraise, Stratex will therefore be interested in 34,212,397 Ordinary Shares, representing approximately 33.45 per cent. of the Company's then enlarged share capital
· The proceeds of the Fundraise will enable GoldStone to advance its existing projects, including undertaking reverse circulation ("RC") drilling on its main project, Homase-Akrokerri, assess other strategic opportunities and provide general working capital
Christopher Hall, Non-executive Chairman of GoldStone, said:
"I am very pleased that due to investor demand, Goldstone's planned £850,000 financing was increased to £1.0 million. Our largest shareholder, Stratex, has agreed to settle its loan and subscribed for additional shares as part of the Fundraise in order to maintain its interest. There was support from most other large shareholders and gratifyingly, there was a significant contribution from new investors encouraged by the improving market conditions for junior exploration companies and no doubt following the recent appointment of Emma Priestley as CEO. As a result, the Fundraise provides the Company with a strengthened balance sheet and impetus to advance its projects in Ghana.
With this in mind I have made the decision to step down after almost two years on the GoldStone board, following the conclusion of the Company's AGM. The Company has agreed that, in the interests of all shareholders, Neil Gardyne, the Independent Non-executive Director, will succeed me as Non-executive Chairman."
Background to the Fundraise and use of proceeds
The Company is pleased to announce the Fundraise, which represents an important first step for the Company as it seeks to advance its assets after a period of minimal activity. The net proceeds of the Fundraise will be will used to advance the Company's principal project, Homase-Akrokerri, through the completion of up to 2,000 metres of RC drilling to test the extension of the known mineralisation. In addition, the net proceeds of the Fundraise will also provide the Company with general working capital and an opportunity to assess other strategic opportunities.
In addition, as a result of the Loan Settlement, the Company will have no outstanding borrowings.
Settlement, dealings and total voting rights
Subject to approval of the share authorities at the AGM, application will be made for the admission of 40,000,000 new Ordinary Shares to trading on AIM ("Admission"). Admission and dealings in new Ordinary Shares is expected to commence at 8.00 a.m. on 11 August 2016. On Admission, the Company will have 102,286,363 Ordinary Shares in issue.
The Company does not currently hold any Ordinary Shares in treasury. Accordingly, the above figure of 102,286,363 may be used by shareholders 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 Financial Conduct Authority's Disclosure and Transparency Rules.
Significant shareholders participation in the Fundraise and related party transactions
Pursuant to the Fundraise, Stratex has agreed to the Loan Settlement and to subscribe for 5,745,464 new Ordinary Shares in the Placing and, accordingly, immediately following Admission it will hold 34,212,397 Ordinary Shares, representing approximately 33.45 per cent. of the Company's enlarged issued share capital.
Metal Tiger plc ("Metal Tiger") has also subscribed for 1,000,000 new Ordinary Shares in the Placing and, accordingly, immediately following Admission it will hold 9,256,586 Ordinary Shares, representing approximately 9.05 per cent. of the Company's enlarged issued share capital.
As Stratex and Metal Tiger each currently holds over 10 per cent. of the Company's issued share capital, their participation in the Fundraise is deemed to be a related party transaction under Rule 13 of the AIM Rules for Companies. The independent director of the Company for the purpose of the Fundraise, being Neil Gardyne, having consulted with the Company's nominated adviser Strand Hanson Limited, consider that the terms of Stratex's and Metal Tiger's participation in the Fundraise are fair and reasonable insofar as GoldStone's shareholders are concerned.
For further information, please contact:
GoldStone Resources Limited
Emma Priestley/ Neil Gardyne
+44 (0)20 7830 9650 / +27 (0)82 490 4427
Strand Hanson Limited
Richard Tulloch / James Bellman
+44 (0)20 7409 3494
SI Capital Limited
Nick Emerson / Andy Thacker
+44 (0)1483 413 500
The information communicated in this announcement is inside information for the purposes of Article 7 of Market Abuse Regulation 596/2014 ("MAR"). Market soundings, as defined in MAR, were taken in respect of the Fundraise, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.
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