Financing and Debt Facility
22 May 2019
AfriTin Mining Limited
("AfriTin", "ATM" or the "Company"
and with its subsidiaries the "Group")
Phase 1 Working Capital Financing Secured
Equity Subscription and Execution of Debt Facility
Related Party Transaction
AfriTin Mining Limited (AIM: ATM) is a mining company with a portfolio of tin assets in Namibia and South Africa. This includes the flagship near production asset that is being developed at the Uis Tin Mine in Namibia ("Uis Mine"). AfriTin is pleased to announce that it has secured additional financing to bring its Phase 1 Pilot Plant (the "Plant") at Uis into production, as well as a general working capital facility to ramp up to steady-state production.
On 1 February 2019, the Company announced a modification to the original Phase 1 Pilot Plant circuit. These plant additions provide for improved returns through additional production capacity and the addition of a magnetic separator to allow for the production of tantalum concentrate. The Directors believe that the successful completion and ramp up of the Plant will demonstrate a compelling business case, through a bankable feasibility study, for the Phase 2 development of the plant. Concurrent with the development of the Phase 1 Pilot Plant, a resource drilling programme to validate tonnages and grades for the production of a JORC-compliant mineral resource remains ongoing. In order to facilitate the finalisation of these two initiatives, and for working capital purposes, the Company has sourced additional financing.
The Company can confirm today that it has completed an equity fundraising by way of a direct subscription of 99,613,074 ordinary shares of no par value in the Company (the "Fundraising Shares") at a price of 3 pence per Fundraising Share (the "Fundraising Price"), to raise approximately £3 million (before expenses). Hannam & Partners acted as brokers in connection with the direct subscription.
The Fundraising Price represents a discount of 9 per cent to the Closing Price on Friday 17 May 2019, the last trading day prior to the dispatch of the subscription letters. An application has been made for the Fundraising Shares, which will rank pari passu with the Company's existing issued share capital, to be admitted to trading on AIM ("Admission"). Dealings in the Fundraising Shares are expected to commence on 29 May 2019. The Fundraising Shares will represent approximately 15 percent of the total issued share capital in the Company on Admission.
Bushveld Minerals Limited Standby Working Capital Facility
In addition, a standby working capital facility of ZAR30,000,000 (c. £1.7million) has been entered into today between the Company and Bushveld Minerals Limited ("Bushveld"). Bushveld is a shareholder of AfriTin, which holds 9.5% of the issued share capital in the Company.
Bushveld has agreed to a 12-month facility of ZAR30,000,000 (c. £1.7 million) (the "Facility") towards funding the general corporate and working capital requirements of the Group. The security for this Facility is a general notarial bond to be registered in favour of Bushveld over the Plant. The Facility is repayable after 12 months and bears a ZAR300,000 facility fee. Interest on the Facility accrues at a rate of 12.5% per annum (payable quarterly) on drawn amounts. Furthermore, the Facility may be repaid at any time at no cost prior to the final repayment date.
Subject to AfriTin's shareholders resolving to increase the Company's authorised share capital at the AfriTin annual general meeting to be held in June 2019, Bushveld has the right, in the event of AfriTin defaulting in repaying the Facility, to elect to convert any outstanding loan amount at the maturity of the Facility into AfriTin ordinary shares of no par value at a 20-day VWAP for such shares discounted by 10%.
Application of the Financing
The funds are to be used for the completion of the development of the Phase 1 Plant as well as working capital during production ramp up. Currently, the Company believes that the Phase 1 Pilot Plant is approximately 90% complete and that this financing will result in pilot commissioning for commercial production by Q2 2019, as previously advised.
Disclosure and Transparency Rules
In accordance with the provisions of the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, the Company confirms that, following the issue of the Fundraising Shares its issued share capital will comprise 644,201,599 ordinary shares of no-par value upon Admission (the "Enlarged Share Capital"). All of these ordinary shares have equal voting rights and none of the ordinary shares are held in treasury. The total number of voting rights in the Company will therefore be 644,201,599 upon Admission. This total voting rights figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify their interests in, or a change to their interest in, the Company under the DTRs.
Related Party Transaction
Miton Group plc ("Miton") has subscribed for 5,000,000 Ordinary Shares as part of the Direct Subscription. Following completion of the Direct Subscription, Miton will hold 56,975,555 Ordinary Shares in the Company representing 8.8% of the Enlarged Share Capital. Miton have held more than 10% of the Company's shares in the last 12 months and accordingly, in accordance with AIM Rule 13, their participation is treated as a related party transaction under the AIM Rules ("RTPA").
At the same time, as set out above, Bushveld is entering into a working capital facility with the Company. Bushveld have held more than 10% of the Company's shares in the last 12 months and accordingly, in accordance with AIM Rule 13, their participation is treated as a related party transaction under the AIM Rules ("RTPB").
The directors of the Company, with the exception of Anthony Viljoen who is a director of Bushveld, consider that, having consulted with WH Ireland, the Company's nominated adviser, that the terms of RTPA and RTPB are fair and reasonable insofar as the Company's shareholders are concerned.
Anthony Viljoen commented
"The plant expansion and modifications announced in February 2019 not only allow for the production of tantalum concentrate, but should also increase the production capacity to the plant. As a result we expect this could increase cash generation during Phase 1. This financing package has been put together to allow us to complete this development and to provide us with general working capital to achieve our goal of first production of tin concentrate.
"I'm pleased to report that the plant is currently 90% complete and that this financing will bring commissioning on time, in Q2 2019. We remain grateful to our existing shareholders, who have supported this raise and continue to support the Company. We remain committed to our objectives of producing an operational, Phase 1 Pilot Plant and a confirmed JORC compliant resource at Uis to provide a solid platform for Phase 2 feasibility and delivery."
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.
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For further information, please visit www.afritinmining.com or contact:
AfriTin Mining Limited
+27 (11) 268 6555
Anthony Viljoen, CEO
Nominated Adviser and Joint Broker
+44 (0) 207 220 1666
WH Ireland Limited
Corporate Advisor and Joint Broker
H&P Advisory Limited
+44 (0) 20 7907 8500
+44 (0)20 7399 9400
NOVUM Securities Limited
Tavistock Financial PR (United Kingdom)
+44 (0) 207 920 3150
About AfriTin Mining Limited
Notes to Editors
AfriTin Mining is the first pure tin company listed in London and its vision is to create a portfolio of world-class, conflict-free, tin-producing assets. The Company's flagship asset is the Uis brownfield tin mine in Namibia, formerly the world's largest hard-rock tin mine.
AfriTin is managed by an experienced board of directors and management team with a current two-fold strategy: fast track Uis brownfield tin mine in Namibia to commercial production in Q2 2019 ramping up to 5,000 tonnes of concentrate, and consolidation of other quality African tin assets. The Company strives to capitalise on the solid supply/demand fundamentals of tin by developing a critical mass of tin resource inventory, achieving production in the near term and further scaling production by consolidating tin assets in Africa.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
Quick facts: AfriTin Mining Ltd
Market Cap: £21.42 m
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