Peninsular Gold Limited Refinancing (5632N)

TIDMPGL

RNS Number : 5632N

Peninsular Gold Limited

01 October 2012

PENINSULAR GOLD LIMITED

("Peninsular" or "Company")

AIM: PGL

REFINANCING OF EXISTING FACILITIES

Peninsular Gold Limited is pleased to announce that its wholly owned subsidiary, Raub Australian Gold Mining Sdn. Bhd. ("RAGM") has obtained an Islamic financing facility for up to Ringgit Malaysia 124 million (approximately US$40 million) (the "New Facility") from its existing Malaysian financier Bank Kerjasama Rakyat Malaysia Berhad ("Bank").

The New Facility will be utilised to completely refinance RAGM's three existing Islamic facilities with the Bank which have a total of Ringgit Malaysia 104,080,000 (approximately US$34 million) outstanding ("Existing Facilities"). This re-financing will re-schedule the repayment of debt over 72 months after drawdown of the New Facility, and otherwise is on materially the same terms as the Existing Facilities.

The principal terms of the New Facility are as follows:

 
      1.              A profit rate of 2 per cent above the Bank's funding 
                       rate (BFR - currently 6.60%), payable monthly. 
      2.              Repayable over 72 months commencing 1 month from date 
                       of first drawdown 
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      3.              Security by way of: 
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                a)              Facilities Agreement which includes an Asset Sale 
                                 Agreement and Asset Purchase Agreement (which are 
                                 financing documents under Islamic principles) 
          --------  ------------------------------------------------------------------ 
                b)              A third party fixed legal charge ("New Charge") 
                                 over the land known as Pajakan Lombong 1669, Lot 
                                 No. 17478, Bukit Koman, Mukim Gali, District of 
                                 Raub, Pahang ("Property") owned by Akay Holdings 
                                 Sdn Bhd ("Akay"). Akay is a privately owned Malaysian 
                                 company with a 15.0 % interest in Peninsular and 
                                 is 99.9% owned by Dato' Sri Andrew Tai Yeow Kam 
                                 ("Andrew Kam"), the Chairman and Chief Executive 
                                 of Peninsular who is also a director of RAGM and 
                                 Akay. 
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                c)              A debenture incorporating fixed and floating charges 
                                 over the present and future assets and undertakings 
                                 of RAGM 
          --------  ------------------------------------------------------------------ 
                d)              A corporate guarantee by Peninsular 
          --------  ------------------------------------------------------------------

Akay Agreement

To facilitate the grant of the New Facility, as with the Existing Facilites, Peninsular and RAGM have entered into an Agreement with Akay ("the New Akay Agreement") varying the terms upon which Akay has previously provided third party fixed legal charges to the Bank over the Property and agreed to grant the New Charge to the Bank as security for the New Facility.

The New Akay Agreement provides for a reduction in the aggregate annual fee payable to Akay from Ringgit Malaysia 2.35 million (approximately US$765,000) to Ringgit Malaysia 1.7 million (approximately US$554,000) and extends these annual fee payments until the New Charge is released or discharged.

The key terms of the original Akay Agreements as varied by the New Akay Agreement provide that:

i. Akay shall receive a reduced annual fee from RAGM of Ringgit Malaysia One Million Seven Hundred Thousand (RM1,700,000-00) only payable in four (4) equal quarterly instalments, until such time as the New Charge is released or discharged;

ii. Akay has the right at any time to give to RAGM not less than 90 days notice requiring Peninsular and RAGM to procure the release of the Charge;

iii. Akay however agrees and undertakes that it will not issue any proceedings against Peninsular and/or RAGM whilst Andrew Kam is a director of Peninsular or he or any of his family (as defined in the AIM Rules for Companies (the "AIM Rules") are interested in aggregate, directly or indirectly, in excess of 50% of the Company's issued share capital;

iv. Peninsular and RAGM have agreed to indemnify Akay against any loss which it may suffer arising from the creation of the New Charge.

As Andrew Kam is a director of the Company, the New Akay Agreement constitutes a related party transaction under the AIM Rules for Companies. Accordingly, the directors of the Company, excluding Andrew Kam, having consulted with the Company's nominated adviser, RFC Ambrian Limited, consider that the terms of the New Akay Agreement are fair and reasonable insofar as its shareholders are concerned.

This refinancing of the previous facilities is a positive development for the business and gives RAGM increased flexibility within its cash flow and has been agreed with the Bank at the same profit rate above BFR as the previous facilities.

Further information:

 
 Dato' Sri Andrew TY Kam          Patrick Watson 
  Chairman and Chief Executive     Finance Director 
  Peninsular Gold Limited          Peninsular Gold Ltd. 
  Tel: +60 (0)3 2698 8381          Tel: +44 (0)7799 885653 
 Samantha Harrison / Jen Boorer   Colin Rowbury 
  Nominated Advisor                Broker 
  RFC Ambrian Limited              Daniel Stewart & Co. Ltd. 
  Tel: +44 (0)20 3440 6800         Tel: +44 (0)20 7776 6936 
                                 ---------------------------

This information is provided by RNS

The company news service from the London Stock Exchange

END

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