TIDMSTGR
RNS Number : 8451V
Stratmin Global Resources PLC
02 February 2017
2 February 2016
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
StratMin Global Resources Plc
("StratMin" or the "Company")
Proposed Acquisition of Signature Gold Ltd
& Suspension of Trading in the Company's Shares
Proposed Acquisition
StratMin Global Resources Plc (AIM: STGR) is pleased to announce
the execution of a binding heads of agreement ("HoA") with
Signature Gold Ltd ("Signature") for the acquisition of the entire
issued share capital of Signature by the Company (the
"Transaction"). The Transaction is subject to shareholder and
regulatory approvals.
The board of directors of StratMin (the "Board") has spent
considerable time and effort evaluating opportunities across a
range of industries. In consultation with significant shareholders
over the last 6 months, StratMin determined to pursue as a priority
the acquisition of projects in gold exploration and/or mining and
has identified Signature as an attractive acquisition target.
Signature is a specialist Australian gold exploration company
focused on large-scale Intrusive Related Gold System ("IRGS")
assets in Queensland, Australia. In addition, Signature holds the
option to acquire the Kasperske Hory gold project in the Czech
Republic. This is a high grade IRGS deposit with an established
initial 1.5M+ oz Au JORC compliant resource with an average 7.29g/t
Au grade. It is owned by Elbrus Resources Limited ("Elbrus"), an
Isle of Man incorporated holding company.
StratMin engaged independent experts to produce a Competent
Persons Report on Signature's Australian portfolio, including a
summary valuation. This report was completed in December 2016 and
valued the Signature portfolio at AUD21m (approximately
GBP12.75m).
The Signature portfolio has been carefully assembled and
progressed over a number of years into a development pipeline of at
least half a dozen projects. Approximately AUD$15 million worth of
exploration expenditure has been incurred to date, generating a
substantial database of geochemical and geophysical testing
results, structural mapping of systems and over 20,000 meters of
drilling. This program has included pioneering work in the
identification and delineation of large-scale intrusive related
gold systems in Queensland, Australia. It has also resulted in
recognition by the Australian Federal Government and accreditation
of Signature's technical program under the Australian Federal
Government R&D Tax Incentive Scheme, which provides a cash
rebate to the Company of 43.5% of all qualifying expenditure,
giving Signature a significant cost advantage in development of the
portfolio. It is StratMin's objective for Signature to become one
of the world's lowest dollar-per-ounce of discovery cost gold
exploration businesses.
Suspension of Trading in the Shares
The Transaction will constitute a reverse takeover ("RTO") under
the AIM Rules for Companies (the "AIM Rules") and therefore, in
accordance with rule 14 of the AIM Rules, will require the
publication of an AIM admission document ("Admission Document") and
approval of shareholders of the Company at a general meeting. Also
in accordance with rule 14 of the AIM Rules, trading in the
Company's ordinary shares of 0.1 pence each ("Ordinary Shares")
will be suspended on AIM from 7.30 a.m. this morning, 2 February
2017, until the publication of the Admission Document and if the
transaction does not complete the Company will remain suspended
until the Company completes a transaction constituting a reverse
takeover. While the Company will seek to publish the Admission
Document as soon as possible, the timing of this cannot yet be
accurately forecast.
Following completion of the Transaction, the Company will no
longer be classified pursuant to rule 15 of the AIM Rules as an AIM
Rule 15 cash shell.
Additional Information on Signature and Elbrus
The Competent Persons Report on the portfolio includes an
assessment of the development budget proposed by Signature to
complete additional drilling, JORC resource definition and
feasibility studies on the lead project in the portfolio.
The budget, prior to consideration of tax offsets available
under the R&D Tax Incentive Scheme, totals AUD5.9m
(approximately GBP3.6m). It is a comprehensive budget including all
corporate and administrative costs. The estimated funding support
available with Signature's R&D accreditation, calculated by
Signature's management, based on rebates received over the last
three years, is AUD2.25m within the twenty-four-month budget
period. This will leave a funding requirement of circa AUD3.65m
(approximately GBP2.2m) to be met by existing cash resources and
new debt or equity funding.
In addition, the estimated cost to complete option payments and
Signature's portion of the bankable feasibility study on the
Kasperske gold project held by Elbrus, as supplied by Elbrus
management, is a combined US$1.75m or approximately GBP1.45m. The
total funding requirement for the combined portfolio to complete
feasibility studies on the lead asset in the Signature portfolio
and a definitive feasibility study of the Kasperske deposit, is
GBP3.65m.
Signature has over 150 shareholders, including institutional
investors from the UK, Australia, Singapore and Hong Kong.
Signature's Board and Management team have exceptional expertise in
gold from exploration and development of assets to building and
operating gold mines.
Elbrus is a private company controlled by majority shareholder
Gordon Toll. Mr Toll is a highly regarded resources industry
executive most well known as the founding Chairman of ASX listed
Fortescue Metals Group Limited, the world's fourth largest iron ore
producer.
It is noted that StratMin Director and CEO, Brett Boynton, is a
director and significant shareholder in Signature and the companies
each appointed and empowered an Independent Transaction Committee
to this transaction to ensure any related party conflict is
appropriately managed. The Transaction will constitute a related
party transaction under rule 13 of the AIM Rules, and further
disclosures on this will be made in the Admission Document.
Summary Transaction Terms
a) An option fee of US$250,000 (the "Option Fee") payable on signing the HoA. The Option Fee is non-refundable unless StratMin or its advisors identify an unresolvable barrier to the Transaction resulting in the Parties being unable to complete the Transaction or there is a material breach of the HoA by Signature resulting in the Parties failing to complete the Transaction.
b) In consideration for the acquisition of Signature, StratMin
will issue equity to the value of up to GBP9.5 million to be
allocated pro rata to the Signature shareholders in two tranches as
follows:
(1) GBP5.5 million in Ordinary Shares at a price of 2p per share
("Tranche 1"); and
(2) A further GBP4.0 million in Ordinary Shares upon completion
of a JORC 2012 compliant resource on Signature's lead project,
identified in the budget and reviewed and commented on by the
independent expert in the Competent Persons Report ("Tranche
2").
ii) The Tranche 2 Ordinary Shares will be issued to Signature
shareholders who were recipients of Tranche 1 shares and who remain
shareholders with a minimum holding of their entire Tranche 1
allocation ("Qualifying Shareholding"). Tranche 2 shares will be
issued to shareholders who have a Qualifying Shareholding, in
proportion to their holdings at the date of announced completion of
the Tranche 2 issuance requirements. Shareholders who cease to have
a Qualifying Shareholding at such date shall forfeit their right to
receive Tranche 2 shares.
iii) Tranche 2 shares will be issued at the greater of the
30-day volume weighted average price of the shares of StratMin
prior to announcement of the Tranche 2 issuance requirements, or a
25% premium to the price of the Tranche 1 shares.
iv) Issuance of the Tranche 2 shares is subject to the
completion of the required JORC 2012 report within 24 months of the
effective date under the Scheme.
c) For the purposes of the Transaction, the Parties agree that
StratMin will be deemed to have a value of GBP3.538m, which is the
equivalent of 2p per share. Accordingly, existing StratMin
shareholders will represent 39.15% and Signature shareholders
60.85% of StratMin post issue of the Tranche 1 Acquisition Shares
and prior to any new equity capital issued for cash if raised.
Additional Features of the Transaction
StratMin intends to acquire the entire issued share capital of
Signature in return for new Ordinary Shares to be issued by
StratMin to Signature shareholders by way of a "scheme of
arrangement" under Australian company law. Signature has granted
StratMin a period of 30 days to complete final confirmatory due
diligence after which a binding Scheme Implementation Agreement
will be executed as soon as practically possible. The Transaction
has the unanimous support of the Signature board. The Signature
board currently hold over 50% of the issued capital of the
company.
Post Transaction Board Changes
The Parties have agreed to the appointment to the Board at the
completion of the Transaction, two new Directors nominated by
Signature and for the total number of Directors on the Board not to
exceed five. Subject to any approvals required and normal due
diligence procedures, the Directors nominated by Signature will be
Mr. Peter Prentice and Mr. Bruce Fulton (the "Proposed Directors"),
both currently Directors of Signature.
i) Mr Bruce Fulton is a dual New Zealand and Australian national
with international experience as a geologist and resource company
executive with major gold and metal producers. Mr Fulton has a
particular expertise in Intrusive Related Gold Systems with
operational experience in Canada, Australia and South East Asia in
leadership positions with companies such as such as Dominion
Mining, Placer Dome and Plutonic Resources. Mr. Fulton was the
Chief Geologist at the Porgera gold mine, an IRGS gold deposit,
which, at the time it was producing over 1 million ounces of gold
per annum and was one of the largest mines in the world. Mr Fulton
is the founder and Chairman of Ophir Partners, a consulting group
focused on the resources industry, which he started following his
successful technical career. Mr. Fulton is currently a Director of
Signature and has held numerous Directorships of public and private
companies.
ii) Mr Peter Prentice is a dual British and Australian national
with extensive experience as a mining engineer and resources
company executive. He is currently Managing Director of the
Agripower group of companies, a private equity funded group
involved in mining and agriculture. Mr Prentice has held a number
of senior technical, management and public company Board roles in
resources companies internationally and he has a particular
expertise in gold exploration and mining. Mr Prentice began his
resources career at the famous Mount Morgan gold mine in Australia,
which, with over 12 million ounces of gold produced, remains the
largest Intrusive Related Gold System discovery in the belt in
Queensland that hosts the Signature portfolio. Mr. Prentice is the
co-founder of Signature and a Director of the Company.
The Proposed Directors have not yet been appointed and no
service agreements are currently in place. Further information
regarding the Proposed Directors will be published in the Admission
Document.
The Company will make further announcements in due course. There
can be no certainty that definitive documentation relating to the
Transaction will be entered into or subsequently that the
Transaction will complete.
For further information please visit www.stratminglobal.com or
contact:
StratMin Global Resources Plc +44 (0) 20
Brett Boynton, CEO 3691 6160
Allenby Capital (Nominated Adviser
& Broker)
John Depasquale / Nick Harriss +44 (0) 020
/ Richard Short 3328 5656
Optiva Securities (Broker) +44 (0) 20
Christian Dennis 3137 1903
VSA Capital Limited (Financial
Adviser) +44 (0) 20
Andrew Raca 3005 5000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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