LONDON (Alliance News) - African gold explorer GoldStone Resources Ltd said it will post a circular to its shareholders Tuesday about a proposed share consolidation and proposed subscription by Stratex International PLC, after Stratex conditionally agreed to acquire up to 33.4% of GoldStone in July for nearly GBP1.3 million.
Back in July, GoldStone said it planned to raise gross proceeds of GBP1.25 million through a share subscription by Stratex International to fund its exploration in West Africa, which would follow a proposed 1 for 10 share consolidation for 20.8 million new shares at a price of 6 pence per share. Stratex will end up owning roughly a third of GoldStone if the deal is completed, with a 33.45% shareholding.
At the time, GoldStone said that the funds raised through the Stratex subscription would provide it with sufficient cash resources to conduct meaningful exploration at Homase/Akrokerri, keep the most prospective projects in good standing and allow the company to investigate other measures of funding.
Stratex International will also have matching warrants, exercisable for 18 months at 0.7 pence, which would bring its total holding up to 50.1%.
However, the subscription is conditional upon the approval by independent shareholders of GoldStone of a waiver of the obligation to make a mandatory offer, which is needed as Stratex would hold more than a 50% shareholding.
"If Stratex exercises the warrants, which will be exercisable immediately on Admission, in full and assuming no other issues of new shares, Stratex would hold 50.1% of the voting rights of GoldStone. In those circumstances, Stratex would be permitted to make further purchases of new shares without incurring an obligation under Rule 9 to make a general offer to all holders of new ordinary shares," said Stratex in a statement.
In two separate statements Tuesday, the two AIM-quoted firms said that under the deal, the new subscription shares must be admitted to AIM on October 31.
After that, Christopher Hall, Bob Foster and Emma Priestley will be appointed to the GoldStone board, with Hall serving as GoldStone's chairman. Jonathan Best, Hendrik Schloemann and Benjamin Hill will resign from the GoldStone board.
Stratex is an exploration and development company focused on gold and base metals in Turkey, East Africa and West Africa.
GoldStone shares were untraded Tuesday mid-morning at 0.294 pence, while Statex shares were down 1.2% at 2.08 pence.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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Goldstone Resources (GRL)