Tembo Gold Corp. (TSX VENTURE:TEM) (FRANKFURT:T23) ("Tembo" or the "Company")
announces that it has terminated its previously announced private placement in
the news release dated October 8, 2013 and is moving forward with a new private
placement on revised terms. The Company now proposes to complete a non-brokered
private placement (the "Financing") consisting of up to 82,500,000 units (the
"Units") at a price per Unit of C$0.10 for total gross proceeds of up to C$8.25
million. Each Unit will consist of one common share (each a "Share") and one
common share purchase warrant of the Company (each a "Warrant"). Each Warrant
will be exercisable to acquire one Share at a price of $0.12 per Share for a
period of three years from the issuance of the Units on the initial closing of
the Financing.
The main investors subscribing for Units under the Financing will be NAMF II
(Mauritius) Limited ("NAMF Mauritius") as to C$2,718,450, NAMF II South Africa
Partnership ("NAMF South Africa") as to C$781,550, Stratex Gold A.G. ("Stratex")
as to C$1,750,000 and Concept Capital Management Limited ("CCM") as to
C$1,000,000 (collectively, the "Investor Group"). Certain management members,
other insiders, and existing shareholders of the Company will also participate
in the Financing for up to C$2,000,000 of Units. None of the members of the
Investor Group are currently insiders of the Company. The previous subscription
agreement with the Investor Group has been mutually terminated and the Company
has agreed to enter into a new agreement with the Investor Group on the
principal terms summarized herein.
David Scott, President and CEO of Tembo, states, "We look forward to the
Investor Group's financial support through their investment, and importantly,
their input into the technical planning and corporate management of the Company.
We appreciate their continued support with the Financing."
About New Africa Mining Fund II
The New Africa Mining Fund II ("NAMF") is a junior mining venture capital fund
which provides capital for early to later stage exploration and mining
development projects in all minerals except diamonds and uranium, throughout
Africa. NAMF adheres to the common standards and investment practices which have
been developed and successfully followed by Private Equity investment firms in
other markets. Such practices include due diligence, strict attention to
corporate governance and sustainable development policies and a disciplined
approach to timely investment realization.
About Stratex International Plc. (AIM:STI)
Stratex is an AIM-listed company focused on the exploration and development of
gold and high-value base metals in Turkey, East Africa and West Africa. Listing
in January 2006, the company has been positioned to take advantage of the
current paucity of exploration activities and the resultant projected shortage
in supply of precious and base metals. Since inception Stratex has rapidly
amassed a portfolio of high-potential exploration licences in central and
western Turkey, Ethiopia and Djibouti, and Senegal and Mauritania, as a result
of the company's informed and aggressive approach to terrain analysis and
prospect identification.
About Concept Capital Management
CCM, is a private German based Asset Management Company focused on evaluating
and investing in Canadian resource companies through equity investments,
convertible bonds and gold, silver, and copper off-take agreements.
The strategic intention of the Investor Group is to prioritize continued
advancement of the exploration of the Tembo project with an aim to develop a
significant resource base. The Board of Directors considers that the
introduction of the Investor Group will favorably expand the potential capital
base of the Company going forward. As such the Board of Directors of Tembo
unanimously recommends that Tembo shareholders approve the change of control in
connection with the Financing. The Investor Group has advised Tembo that it
intends for Tembo to remain a public company after completion of the Financing.
Set out below are some additional key terms of the Financing:
-- The members of Investor Group are making their investment jointly;
-- The investors in the Investor Group will each be granted a right to
maintain their pro rata interest in the Company going forward, subject
to maintaining a minimum 5% equity interest in Tembo;
-- The Investor Group will act jointly and in concert in making its
investment and propose to enter into a private voting arrangement in
connection with their investment. It is anticipated that the voting
arrangement will provide for, among other things, the pooling of the
Shares owned by the Investor Group, the termination of the pooling
arrangement, the exercise of the collective voting rights, certain
restrictions on encumbrances, the establishment of a pooling agent and
certain rights with respect to the disposition of Shares;
-- The board of directors of Tembo will be reconstituted with a majority of
directors comprised of nominees of the Investor Group. It is proposed
that David Scott, Dave Anthony and John Seaman will resign as needed
from the Tembo board and Neil Gardyne, Bob Foster, Frank Hoegel of NAMF
Mauritius and NAMF South Africa, Stratex and CCM, respectively, will be
appointed to fill such vacancies. The appointment of all the nominees of
the Investor Group will constitute a "Change of Management" under the
rules of the TSXV. The biographies of the proposed directors are as
follows:
Neil Gardyne - Mr. Gardyne is a geologist with over 35 years' experience in
exploration and mining ventures in Southern Africa, and has been involved in
managing Private Equity/ Venture Capital funds focusing on early stage
exploration and mine development in South Africa for the past 12 years. He has a
BSc (Hons) degree in Geology from the University of Kwa-Zulu Natal, and is
currently a Director on the Board of NAMF II (Mauritius) Ltd, Decorum Capital
Partners (Pty) Ltd, and NAMF Corporate Advisory Services (Pty) Ltd.
Bob Foster (BSc, PhD, FIMM, CEng, FGS, CGeol) - Dr. Foster has 39 years of
experience as a professional economic geologist and has particular expertise in
the genesis of and exploration for gold deposits, having worked in Europe,
Central Asia, North and South America, and throughout Africa. Following ten
years in the mining industry in Rhodesia (now Zimbabwe) he joined Southampton
University in 1984 where he subsequently devoted more than 15 years to lecturing
and managing a large applied research group investigating ore-forming processes
and mineral exploration strategies before spending six years with UK-based
Exploration Consultants Ltd as Minerals Manager. He has published numerous
scientific and technical papers and has been an invited keynote speaker at very
many international scientific and technical conferences around the world. He is
Chief Executive of Stratex International Plc, an AIM-quoted company operating in
Turkey and East and West Africa.
Frank Hoegel - Mr. Hoegel currently serves as Chief Executive Officer of Peter
Beck Performance Fonds GbR, and sits on the advisory board of Concept Capital
Management, an Asset Management Company focused on evaluating and investing in
Canadian resource companies through equity investments, convertible bonds and
gold, silver, and copper off-take agreements. Mr. Hoegel completed his degree in
Master of Business Administration (FH) with a focus on Financial Management,
Banking and International Business & Management from the University of
Nurtingen, Germany.
The net proceeds of the Financing will be used by the Company to fund ongoing
exploration costs on its properties in Tanzania and for working capital
purposes. The following table sets forth the capitalization of the Company as at
June 30, 2013, the date of the most recent consolidated financial statements
filed by the Company, before and after giving effect to the maximum Financing.
The table should be read in conjunction with the consolidated financial
statements of the Company, including notes thereto, and the associated
management's discussion and analysis.
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As at June 30, 2013
after giving effect to
As at June 30, 2013 Financing(1)
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Cash and cash equivalents $ 80,494 $ 8,737,494
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Long-term debt $ 0 $ 0
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Common Shares 49,586,213 107,299,546
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Stock options 3,904,000 3,904,000
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Warrants 13,278,181 70,991,515
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Contributed surplus $ 8,874,788 $ 14,530,695
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Deficit $ (30,008,718) $ (30,008,718)
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Shareholders' equity $ 14,358,382 $ 23,015,382
----------------------------------------------------------------------------
Share Capital $ 35,138,792 $ 38,139,885
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Note:
1. Assumes gross proceeds of the Financing before deducting the estimated
expenses of the Financing and assumes that there is no exercise of
outstanding common share purchase warrants or stock options of the
Company. Does not include the Warrant Shares or any Shares issuable upon
exercise of outstanding common share purchase warrants and stock options
of the Company.
The Company currently has outstanding 49,586,213 Shares on a non-diluted basis,
and 65,047,512 Shares on a fully-diluted basis. The issuance of Units to the
Investor Group and assuming completion on the one hand, of the maximum Financing
and, on the other hand, the Investor Group financing on the other hand,
including those Shares of the Company currently held by the Investor Group, will
represent up to approximately 49.2% and 58.0%, respectively, of the issued and
outstanding Shares on a non-diluted basis and up to approximately 59.4% and
73.0%, respectively, of the issued and outstanding Shares assuming exercise of
the Warrants by the Investor Group. The completion of the Financing will result
in a change of control of Tembo and, accordingly, the Company will seek the
approval of shareholders in accordance with the policies of the TSXV. Following
the completion of the Financing, the Investor Group members will own:
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Ownership Percentage
Ownership Percentage if Only Investor
Investor Group if Maximum Financing Group Financing
Member Shares and Warrants Completed(1)(3) Completed(2)(3)
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NAMF II South 5.9% Undiluted 7.0% Undiluted
Africa 7,815,500 Shares 11.2% Partially 13.0% Partially
Partnership 7,815,500 Warrants Diluted Diluted
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NAMF II 20.6% Undiluted 24.3% Undiluted
(Mauritius) 27 184 500 Shares 34.1% Partially 39.0% Partially
Limited 27 184 500 Warrants Diluted Diluted
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Stratex Gold 13.2% Undiluted 15.6% Undiluted
A.G. 17,500,000 Shares 23.4% Partially 27.0% Partially
17,500,000 Warrants Diluted Diluted
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Concept
Capital 9.5% Undiluted 11.2% Undiluted
Management 12,500,000 Shares 15.8% Partially 18.4% Partially
Limited 10,000,000 Warrants Diluted Diluted
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Notes:
1. Calculated on the basis of the maximum Financing of C$8.25M.
2. Calculated on the basis of the Investor Group Financing of C$6.25M only.
3. The partially diluted percentages were calculated assuming the exercise
of each individual Investor Group member's Warrants.
All the securities will be subject to a four month and one day hold period from
the applicable closing date(s) of the Financing. The Company may pay a finder's
fee in connection with the Financing in accordance with the policies of the
TSXV, subject to the approval of the TSXV, which may include up to $50,000 in
cash and up to 3,399,332 in Units in lieu of a cash payment.
The Financing remains subject to a number of conditions, including without
limitation, the Investor Group entering into a subscription agreement with the
Company, the Company obtaining the applicable shareholder approval in accordance
with the policies of the TSXV by no later than Friday, November 22, 2013 and
conditional approval of the Financing by the TSXV by no later than Tuesday,
November 26, 2013.
The Board of Directors of the Tembo unanimously recommends that shareholders
consent to the change of control in connection with the Financing. Shareholders
are strongly urged to download and execute the Shareholder Consent Form,
available by following this link, or by visiting the Company`s website at
www.tembogold.com and return it to the Company by email at
mcernovitch@tembogold.com.
About Tembo Gold Corp.
Tembo Gold Crop (TSX VENTURE:TEM) is a Canadian publicly-listed mineral
exploration company with a 100% interest in the Tembo Gold Project which is
located adjacent to African Barrick's Bulyanhulu Gold Mine in the prolific Lake
Victoria Greenstone belt in Tanzania. Tembo's focus is the discovery and
development of gold projects in Africa. The Company's exploration strategy is to
discover mineral resources as well as continue to look for additional
opportunities that can bring value to the Company and shareholders.
On Behalf of the Board of Directors of Tembo,
David Scott, President & CEO
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT
TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE
Cautionary Note Regarding Forward-Looking Statements
Certain information set out in this news release constitutes forward-looking
information. Forward looking statements are often, but not always, identified by
the use of words such as "seek", "anticipate; "plan", "continue; "estimate;
"expect", "may, "will", "intend", "could", "might", "should", "believe" and
similar expressions. This news release contains forward-looking statements in
respect of certain anticipated goals and expectations in connection with the
Financing, including, without limitation, the use of the net proceeds from the
Financing, the receipt of applicable shareholder approval in connection with the
change of control of the Company, the anticipated voting arrangement to be
entered into by the Investor Group, the anticipated consolidated capitalization
of Tembo after giving effect to Financing, the anticipated reconstitution of the
board of directors of Tembo, the anticipated approval of the TSXV for the
Financing and the expectation that Tembo will remain a public company following
the change of control. Forward-looking statements are based upon the opinions
and expectations of management of the Company as at the effective date of such
statements and, in certain cases, information provided or disseminated by third
parties. Although the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, and that
information obtained from third party sources is reliable, they can give no
assurance that those expectations will prove to have been correct. The
forward-looking statements contained herein after provided for the purpose of
providing readers with the Company's expectations and goals in connection with
the Financing, and may not be suitable for other purposes. Readers are cautioned
not to place undue reliance on forward-looking statements.
FOR FURTHER INFORMATION PLEASE CONTACT:
Tembo Gold Corp.
Marc Cernovitch
Director & VP Business Development
416.619.9010
mcernovitch@tembogold.com
www.tembogold.com
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