TIDMTETH
RNS Number : 8260P
Tethyan Resources PLC
22 November 2016
November 22 2016
TETHYAN RESOURCES PLC
(the "Company" or "Tethyan")
SUBSCRIPTION AND NOTICE OF GENERAL MEETING
Overview
Further to the announcement of 17 October, the board of Tethyan
Resources PLC (the "Board") is pleased to announce that it has,
subject to Shareholder approval of updated share issue authorities
at a general meeting of the Company (the "GM") to be held on 12
December 2016, received subscriptions for 39,100,000 new ordinary
shares in the Company at a price of 3.6 Canadian cents, raising
approximately CAN$1,407,600 (or approximately GBP852,380) before
expenses, for the Company to, inter alia, further advance the Suva
Ruda and Gokcanica projects in the Republic of Serbia.
The Subscription
As announced on 21 November 2016, Southern Arc Minerals Inc.
("Southern Arc"), a TSX-Venture Exchange listed company, subscribed
for 16,500,000 new Ordinary Shares at a price of CAN$0.036 per new
Ordinary Share to raise CAN$594,000 (approximately GBP353,570)
before expenses, for the Company to, inter alia, further advance
its Suva Ruda and Gokcanica projects (over which it has an option)
in the Republic of Serbia ("Southern Arc Subscription").
In addition, Southern Arc also purchased 14,653,967 Ordinary
Shares from Newmont Ventures Limited ("Newmont Acquisition") as
part of becoming a strategic investor in the Company. Taken
together with the 16,500,000 new Ordinary Shares acquired in the
Southern Arc Subscription, Southern Arc, following completion of
the Newmont Acquisition, owns 31,153,967 Ordinary Shares being
29.15% of the Existing Ordinary Shares. Further details of Southern
Arc and the Southern Arc Subscription are set out below.
Subject to Shareholder approval, the Company has secured
additional equity financing which it also plans to use to advance
its Suva Ruda and Gokcanica projects (over which it holds an
option) in the Republic of Serbia, as well as for general corporate
purposes. The financing will be carried out by way of the
Subscription rather than as a placing.
The Company has received signed Subscription Agreements for a
total of 39,100,000 new Ordinary Shares at a Subscription Price of
CAN$0.036 (GBP0.0218), raising gross proceeds (before commission
and expenses) of CAN$1,407,600 (GBP852,380). The Subscription Price
represents a discount of approximately 12.5 per cent. to the
closing price of 2.5 pence per Ordinary Share on 21 November 2016
(being the last practical date prior to the announcement of the
Subscription).
The Subscription is conditional upon Admission and upon the
Company obtaining the approval of Shareholders at the General
Meeting to grant the Directors authority to allot the Subscription
Shares and to dis-apply pre-emption rights which would otherwise
apply to the allotment of the Subscription Shares. The Company has
received irrevocable undertakings to vote in favour of the
Resolutions in respect of approximately 40.8 per cent. of the
Existing Ordinary Shares from certain Shareholders, including
Southern Arc.
Background to and reasons for the Subscription
Tethyan has recently acquired an option over the "Suva Ruda
Project", which hosts the "Rudnitza Prospect", a porphyry copper
gold system, and signed a joint venture agreement over the
"Gokcanica Project". Both projects are located in the Republic of
Serbia.
The Rudnitza Prospect is a porphyry copper gold target situated
on the Suva Ruda Project and was previously drilled on a minor
scale in 2004 by Phelps Dodge. Drilling intersected highly
encouraging results including drill hole PDRC -004 which
intersected 144 meters of 0.4 % Cu, 0.4 g/t Au from 100 meters
depth and bottomed in mineralisation at 244 meters. The project was
never tested at depth below around 300 vertical meters from
surface. Despite intersecting very encouraging grades in several
drill holes Phelps Dodge exited the project in 2006 due to the
perception that it did not meet its corporate size objectives.
Following a review of the project by Tethyan's geological
personnel, they concluded that Rudnitza has the potential to
contain a major copper gold porphyry deposit which has the
potential to be a flagship project.
As announced on 27(th) September 2016, as part of the option
deal on the Suva Ruda Project, Tethyan is required to complete 2000
meters of drilling by 28(th) December 2016. Tethyan also announced
on 1(st) November 2016 that it had commenced a 2500 meter drill
program, further details of which are set out in that announcement.
Should this drill program locate good grade mineralisation
comparable to the previous drilling at depth, below 200 meters,
then the Directors believe that this project has the potential to
be a flagship project and be could be rapidly advanced to the
development stage of exploration.
The Gokcanica Project, over which Tethyan have signed a joint
venture agreement, covers an epithermal district that has seen
small scale workings from Roman times through to recent. Tethyan
plans to complete early stage geological mapping and sampling work
over the Gokcanica Project plus a geophysical survey in early 2017
to identify targets for drilling later in 2017. Gokcanica hosts a
large phyllic alteration zone over 7 km by 3 km with abundant small
scale epithermal alteration and mineralisation. It is proposed that
a buried porphyry copper system might be driving the system and
Tethyan plans to drill test for this buried system. In addition,
narrow veins with high grade gold up to 11 g/t have been identified
on the project area. Follow-up work has commenced on this area to
try and define drill targets. Further details are set out in the
Company's announcement of 18(th) October 2016.
Tethyan plans to use the funds raised by the Subscription for
advancing the Suva Ruda and Gokcanica projects and for general
corporate purposes.
Further Details of the Subscription
39,100,000 Subscription Shares have been subscribed for by the
Subscribers at the Subscription Price to raise gross proceeds of
CAN$1,407,600 (GBP852,380) (before commission and expenses) and net
proceeds of CAN$1,323,306 (GBP801,664).
Southern Arc, as a strategic investor in Tethyan, has subscribed
for 12,500,000 Subscription Shares. Following completion of the
Subscription, the Southern Arc Subscription and the Newmont
Acquisition, Southern Arc will own 43,653,967 Ordinary Shares,
being 29.9% of the Enlarged Share Capital.
The Subscription is conditional on Admission and the approval of
the Resolutions at the General Meeting, which is to be held at the
offices of Gowling WLG (UK) LLP at 4 More London Riverside, London,
SE1 2AU, on 12(th) December 2016 at 10.30 a.m. A circular will
today be sent to Shareholders and a copy will be available on the
Company's website at www.tethyan-resources.com.
Application will be made to the London Stock Exchange for the
Subscription Shares to be admitted to trading on AIM. Subject to
the passing of the Resolutions, it is expected that Admission will
become effective and that dealings in the Subscription Shares will
commence on 13(th) December 2016.
The Subscription Shares issued pursuant to the Subscription
will, when issued, be credited as fully paid and will rank pari
passu in all respects with the Existing Ordinary Shares, including
the right to receive all dividends and other distributions
declared, made or paid after the date of issued.
Any Subscription Shares issued to Canadian Subscribers will be
subject to a four month and one day hold period from Admission
during which the Subscriber must not trade the Subscription Shares
unless permitted under applicable Canadian securities laws.
The Directors intend to vote in favour of each of the
Resolutions in respect of their aggregate beneficial interest in
respect of 12,401,142 Ordinary Shares, representing approximately
11.6 per cent. of the Existing Ordinary Shares.
Following completion of the Subscription, the Company expects
the following Shareholders to hold notifiable interests in the
Company:
Shareholder Number of Ordinary Shareholding as a
Shares held following percentage of the
Admission Enlarged Share Capital
-------------------------- ----------------------- ------------------------
Southern Arc Minerals
Inc. 43,653,967 29.9 %
-------------------------- ----------------------- ------------------------
Pat DiCapo 9,000,000 6.2 %
-------------------------- ----------------------- ------------------------
Frank Brewer 8,145,000 5.6%
-------------------------- ----------------------- ------------------------
Peter Mullens (Director) 8,171,975 5.6%
-------------------------- ----------------------- ------------------------
Khuanchai Siphakanlaya 5,000,000 3.4 %
-------------------------- ----------------------- ------------------------
Alan Fairless 5,000,000 3.4 %
-------------------------- ----------------------- ------------------------
The Company has entered into the Subscription Agreements with
the Subscribers pursuant to which the Subscribers have agreed to
subscribe for the Subscription Shares at the Subscription Price
conditional on the passing of the Resolutions and Admission. Each
Subscription Agreement contains representations, warranties and
covenants in favour of the Company which are customary for a
subscription of this nature and each is on the same terms.
Directors' Participation
Certain of the Directors will be participating in the
Subscription ("Directors' Participation") as set out below and the
Company expects them to hold the following interests in the
Company:
Director Number of Number of Ordinary Shares Shareholding as
Subscription held following Admission a percentage of
Shares the Enlarged Share
Capital
--------------- -------------- -------------------------- --------------------
Christopher
Goss 650,000 793,518 0.55 %
--------------- -------------- -------------------------- --------------------
Peter Mullens 650,000 8,171,975 5.6 %
--------------- -------------- -------------------------- --------------------
Didier Fohlen 1,000,000 3,891,515 2.7 %
--------------- -------------- -------------------------- --------------------
The Directors' Participation is deemed to be a related party
transaction for the purposes of Rule 13 of the AIM Rules. Mr Gokhan
Kantarcigil, being the sole independent director of the Company for
the purposes of the Directors' Participation, considers, having
consulted with the Company's Nominated Adviser, that the terms of
Directors' Participation are fair and reasonable in so far as the
Shareholders are concerned.
The Company expects that the commission and expenses payable in
connection with the Subscription will be approximately CAN$85,000
in cash (representing approximately 7.0 per cent. of the aggregate
Subscription proceeds from funders they have introduced). In
addition to the commission of CAN$84,294 payable to PowerOne for
introducing Subscribers pursuant to the Introduction Agreement, the
Company has granted to PowerOne 2,341,500 Broker Warrants to
subscribe for Ordinary Shares, exercisable at the Subscription
Price over a period of three years from the date of grant (such
number being equal to seven per cent. of the total number of
Subscription Shares issued to Subscribers introduced by PowerOne,
and being equivalent to 1.6 per cent. of the Enlarged Share
Capital). The grant of the Broker Warrants is conditional on
completion of the Subscription and Admission.
For further information please contact:
Tethyan Resources PLC +44 1534 881 885
Peter Mullens (CEO) pjm@tethyan-resources.com
Cairn Financial Advisers LLP +44 (0) 207 213 0880
James Caithie / Sandy Jamieson
DEFINITIONS
The following definitions apply throughout this document, unless
the context requires otherwise.
"Act" the UK Companies Act 2006, as amended
"Admission" the admission of the Subscription
Shares to trading on AIM becoming
effective pursuant to rule 6 of the
AIM Rules
"AIM" the market of that name operated
by London Stock Exchange plc
"AIM Rules" the 'AIM Rules for Companies' published
by the London Stock Exchange governing,
amongst other things, the admission
to AIM and the continuing obligations
of AIM companies
"Broker Warrants" 2,341,500 warrants to be granted
to PowerOne conditional on Admission
in accordance with the Introduction
Agreement exercisable at CAN$0.036
over a period of three years
"certificated" or the description of a share or security
"in certificated form" which is not in uncertificated form
(that is, not in CREST)
"Company" or "Tethyan" Tethyan Resources plc, a company
incorporated in England and Wales
with registered number 03781581
"CREST" the relevant system (as defined in
the CREST Regulations) in respect
of which Euroclear is the Operator
(as defined in the CREST Regulations)
in accordance with which securities
may be held and transferred in uncertificated
form
"CREST Regulations" the Uncertificated Securities Regulations
2001 (SI 2001 No. 3755), including
any enactment or subordinate legislation
which amends or supersedes those
regulations and any applicable rules
made under those regulations or such
enactment or subordinate legislation
for the time being in force
"Directors" or "Board" the directors of the Company
"Enlarged Share Capital" the issued Ordinary Shares of the
Company immediately following Admission
"Euroclear" Euroclear UK & Ireland Limited, a
company incorporated in England and
Wales and the operator of CREST
"Existing Ordinary Shares" the 106,859,829 Ordinary Shares in
issue at the date of this document
"FCA" the Financial Conduct Authority
"FSMA" the UK Financial Services and Markets
Act 2000 (as amended from time to
time)
"General Meeting" the general meeting of the Company
convened for 10.30am on 12(th) December
2016 (or any adjournment or postponement
thereof)
"Introduction Agreement" the agreement dated 14(th) October
2016 between PowerOne and the Company
pursuant to which PowerOne has agreed
to introduce potential Canadian subscribers
for up to 30 million Subscription
Shares
"London Stock Exchange" the London Stock Exchange plc
"Notice of General Meeting" the notice of General Meeting, as
sent to Shareholders on 22 November
2016
"Ordinary Shares" ordinary shares of 0.1 pence each
in the capital of the Company
"PowerOne" PowerOne Capital Markets Limited
"Relevant Securities" Shares in the Company other than
shares allotted pursuant to:
a) an employee share scheme (as defined
by section 1166 of the 2006 Act);
b) a right to subscribe for shares
in the Company where the grant of
the right itself constituted a Relevant
Security; or c) a right to convert
securities into shares in the Company
where the grant of the right itself
constituted a Relevant Security;
and
any right to subscribe for or to
convert any security into shares
in the Company other than rights
to subscribe for or convert any security
into shares allotted pursuant to
an employee share scheme (as defined
by section 1166 of the Act).
"Resolutions" the resolutions set out in the Notice
of General Meeting
"Shareholders" holders of Ordinary Shares from time
to time, each individually being
a "Shareholder"
"Subscriber" a subscriber for Subscription Shares
at the Subscription Price pursuant
to a Subscription Agreement
"Subscription" the subscription by Subscribers for
the Subscription Shares at the Subscription
Price pursuant to the Subscription
Agreements, as described in this
announcement
"Subscription Agreement" a conditional agreement dated on
or before 21(st) November 2016 between
the Company and a Subscriber relating
to the
"Subscription Price" CAN$0.036 (GBP0.0218) per Subscription
Share
"Subscription Shares" 39,100,000 new Ordinary Shares, representing
CAN$ 1,407,600 (GBP852,380) at the
Subscription Price
"UK" or "United Kingdom" the United Kingdom of Great Britain
and Northern Ireland
SUBSCRIPTION STATISTICS
Number of Existing Ordinary Shares in issue 106,859,829
Number of Subscription Shares 39,100,000
Subscription Price (per Subscription Share) CAN$0.036
(GBP0.0218)
Estimated gross proceeds of the Subscription receivable CAN$ 1,407,600
by the Company GBP852,380
Estimated net proceeds of the Subscription receivable CAN$1,323,306
by the Company after commissions and expenses GBP801,664
Enlarged Share Capital immediately following the
Subscription 145,959,829
Existing warrants 3.48 pence 105,560
Number of Broker Warrants 2,341,500
Employee options under the Company's employee
share scheme 7,600,000
Fully diluted share capital basis immediately
following the Subscription and issue of the Broker
Warrants. 156,051,389
Percentage of the Enlarged Share Capital represented
by the Subscription Shares
26.8%
Percentage of the Enlarged Share Capital held
by or on behalf of the Directors on Admission 9.9%
Approximate market capitalisation of the Company GBP3.2 million
at the Subscription Price on Admission CAN$5.25 million
AIM Symbol TETH
ISIN GB00BYVFRB16
Note 1: Any CAN$:GBP amounts stated in this document
are based on a CAN$:GBP exchange rate of 1.6507
to GBP GBP.
Note 2: Save for the date of publication of this
announcement, each of the times and dates above
are subject to change. Any change, including any
consequential change to the Subscription Statistics
above, will be notified to shareholders by an
announcement on a Regulatory Information Service.
Certain events in the timetable are conditional
upon, inter alia, the approval of the Resolutions.
EXPECTED TIMETABLE OF EVENTS
Publication of the Notice of General Meeting and 22(nd) November
posting to Shareholders 2016
Latest time and date for receipt of Forms of Proxy 10.30 am on
8(th) December
2016
General Meeting 10.30 am on
12(th) December
2016
Admission effective and dealings commence 8.00 am on
on AIM in Subscription Shares 13(th) December
2016
CREST accounts of UK Subscribers credited with 8.00 am on
Subscription Shares 13(th) December
2016
Share certificates in respect of Subscription by week commencing
Shares dispatched 19(th) December
2016
About Tethyan
Tethyan is an AIM quoted junior exploration company exploring
for copper and gold within the Tethyan mineral belt. Tethyan has an
experienced Board and technical team. Currently Tethyan holds
several licences in Serbia and is looking for other copper and gold
projects in Eastern Europe, specifically Serbia and Bulgaria.
Southern Arc (TSXV: SA), a strategic investor in Tethyan, will hold
29.15% of the Company on completion of the Southern Arc
Subscription and the Newmont Acquisition. Southern Arc brings
considerable corporate and exploration experience to Tethyan.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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