TIDMHER
RNS Number : 8733M
Herencia Resources PLC
19 October 2016
Herencia Resources plc
("Herencia" or "the Company")
Herencia Secures up to US$200,000 Funding
Summary
Herencia is pleased to announce that today it has executed
legally binding term sheets with two of its shareholders, the
Australian Special Opportunity Fund ("Lind Partners") and Oriental
Darius Co. Ltd ("Oriental" ) or the "Shareholders", to advance the
Company up to US$200,000. The funds will be provided by the
Shareholders and will be divided into two Tranches (Tranche 1
totalling $100,000 and Tranche 2 totalling $100,000).
Funding - Tranche 1
Tranche 1 funding totalling US$100,000 will be provided to the
Company by the Shareholders by way of a secured convertible
facility ("Tranche 1 Facility") with a Face Value of $120,000
("Face Value"), the agreed amount to be repaid by the Company over
the term of the agreement. Tranche 1 will be drawn down on or
before 19th October 2016. The Tranche 1 Facility will have a 0%
interest rate per annum, a 24 month term and will be secured
against the Company's assets. Subject to the Company receiving all
necessary shareholders consents, it is also agreed that the
Shareholders will be given the option to convert any outstanding
Face Value amounts into ordinary shares in the Company at a price
per Share equal to the lower of 0.02 pence or, in the event that
the nominal value per Share is reduced in the future, 90% of the
average of three daily VWAP's, chosen by the Investor, during the
20 trading days before the conversion ("Conversion Price").
Upon funding the Tranche 1 Facility, the Company has agreed,
subject to obtaining all necessary shareholder approvals and
consents, to issue the Shareholders options to acquire shares equal
to 100% coverage at the time of funding (the "Options"). If granted
the Options will be exercisable for 36 months with an exercise
price equal to 0.04 pence.
Funding - Tranche 2
The Tranche 2 funds can only be advanced at the discretion of
the Shareholders. Subject to receiving all necessary shareholder
approvals and consents, it is agreed that the Shareholders will
have the option to convert the Tranche 2 funds into ordinary
shares, on the same terms as the Tranche 1 funds are converted. In
addition, it is agreed that subject to receiving all necessary
shareholder consents and approvals the Company will also issue the
Shareholders options equal to 100% of the total value of the
Tranche 2 face value, which is US$100,000 (the "Additional
Options"). If granted the Additional Options will be exercisable
for 36 months with an exercise price exercise price equal to 0.04
pence.
Further updates will be provided when the Tranche 2 monies are
drawn down. The additional terms of the loan are set out below.
Shareholder Interest
If Oriental was to convert all its convertible interests in the
Company, including those interests set out in this announcement
then, in addition to its current shareholding it will hold
6,773,426,573 Ordinary Shares in the Company representing 38.76% of
the total issued share capital in the Company.
In addition, if Lind Partners was to convert all its convertible
interests in the Company, including those interests set out in this
announcement, then in addition to its current shareholding it will
hold 7,175,491,784 Ordinary Shares representing 41.06% of the total
issued share capital of the Company.
Working Capital Update
The Tranche 1 and Tranche 2 funds will be used to support the
Company's working capital position. Following on from the RNS
announcement of 16 September 2016 ("General Update"), the new
Facility will allow the Company to progress the Board restructure
and Corporate Reinvigoration strategy as announced 1 September 2016
and to meet its short term working capital requirements until
approximately end of November 2016. There can be no guarantee that
the Company will be able to continue trading after this date.
The Company is continuing to explore other funding options
including working closely with a number of its major
shareholders.
Related Party Approval
As Lind Partners is a substantial shareholder, the agreement
with Lind Partners is a Related Party Transaction under AIM Rule 13
to the AIM Rules for Companies, and the directors of the Company,
having consulted with its Nominated Adviser, WH Ireland Limited,
consider that the terms of the agreement with Lind Partners is fair
and reasonable insofar as its shareholders are concerned.
Additional Conditions
The receipt of the Tranche 1 monies is subject to the following
conditions:
1. If required by the Shareholders, the Company will, subject to
receiving all necessary shareholder approvals and consents, execute
and deliver a secured convertible loan note instrument, option
agreement and fixed and floating charge with respect to the Face
Value of the relevant convertible securities.
2. If required by the Shareholders, the Company will execute a Securities Purchase Agreement.
About Herencia
Herencia Resources plc is an AIM quoted exploration and
development company operating in Chile. In addition to the Picachos
Copper Project, the Company also has the Guamanga Copper Project
and the La Serena Project. As part of an ongoing cost reduction
program, the Company's office located in Perth has been closed and
its Chilean office and workforce restructured. The Company still
maintains a strong technical and management team in Santiago, Chile
where it has been operating for over eight years.
For further information please contact:
Graeme Sloan, Herencia Resources plc +61 8 9481 4204
Katy Mitchell/Nick Prowting WH Ireland Limited (NOMAD) +44 161
832 2174
Jon Belliss, Beaufort Securities Limited (UK) +44 207 382
8300
References in this announcement to exploration results and
potential have been approved for release by Mr Graeme Sloan (BAppSc
Mining Engineering WASM) who has more than 20 years relevant
experience in the field of activity concerned. Mr Sloan is a Member
of the Australasian Institute of Mining and Metallurgy. Mr Sloan
has consented to the inclusion of the material in the form and
context in which it appears.
Further background details on the Company can be found at
www.herenciaresources.com
**ENDS**
This information is provided by RNS
The company news service from the London Stock Exchange
END
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