LONDON (Alliance News) - Golden Saint Resources Ltd Monday said it has agreed to issue up to GBP2.0 million of senior unsecured zero coupon convertible bonds to Darwin Strategic Ltd, with the funds to provide for working capital purposes including the purchase of a 20 tonne wash plant, ancillary plant and equipment and to conduct further exploration work on the company's licence areas.
In a statement, Golden Saint said it will Monday issue GBP1.0 million of the instruments, with two further tranches of GBP500,000 each to be issued on February 20 and May 20 2015, subject to Darwin agreeing to such an issuance if between the date of the previous issue of bonds and the next proposed issue the daily volume weighted average price of the company's shares on at least 20 days falls below 1.42 pence.
Darwin will pay an amount equal to 90% of the issue price to Golden Saint when the bonds are issued. The net proceeds of the issue of the bonds receivable by the company, assuming that all three tranches are issued, will be not less than GBP1.675 million.
Golden Saint must repay Darwin on the second anniversary of the relevant date of issue, or earlier depending on certain events. They may be redeemed by Golden Saint for cash at any time during their term subject to a small redemption premium to the issue price.
The bonds are redeemable upon the occurrence of certain standard events of default at an amount equal to 120% of the issue price. Darwin may also require the bonds to be redeemed for such amount upon a change of control of the company.
The bonds can be converted in whole or in part into ordinary Golden Saint shares at any time prior to redemption at the election of Darwin at a price equal to the lower of 3p and 90% of the market price of a Golden Saint share calculated by reference to the average volume weighted average price for the preceding 15 days, including the date on which notice of conversion was given, provided that Darwin may not issue a conversion notice within one month of issue of the initial bonds if the conversion price would be less than 2p per share.
Under the agreement, Golden Saint is not allowed to incur certain types of indebtedness or, aside from a limited issue of shares to certain directors and service providers of the company, or to make any open offer, rights issue or any other offer of shares to its shareholders without Darwin's consent, provided that it may make an issue of shares as long as Darwin has the right to subscribe for at least 15% of such an issue.
Golden Saint said it has provided warranties, undertaking, covenants and indemnities to Darwin on entering the agreement.
Golden Saint shares were Monday quoted down 5.8% at 1.67 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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