TIDMATM
RNS Number : 3513G
Andrada Mining Limited
18 July 2023
18 July 2023
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in
the United Kingdom pursuant to the European Union (Withdrawal) Act
2018. Upon the publication of this announcement via Regulatory
Information Service (RIS), this inside information will be in the
public domain.
Andrada Mining Limited
("Andrada" or the "Company")
Issue of unsecured convertible loan notes to raise GBP7.7million
(c.US$10 million)
Commissioning of the bulk sampling plant and tantalum circuit
has commenced
Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the African
technology metals mining company with a portfolio of mining and
exploration assets in Namibia is pleased to announce that it has
raised GBP7.7million (c.US$10million) through the issue of 77
unsecured, convertible loan notes of GBP100,000 each (the "Loan
Notes") to new and existing investors. The Company has also issued
the holders of the Loan Notes two warrants for every GBP1 of Loan
Note held. Each warrant enables the holder to subscribe for one
ordinary share in the Company (the "Warrants"). More details of the
Loan Notes and the Warrants are set out below.
The Company is pleased to confirm that it has also completed the
construction phase of the bulk sampling plant and tantalum circuit.
Commissioning has commenced, in accordance with the timetable
detailed in the announcement dated 22 May 2023.
HIGHLIGHTS
-- Completion of construction, and commencement of
commissioning, of the lithium bulk sampling plant;
-- Completion of construction, and commencement of
commissioning, of the tantalum production circuit; and
-- GBP7.7 million (c US$10 million) raised through the issuance
of unsecured convertible Loan Notes. Money raised will be used for
the expansion of the tin, tantalum, and lithium exploration and
production circuits, in line with the Company's stated objectives,
and for working capital purposes.
Anthony Viljoen, Chief Executive Officer, commented:
"The completion of the construction phase of the lithium bulk
sampling facility is an important milestone for Andrada, as it
allows the Company to advance its exciting lithium expansion
programme. The team on the ground has worked extremely hard to
achieve this goal and on behalf of the Board, I would like to
extend our sincere appreciation.
"I am also pleased to announce the Company has raised
GBP7.7million via the issue of Loan Notes. The raise demonstrates
the strong support that Andrada has from its existing shareholders
and other investors. The proceeds are to be used for ongoing
capital expansion programmes related to the lithium and tantalum
development. In addition, the funds will be used for working
capital purposes as Andrada progresses its exploration programme,
and commences a lithium feasibility study, to further consolidate
its competitive lithium advantage within the Erongo region of
Namibia. These developments underpin the Directors' belief that
Andrada is well-positioned to be a significant supplier of
technology metals globally and to be the first AIM-listed lithium
producer."
RATIONALE FOR THE CONVERTIBLE LOAN NOTES
The Directors believe that the completion of the lithium bulk
sampling plant and tantalum circuit construction are key milestones
in Andrada's pathway to becoming a multi-technology-metal producer.
The Directors also believe that the Loan Notes offer the least
dilutive method for the Company to achieve its objectives. This is
particularly important whilst the funding from the Development Bank
of Namibia ("DBN") and a fund managed by Orion Resource Partners
("Orion") is being finalised.
As set out in the announcement of 23 June 2023, the funding from
DBN is ring fenced to be applied to the continuous improvement of
current plant operations. The Directors believe the DBN funding
will be drawn down by the end of July 2023 or early August 2023.
The Directors remain encouraged by the progress of implementing the
Orion funding (see announcement dated 15 September 2022). The
original timeline has extended due to negotiations with existing
lenders. The Directors believe the GBP7.7million (c.US$10million)
Loan Notes and the GBP4.4million (c.US$5.8 million ) senior secured
debt facility from DBN should be sufficient to cover all Andrada's
financing requirements for the next 15 to 18 months.
In summary, while other financing packages are delayed, further
funding is required to progress the Company's work programmes and
projects at full pace. The net proceeds from the issue of the Loan
Notes will be mainly utilised for funding the commissioning of the
bulk sampling plant as well as the tantalum circuit. Other uses are
on-going exploration, metallurgical testing programmes and working
capital. In addition, the funds will enable the commencement of a
lithium feasibility study which is fundamental to determining the
detailed design of Andrada's next transformative growth.
SUMMARY OF THE CONVERTIBLE LOAN NOTE INSTRUMENT
As set out above, Andrada will issue 77 unsecured convertible
Loan Notes of GBP100,000 each on 21 July 2023. The term of each
Loan Note is three years up to 20 July 2026 and interest accrues at
a rate of 12% per annum. The Loan Notes can be converted by mutual
agreement into ordinary shares in the Company at the conversion
price of 9.45pence ("p") being a 35% premium to the 7p reference
price based on the 30-day Volume Weighted Average Price at the date
of execution of the Loan Notes. The Company has the option to
redeem the Loan Notes early but is required to pay an early
redemption premium of 20% on the value of the loan notes being
redeemed, in addition to the outstanding interest. If the Company
triggers an early redemption the Loan Note holders also have the
option to convert the Loan Notes into ordinary shares in the
Company at the conversion price of 9.45p. There are certain other
conditions in which the Loan Notes may be redeemed. The Loan Notes
are not quoted.
SUMMARY OF THE WARRANTS
For every GBP1.00 of Loan Notes subscribed for, each Loan
Noteholder(s) will receive two warrants. Each warrant enables the
holder to subscribe for one Ordinary Share at a subscription price
of 9.45p (being the same as the Conversion Price) (together, the
"Warrants"). The Warrants are exercisable at any time from the date
of issue for a period of two years. The total number of warrants
issued by the Company to subscribers of the Loan Notes is
15,400,000.
Hannam & Partners acted as sole broker to the Company in
relation to the Loan Notes.
RELATED PARTY TRANSACTION
The Orange Trust (New York) (the "Orange Trust"), a shareholder
of Andrada holding 15.62% of the issued share capital of the
Company has subscribed for 40 Loan Notes for a total consideration
of GBP4million (cUS$5million). In addition, as part of the
transaction detailed above, the Orange Trust will receive warrants
over 8,000,000 ordinary shares in the share capital of the Company.
As the Orange Trust is a substantial shareholder of the Company,
the participation by the Orange Trust in this transaction is deemed
to be a related party transaction pursuant to AIM Rule 13 of the
AIM Rules for Companies. The Company's Directors consider, having
consulted with Andrada's Nominated Adviser, WH Ireland Limited,
that the terms of this transaction are fair and reasonable insofar
as the shareholders of the Company are concerned.
STRATEGIC PROCESS UPDATE
The strategic process for the appropriate partner for the
lithium development is progressing as planned. Discussions with
various interested parties are on-going and further updates will be
provided in due course, as required.
Andrada Mining Limited
Anthony Viljoen, CEO +27 (11) 268 6555
Sakhile Ndlovu, Head of Investor investorrelations@andradamining.com
Relations
Nominated Adviser
WH Ireland Limited
Katy Mitchell +44 (0) 207 220 1666
Corporate Advisor and Joint Broker
H&P Advisory Limited
Andrew Chubb
Jay Ashfield
Matt Hasson +44 (0) 20 7907 8500
Stifel Nicolaus Europe Limited
Ashton Clanfield
Callum Stewart
Varun Talwar +44 (0) 20 7710 7600
Tavistock Financial PR (United +44 (0) 207 920 3150
Kingdom) andrada@tavistock.co.uk
Emily Moss
Catherine Drummond
Adam Baynes
About Andrada Mining Limited
Andrada Mining Limited has a vision to create a portfolio of
globally significant, conflict-free, production and exploration
assets. The Company's flagship asset is the Uis Mine in Namibia,
formerly the world's largest hard-rock open cast tin mine.
Andrada has three mining licences namely;
-- ML134 on which Uis Mine is located.
-- ML133 (Nai Nais / Lithium Ridge).
-- ML129 (B1C1 / Spodumene Hill).
The main minerals in these mining licences are tin, lithium and
tantalum. Additionally, the Company has an exploration licence
EL5445 (Brandberg West) on which the main minerals are tin, copper
and tungsten. The Company has set a mineral resource target of 200
Mt to be delineated within the next 5 years. The substantial
mineral resource potential allows the Company to consider economies
of scale.
Andrada is managed by a board of directors with extensive
industry knowledge and a management team with deep commercial and
technical skills. Furthermore, the Company is committed to the
sustainable development of its operations and the growth of its
business. This is demonstrated by how the leadership team places
significant emphasis on creating value for the wider community,
investors, and other key stakeholders. Andrada has established an
environmental, social and governance system which has been
implemented at all levels of the Company and aligns with
international standards. []
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