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LONDON (Alliance News) - Goldstone Resources Ltd saw its shares soar on Thursday after securing investment from two fellow London-listed firms, Metal Tiger PLC and Red Rock Resources PLC.
Goldstone shares were trading 64% higher at 2.70 pence per share on Thursday morning, and Red Rock shares were also up 24% to 0.587 pence. Metal Tiger shares were up 1.4% to 4.59 pence.
Together, Metal Tiger and Red Rock have acquired a total of 12.0 million shares in Goldstone at a price of 1.87 pence each, which is equal to a 19.29% stake in Goldstone.
Metal Tiger and Red Rock have split those shares in half, meaning they have acquired 6.0 million shares in Goldstone each.
The combined value of the deal is GBP225,000, with Metal Tiger and Red Rock each liable for half. That consideration is payable half in cash and half in Red Rock shares.
Therefore, Metal Tiger has paid its GBP112,500 share solely in cash, but Red Rock is paying its GBP112,500 in shares.
"Our key focus remains improving net cash flow, but at this point in the commodity market cycle valuable opportunities exist, and it is our policy to pursue them where this can enhance value and improve our project quality, without increasing recurrent costs," Red Rock Chairman Andrew Bell said.
"We are pleased to announce the strategic acquisition of shares in another UK listed operating resource company. Metal Tiger continues to build its investment in low valuation clean operating vehicles and anticipates further transactions of this nature will be undertaken in the near future," said Metal Tiger Chairman Terry Grammer.
As a result, Red Rock will issue 21.3 million new shares priced at 0.527 pence each to the vendor of the Goldstone shares, Unity Mining Ltd, and issue a further 21.3 million options over further shares which can be exercised by Unity within two years at a price of 0.66 pence.
The shares being issued by Red Rock to Unity Mining represent around 8.5% of Red Rock's existing issued share capital and will account for around 7.8% of Red Rock's enlarged issued share capital. If Unity exercised its options, it would double those respective stakes.
Metal Tiger already held shares in Goldstone prior to the deal Thursday, and now holds 8.3 million shares in Goldstone, giving it a 13.26% stake in the company. Red Rock did not own any shares in Goldstone prior to the deal, leaving it with a 9.645% stake.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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