The Company has today been notified by RAB Capital plc, acting as discretionary manager of RAB Special Situations (Master) Fund Limited, that following a disposal on 8 May, 2009, it now has an indirect interest in 59,297,595 ordinary shares of 1 penny each in the Company representing 24.17 per cent. of the total voting rights in issue.
For the purposes of the transitional provisions of the Financial Services Authority’s Disclosure and Transparency Rules, the total number of ordinary shares of 1p each in the capital of the Company in issue as at the date of this notice is 245,316,533 with each share carrying the right to one vote.
There are no shares held in treasury.
Therefore, the total number of voting rights in the Company is 245,316,533.
The above figure 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 to their interest in, the share capital of the Company under the Disclosure and Transparency Rules.
The Company announces that as at 30 April, 2009, following an event changing the breakdown of voting rights, Barclays plc no longer has a notifiable interest in the current voting rights of the Company.
The Company has entered into a conditional agreement with Cyrus Capital Partners, LP (“Cyrus”) and FBC Sarl (an associated company of Cyrus) to restructure its current senior secured debt facility (“Cyrus Facility”). The restructuring will provide financial stability to the Company by removing the current interest burden, extending the maturity and providing flexibility to raise new debt financing. It is intended that the restructuring will enable the Company to continue its development of the Black Angel zinc/lead mine, facilitate the proposed acquisition of the Nalunaq gold mine and bring it into production.
Restructuring Terms:
FBC Sarl has conditionally subscribed for the Loan Notes in exchange for the cancellation of the Cyrus Facility.
The subscription by FBC Sarl is conditional, inter alia, upon shareholder approval of the Loan Notes and the Company amending its articles of association to create a special class of share which will be issued to FBC Sarl. This share (‘B’ Share) will entitle FBC Sarl to the same number of votes at general meetings of the Company as it would have if the Loan Notes had converted. The rights attaching to the ‘B’ Share will fall away once the Loan Notes have been converted.
As announced on 27 April 2009, the Company raised £600,000 by way of a placing and has entered into a £5.0 million standby equity distribution agreement (“SEDA”) with YA Global Master SPV Ltd, which was advised by Yorkville Advisors, LLC. The SEDA enables the Company, at its discretion during the next 32 months, to draw down funds in tranches in exchange for the issue of new Ordinary Shares on terms related to the prevailing market price at the time of each draw down.
The Loan Notes are convertible at the option of the note holder into 577,275,643 Ordinary Shares. Prior to the recent fundraising, the Company had 212,016,203 Ordinary Shares in issue. This figure has been increased to 245,316,533 as a result of the fundraising and will increase further as cash is drawn on the SEDA. The percentage of the Ordinary Shares owned by FBC Sarl on conversion of the Loan Notes in full would be 70.18 % prior to any draw downs on the SEDA. Any issue of Ordinary Shares pursuant to the SEDA will subsequently reduce Cyrus’ percentage holding on conversion of the Loan Notes.
Unless previously converted, the Loan Notes are redeemable on 31 December 2012 and may, at the note holder’s option be redeemed prior to that date upon a change of control and upon a future issue of shares or convertible loan notes which raises in excess of $5m. In the event of an early redemption, the Loan Notes will be redeemed at 105% of par value.
The Loan Notes will have the benefit of the same security as the Cyrus Facility until such time as the Company secures bank finance on terms satisfactory to the note holders.
Whilst the Loan Notes remain outstanding the note holders holding a majority of the loan notes will have the right to approve the identity of no less than three directors of the Company and the maximum number of directors will not exceed six. A representative of Cyrus, subject to approvals, will join the board. A further announcement will be made at the appropriate time.
As part of the terms of the issue of the Loan Notes, 37.5 million warrants exercisable at 20p, that were issued to Cyrus as part of the Cyrus Facility, will be cancelled.
A general meeting of the Company (“GM”) will be convened to approve, inter alia, the Loan Notes, the Waiver (as defined below) and the proposed amendment to the Company’s articles of association. Further details of the Loan Notes will be set out in the notice convening the GM.
Consolidation of Ordinary Shares
As part of the restructuring of the Company, the board of directors
proposes to consolidate the Ordinary Shares on the basis of one new
ordinary share with a par value of 10p for every ten existing ordinary
shares with a par value of 1p (“Consolidation”). A resolution to
approve the consolidation will be proposed at the GM. If approved by
shareholders at the GM, the consolidation will reduce the number of
issued shares in the capital of the Company but will not materially
affect the percentage shareholdings referred to in this announcement.
The City Code on Takeovers & Mergers (the Code”)
At present, Cyrus does not have a shareholding in the Company.
If the issue of the Loan Notes is approved by shareholders, upon conversion in full of the Loan Notes, FBC Sarl would hold 577,275,643 Ordinary Shares (before consolidation), representing a maximum holding of 70.18% of the current issued share capital of the Company. Under Rule 9 of the Code, any person or group of persons acting in concert who acquires an interest (as defined in the Code) in shares which, taken together with shares in which he is interested and in which persons acting in concert are interested, carry 30 per cent. or more of the voting rights of a company which is subject to the Code is normally required by the Panel on Takeovers and Mergers (the “Panel”) to make a general offer to shareholders to acquire the balance of the shares not held by such person or group of persons acting in concert.
The Company is, therefore, proposing to seek a waiver of the obligations that would otherwise be placed on Cyrus, pursuant to Rule 9 of the Code, at the GM (the “Waiver”). The issue of the Loan Notes is conditional upon the grant of the Waiver and its approval by shareholders.
Shareholders should be aware that, if the Waiver was to be approved by shareholders and the Loan Notes converted in full, FBC Sarl would hold more than 50% of the voting rights attaching to the Company’s issued share capital. Accordingly, FBC Sarl may be able to increase its aggregate interest in shares without incurring any further obligation under Rule 9 of the Code to make a general offer.
Conditions
The issue of the Loan Notes is conditional, inter alia, on the Company convening the GM at which shareholders approve:
Completion of the issue of the Loan Notes is also conditional on the Panel granting the Waiver and the Panel approving the circular convening the GM.
Further Announcements
A further announcement will be made in due course when a circular to shareholders to convene the GM is dispatched.
CEO Nicholas Hall commented:
“The refinancing of the Cyrus debt preserves the integrity of the Company at this most critical time.
Cyrus has become our most important strategic partner and, thanks to its support, we are now able to progress the acquisition and reopening of the Nalunaq gold mine, continue the development of the Black Angel and create a platform from which we can build a specialist mining business focused on Greenland.”
The Company announces that it has issued 3,300,330 new ordinary shares of 1p each in the Company ("Ordinary Shares") at 3.03p per share as consideration for fees incurred following the fundraising announced on 27 April, 2009.
Application will be made for the admission of 3,300,330 new Ordinary Shares to be admitted to trading on AIM. It is expected that admission will become effective and that dealings will commence on 7 May, 2009. On admission, the Company will have 245,316,533 Ordinary Shares in issue.
For the purposes of the transitional provisions of the Financial
Services Authority's Disclosure and Transparency Rules, the total
number of ordinary shares of 1p each in the capital of the Company in
issue as at the date of this notice is 242,016,203 with each share
carrying the right to one vote. There are no shares held in treasury.
Therefore, the total number of voting rights in the Company is 242,016,203.
The above figure 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 to their interest
in, the share capital of the Company under the Disclosure and
Transparency Rules.
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