Baker Steel Resources Trust Ltd Portfolio Update (2775B)
April 03 2017 - 2:01AM
UK Regulatory
TIDMBSRT
RNS Number : 2775B
Baker Steel Resources Trust Ltd
03 April 2017
BAKER STEEL RESOURCES TRUST LIMITED
(Incorporated in Guernsey with registered number 51576 under the
provisions of The Companies (Guernsey) Law, 2008 as amended)
3 April 2017
Partial Realisation of the Company's holding in Polar
Acquisition Limited and associated Related Party Disclosure
Baker Steel Resources Trust Limited (the "Company") announces
that its 64% owned investment Polar Acquisition Limited ("PAL") has
today agreed to issue a zero coupon US$4.75 million convertible
loan to discretionary clients of Sprott Inc, the Toronto listed
fund management company well known for its expertise in natural
resources investment and its interest in silver.
The proceeds of the convertible will be utilised to offer to buy
back up to 10% of the shares in PAL proportionate to current
shareholdings. This reflects the fact that PAL does not require any
further funds for the foreseeable future following the announcement
on 19 January 2017 of the US$3 million subscription by Polymetal
International PLC ("Polymetal") for a 10% interest in PAL's
subsidiary, Polar Silver Resources Limited ("Polar Silver") and its
commitment to fund the feasibility study into the Prognoz Silver
project.
The PAL share buyback will be undertaken at a valuation which
represents a 13.6% premium to the current carrying value in the
Company's books and a significant uplift from the price paid by the
Company to increase its interest via PAL in the Prognoz silver
project pursuant to the restructuring offer made by the Company in
2016.
The Company plans to tender at least its proportionate share of
the buyback and will therefore receive at least US$3.0m in cash
from the buyback, which is anticipated to be completed by mid-April
2017.
In return for its commitment to fund the drilling works and
technical studies to complete a JORC Reserve statement and
Feasibility Study on Prognoz, Polymetal holds an option (the
"Option") to acquire PAL's 90% interest in Polar Silver on
pre-agreed terms at any time up to 31 March 2020. The PAL
convertible is convertible at any time by the holder into a 10%
equity interest in PAL. It is anticipated that Sprott will convert
the PAL convertible loan into PAL shares upon exercise by Polymetal
of the Option but if not converted is repayable in cash or shares
by 31 December 2020.
The Company welcomes the transaction as it is a first step
towards achieving its stated aim of reducing the proportion of its
net assets represented by PAL. It also provides cash at an
opportune moment in the mining cycle for new investment and/or
share buybacks, and will take place at a premium to the carrying
value as at 28 February 2017, following the significant uplift in
carrying value at 31 December 2016. The addition of Sprott as a
specialist institutional investor in PAL is also welcomed and a
further endorsement of the Prognoz silver project's potential.
Under the Listing Rules certain PAL shareholders, namely Genus
Natural Resources Fund, Baker Steel Capital International, Sonya
Trust, Northcliffe, AWR Lloyd, Rock Capital and Baker Steel Capital
Managers (Cayman), holding in aggregate 9.68 per cent. of PAL's
issued share capital, are deemed to be related parties to the
Company and as such the proposed PAL share buyback falls under the
related party provisions of LR11. Further, given the size of the
buyback the potential related party transaction falls under LR
11.1.10R (Modified requirements for smaller related party
transactions).
Further details of the Company and its investments are available
on the Company's website www.bakersteelresourcestrust.com
Enquiries:
Baker Steel Resources Trust Limited +44 20 7389 8237
Francis Johnstone
Trevor Steel
Numis Securities Limited +44 20 7260 1000
David Benda (corporate)
James Glass (sales)
The Net Asset Value ("NAV") figure stated is based on unaudited
estimated valuations of the underlying investments and not
necessarily based on observable inputs. Such estimates are not
subject to any independent verification or other due diligence and
may not comply with generally accepted accounting practices or
other generally accepted valuation principles. In addition, some
estimated valuations are based on the latest available information
which may relate to some time before the date set out above.
Accordingly, no reliance should be placed on such estimated
valuations and they should only be taken as an indicative guide.
Other risk factors which may be relevant to the NAV figure is set
out in the Company's Prospectus dated 26 January 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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