TIDMGBGR
RNS Number : 6288X
GoldBridges Global Resources PLC
20 November 2014
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, HONG
KONG, SOUTH AFRICA, AUSTRALIA, CANADA OR JAPAN OR IN ANY
JURISDICTION OTHER THAN THE UNITED KINGDOM WHERE TO DO SO WOULD
CONSTITUTE A CONTRAVENTION OF THE RELEVANT LAWS OR REGULATIONS OF
SUCH JURISDICTION.
For immediate release
20 November 2014
Admission to the Standard Segment of the Official List and to
trading on the Main Market of the London Stock Exchange
Notice of Cancellation of Trading on AIM and
Publication of Prospectus
London - Goldbridges Global Resources plc ("Goldbridges" or the
"Company" or together with its subsidiaries the "Group" - LSE:
GBGR), an independent gold mining, exploration, development and
production company with assets in Kazakhstan, today announces
proposals to migrate trading in its ordinary shares (the
"Shares")from AIM to London Stock Exchange's Main Market for listed
securities. A prospectus (the "Prospectus") has been published
today in connection with the admission of its entire issued share
capital, comprising 2,211,342,130 Shares to the standard segment of
the Official List of the United Kingdom Listing Authority ("UKLA")
and to trading on the London Stock Exchange's Main Market for
listed securities ("Admission"). Terms defined in this announcement
have the meaning given in the Prospectus.
Subject to approvals from the UKLA and the London Stock Exchange
it is expected that Admission will become effective and that
dealings in the Shares on the London Stock Exchange's Main Market
will commence at 8.00 a.m. GMT on 18 December 2014. Pursuant to
Rule 41 of the AIM Rules, the Company hereby gives notice that
trading in the Company's Shares on AIM will be cancelled on the
same day with effect from 8.00 a.m. GMT.
The Company is not raising any funds or issuing any new shares
in connection with Admission. No Shares have been offered or
marketed to the public in the UK or elsewhere in connection with
Admission or the publication of the Prospectus. The Company's TIDM
code on the London Stock Exchange will remain 'GBGR'.
The Board is strongly of the belief that the standard segment of
the Official List and the London Stock Exchange's Main Market are
the most appropriate platform for the continued growth and long
term development of the Company.
The Board believes that it is important to continue to increase
the profile of the Group. The Company was able to announce a key
milestone on 17 November 2014 releasing details of the CPR report
which materially upgraded the appraised reserve estimate to
2.26Moz. The Company is now focussed on delivering the next stage
of its plans and ensuring that Production at the current mine can
grow to over 100,000 ounces per annum.
In addition, it is the Boards' aim to seek to assist the
liquidity of the Shares and to provide a framework in which to
attract a greater range of potential investors for the Company.
Commenting on today's announcement, Aidar Assaubayev, Chief
Executive of the Company said:
"It gives the Board great pleasure to be announcing the
transition from AIM to the Main Market of the LSE today.
The move up to the Main Market reflects the considerable
progress that the Company has enjoyed in the last two years. It
also provides an attractive platform for international investors to
gain exposure to low cost gold production in Central Asia.
I remain grateful to the directors and employees and also for
the continued support of our partners, our shareholders and the
broader Kazakh stakeholders"
Information on the Group
The Group is a gold mining, exploration and development group
based in Kazakhstan. Whilst the Group was initially established to
develop and operate the Sekisovskoye gold mine in the East
Kazakhstan Region, it is now actively targeting additional gold
mining opportunities in Kazakhstan, including the prospective
Karasuyskoye ore field which adjoins the Sekisovskoye deposit.
The Group's principal asset is the exclusive right to explore
and extract gold and silver ore from the Sekisovskoye deposit in
the Glubokovsky District of the East Kazakhstan Region. The Company
holds a 100% shareholding in DTOO Gornorudnoe Predpriatie
Sekisovskoye ("DGPS") which holds a subsoil use contract in
relation to the Sekisovskoye deposit, covering a total area of
0.855km(2). The subsoil use contract is valid until 2020 and the
Group currently intends to seek to extend the contract in
accordance with its terms. The Company also holds a 100%
shareholding in DTOO Altai Ken--Bayitu LLP ("AKB") which owns and
operates the processing plant at the Sekisovskoye deposit. The
Sekisovskoye deposit is located at the village of Sekisovka,
approximately 40km north of the town of Ust--Kamenogorsk, the
capital city of the East Kazakhstan Region. The current operation
is exploiting two open pits where the near--vertical deposits
extend to the surface. The open pits are nearing their end of life
in 2016, and the Group is developing an underground extension to
exploit the deposits to depth. The Group intends that the
Sekisovskoye deposit shall become a selective--mining underground
operation.
The Group produced approximately 31Koz of gold and 35Koz of
silver in the year ended 31 December 2013 and approximately 13Koz
of gold and 17Koz of silver in the six months ended 30 June
2014.
As at 31 May 2014, the Group's proven and probable reserves
consisted of 2.3Moz of gold and 3.0Moz of silver, and the Group's
measured, indicated and inferred resources consisted of 5.1Moz of
gold and 3.5Moz of silver, in each case as classified in accordance
with JORC.
In the year ended 31 December 2013, the Group's consolidated
revenue was $42.4 million and its EBITDA was US$(0.6) million. In
the six months ended 30 June 2014, the Group's consolidated revenue
was US$16.7 million and its EBITDA was US$5.9 million.
In 2013, the Group acquired certain historic geological
information pertaining to the Karasuyskoye ore fields. The
Karasuyskoye ore fields cover an area of approximately 198km(2)
adjacent to the Group's current concessions and production
facilities, and offer the potential for both open pit and
underground mining. The Group has applied to the Competent
Authority for a subsoil use contract covering the additional mining
area. The Group applied for the contract on 15 August 2014, and as
at the date of the Prospectus has not received the outcome of the
application.
Key Strengths
The Directors believe that the key strengths of the Group are as
follows:
Transformational Growth from Sekisovskye Deposit to 100 Koz
p.a.
The Group has conducted open pit mining operations at the
Sekisovskye deposit since 2000 and in 2013 produced approximately
31Koz gold and 35Koz silver. In 2013, the Group introduced a new
capital expenditure plan for development of the underground section
of the Sekisovskoye deposit that aims to increase gold production
to around 100Koz per annum by 2017, which would represent a
compound annual growth rate in production of approximately 30 per
cent. from 2013.
This transformational organic growth profile from the Group's
core asset is expected to be delivered via access to proven
technology for gold recovery and utilizing a processing plant and
other surface infrastructure that is already in place, reducing
overall execution risk of the project.
Scale, Independently Appraised Reserves and Resources
As at 31 May 2014, the Group's proven and probable reserves
consisted of 2.3Moz of gold and 3.0Moz of silver, and the Group's
measured, indicated and inferred resources consisted of 5.1Moz of
gold and 3.5Moz of silver, in each case as classified in accordance
with JORC.
The JORC compliant Competent Persons Report was published by the
Group in November 2014 and has validated the management team's
understanding of the geology and mining potential of the
Sekisovskoye deposit.
Low Cost of Production and Robust Project Economics
The Sekisovskye deposit is expected to benefit from a highly
attractive cost of production positioning the Group amongst the
lowest cost producers in the industry with projected average total
life of mine operating costs of US$518/oz.
This advantageous cost positioning drives robust project
economics reflected in the appraised net present value of
Sekisovskye included in the Competent Persons Report of US$287
million assuming a gold price of US$1,273/oz and a discount rate of
9.3 per cent. The independent analysis included in the Competent
Persons Report also shows the resilience of the project to lower
gold prices.
Growth Beyond Core Asset
In addition to the effective execution of the development of
Sekisovskoye, the Group is focused on the acquisition, development
and monetization of additional mineral licences in Kazakhstan and
adjacent countries in Central Asia.
In 2013, the Group acquired certain historic geological
information pertaining to the Karasuyskoye ore fields adjacent to
Sekisovskoye. Owing to its proximity and likely similar
mineralization, if the Group's application for a subsoil use
contract with respect to the Karasuyskoye ore fields is successful,
then the Group anticipates that Karasuyskoye will be able to supply
additional ore for treatment at the existing facilities. The
geological data indicates that there are several mineralized zones
and the Group believes that Karasuyskoye has the potential to
contain significant mineral resources.
Supportive Shareholder and Management Team with Proven Track
Record
The Group's controlling shareholder is African Resources Limited
which is ultimately beneficially owned by the Assaubayev family.
The Assaubayev family has a strong knowledge of the Kazakh gold
industry, understanding of the domestic regulatory requirements and
good reputation. Additionally, the Group's senior management team
consists of experienced individuals with extensive careers in the
mining industry. The management team to date has successfully
increased the Group's reserves, production and revenue while
decreasing the cost base on a per ounce basis.
The Group believes that the support of the controlling
shareholder and management experience and record of accomplishments
from early stage exploration, development and producing assets
positions the Group to maximize the value of its existing
operations, development projects and grow the resource base.
Strategy
The Group's strategy is focused on delivering transformational
organic growth from the assets in the existing portfolio in tandem
with pursuing the acquisition of additional exploration and
development opportunities. Through this combination of organic and
inorganic growth, the Group aims to become one of the largest gold
mining companies in Central Asia and deliver value for its
shareholders via a sustainable strategy.
Effective execution of Sekisovskoye expansion to become a 100Koz
p.a. gold producer
The Group's development strategy focuses on maximizing the
potential of Sekisovskoye via delivery of the underground project
to reach gold production of around 100Koz per annum by 2017. Post
2017, the Group expects to be able maintain production from
Sekisovskye at greater than 100Koz per annum for the life of the
mine, which is expected to be more than 22 years.
Validate Value within the Existing Asset Portfolio
Within the Sekisovskye deposit, the Group will further expand
the reserves and resources estimates within the existing ore zones
and at greater depth by further exploration and feasibility studies
targeting conversion of inferred resources into reserves.
If the Group's application for a subsoil use contract with
respect to the Karasuyskoye ore fields is successful, the Group
additionally expects to engage an independent company to complete a
JORC-compliant competent persons report on the Karasuyskoye ore
fields to validate management's assessment of the resources
potential of the fields.
Combining the development of Karasuyskoye with the Sekisovskye
underground mine has the potential, management believes, to create
a large integrated mining operation combining both open pit and
underground mining into a single modern gold processing
facility.
Deliver Value-accretive Growth via Expansion of the Asset
Portfolio
The Assaubayev family has a proven track record of sourcing a
pipeline of high quality value accretive transactions and the Group
intends to leverage this favorable controlling shareholder position
and management expertise to acquire additional high quality mineral
licences in Kazakhstan and other countries in Central Asia.
The Group plans to review existing geological data on other
precious metals deposits in Kazakhstan and other countries in
Central Asia in order to utilize the experience of the Group's
employees to seek to acquire the mining rights or enter into joint
ventures in relation to deposits which have already been explored
during the Soviet Union era and which, the Group believes, have the
potential to contain additional reserves and resources.
Commitment to Socially Responsible Sustainable Development,
Community Relations and Corporate Governance
The Group believes operational excellence to be integral to the
success of its business and will continuously seek to improve its
compliance with health, safety and environmental requirements. It
intends to continue to work closely with those communities that it
affects and aspires to be a good and respected neighbour to these
communities. As part of this strategy, the Group is committed to
transparency and strong corporate governance standards.
Reasons for moving to the Official List
The Board of the Company believes that the Group has now reached
a size and stage of maturity at which the standard segment of the
Official List will be the most appropriate platform for future
growth. The Directors believe that the move will result in the
Group benefiting from the increased potential investor base, a
higher profile and an increase in the liquidity of its Shares,
which will benefit investors and the Group alike.
Capital Expenditures and Resources
Taking into account the planned capital expenditures outlined
below, the Company is of the opinion that the Group does not have
sufficient working capital for its present requirements, that is,
for at least the next 12 months from the date of this document.
The Company is currently undertaking a significant capital
expenditure and development plan with respect to the construction
of underground shafts at the Sekisovskoye mine. Two underground
shafts are to be constructed to a depth of 1000m that will be used
to extract the ore in the most commercially efficient manner. The
estimated capital expenditure for development of the shafts,
equipment and further working capital is expected to be in the
region of US$130m, which the Group expects will largely be incurred
prior to 2017. Based on the current plans, construction is expected
to commence in 2015, with construction of both shafts taking in the
region of 24 months. During this period, the current transport
declines will be used to access the ore from underground. Of this
anticipated future capital expenditure, the Company currently
intends to incur a further US$ 39.3 million of capital expenditure
prior to 31 December 2015.
The Group's existing cash resources totaled US$4.9 million as at
the date of the Prospectus. The Company does not expect to generate
sufficient free cash flow during the year ending 31 December 2015
in order to allow it to fund its 2015 capital expenditure plans
entirely through cash generated through operating activities
coupled with existing cash resources. The Company anticipates that
a shortfall of around US$35 million of its capital expenditure plan
will require external funding, and this shortfall will materialize
on or around the second quarter of 2015.
The Company's majority shareholder, African Resources Limited,
has advised the Company that it is prepared to provide equity or
debt financing to the Company on arm's length terms up to an amount
in excess of the cash shortfall. Alternatively, in order to address
this potential shortfall, the Company may seek and obtain
additional financing in the form of third party debt financing. The
Company's preferred funding of any potential shortfall is via
shareholder equity or debt financing or third party debt financing.
However, if additional debt financing is not available, or not
available on appropriate terms, the Company would also look to
achieve funding via a further equity or equity-linked financing.
Failure to obtain additional financing may result in the Group
being unable to meet its capital expenditure plans, which could
delay its ability to successfully exploit and monetise the
underground mine at Sekisovskoye. Given that the life of the open
pit mine at Sekisovskoye is anticipated to end in 2016, such a
delay could have a material adverse effect on the business,
prospects, financial condition and results and operations of the
Group.
Copies of the Prospectus will shortly be available on the
Company's website at:
http://goldbridgesplc.com/investor-relations/reports.html
The Prospectus has been submitted to the National Storage
Mechanism and will be available for inspection within 24 hours at
http://www.Hemscott.com/nsm.do.
Enquiries:
Goldbridges Global Resources PLC +44 (0) 207 932 2455
Aidar Assaubayev, Chief Executive Officer
Ken Crichton, Chief Technical Officer and Executive Director
Ashar Qureshi, Non-Executive Director
Strand Hanson Limited +44 (0) 20 7409 3494
Andrew Emmott / James Spinney / Ritchie Balmer
Blytheweigh +44 (0) 7816 924626
Tim Blythe
Further information about the Company is available at:
http://goldbridgesplc.com/
Disclaimer
This announcement contains certain forward-looking statements.
These statements are made by the Directors in good faith based on
the information available to them up to the time of their approval
of this announcement but such statements should be treated with
caution due to inherent uncertainties, including both economic and
business factors, underlying such forward-looking information. This
announcement has been prepared solely to provide additional
information to shareholders to assess the Group's strategies and
the potential for those strategies to succeed. This announcement
should not be relied on by any other party or for any other
purpose.
The distribution of this press release may be restricted by law
in certain jurisdictions. Persons into whose possession this
document comes are required to inform themselves about and to
observe any such restrictions.
This press release does not, and shall not, in any circumstances
constitute a public offering of shares (the "Securities") in
Goldbridges Global Resources PLC (the "Company") or an invitation
to the public in connection with any offer. No action has been or
will be taken in any country or jurisdiction that would permit a
public offering of the Securities, or the possession or
distribution of this press release or any other offering or
publicity material relating to the Securities in any country or
jurisdiction where action for that purpose is required. The
acquisition of the Securities may be subject to specific legal or
regulatory restrictions in certain jurisdictions. The Company takes
no responsibility for any violation of any such restrictions by any
person.
These materials are not an offer for sale of securities in the
United States. Securities may not be sold in the United States
absent registration with the United States Securities and Exchange
Commission or an exemption from registration under the U.S.
Securities Act of 1933, as amended or absent compliance with
applicable provisions of the U.S. Investment Company Act of 1940,
as amended. The Company does not intend to offer or sell any
Securities in the United States.
In any EEA Member State that has implemented the Prospectus
Directive, this communication is only addressed to and is only
directed at qualified investors in that Member State within the
meaning of the Prospectus Directive. The expression "Prospectus
Directive" means Directive 2003/71/EC (and amendments thereto,
including Directive 2010/73/EU, to the extent implemented in any
relevant Member State) and includes any relevant implementing
measure in the relevant Member State.
This document is only being distributed to and is only directed
at (i) persons who are outside the United Kingdom or (ii) to
investment professionals falling within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005 (the "Order") or (iii) high net worth companies, and other
persons to whom it may lawfully be communicated, falling within
Article 49(2)(a) to (d) of the Order (all such persons in (i), (ii)
and (iii) above together being referred to as "relevant persons").
Any person who is not a relevant person should not act or rely on
this document or any of its contents.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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