Richlandresourcesltd.com17 Oct 2020 09:37
Key Highlights:
Proposed acquisition of GAR, which via its wholly owned US subsidiary, holds a 51% interest in four gold exploration projects in North and South Carolina, being:
the Jones-Keystone Loflin Project
the Carolina Belle Project
the Jennings Pioneer Project; and
the Argo Project,
(together, the “GAR Projects”).
Initial Consideration: an aggregate payment on Completion to the sellers and URI of AU$60,000 (approximately US$42,500; £33,250) in cash and AU$1.04m (approximately US$737,500; £576,750) in new Common Shares to be issued at the price of the Proposed Placing (which remains to be determined). In addition, Richland is required to make two non-refundable cash payments to GAR of US$29,340 on 31 July 2020 and US$22,818 on 30 September 2020 if Completion has not occurred by such dates.
Deferred Consideration: potential further future payments to be made to the sellers and URI, in cash or new Common Shares at Richland’s sole discretion, of, in aggregate, AU$1.5m (the “Tranche 1 Deferred Consideration”) and AU$3m (the “Tranche 2 Deferred Consideration”), subject to the achievement of certain material, value-generative performance milestones, or the occurrence of certain vesting events within five years of Completion. Subject to an earlier occurrence of a Vesting Event, the Tranche 1 Deferred Consideration will fall due upon confirmation of a prescribed minimum estimated level of JORC 2012 Compliant Resources and the Tranche 2 Deferred Consideration will fall due on completion of a pre-feasibility study confirming a pre-tax NPV of more than US$50m in respect of any of the GAR Projects (with the Tranche 1 Deferred Consideration also falling due upon the achievement of such performance milestone if not previously triggered/paid).
Proposed Placing: the initial cash consideration and the enlarged group’s planned initial two year work programme and requisite working capital requirements is intended to be funded via the issue of new equity by way of the Proposed Placing to be conducted in the short term in connection with the Proposed Transaction. Peterhouse Capital Limited, the Company’s existing Broker, will act as bookrunner to the Company in connection with the Proposed Placing.
Board Changes and Other Proposed Corporate Changes:
Realignment of the Board with the appointments of Bernard Olivier and Melissa Sturgess, with immediate effect, who together have significant experience of both the natural resources sector and certain key global capital markets.
Proposed name change to Lexington Gold Ltd to reflect the transformational nature of the Proposed Transaction.
Proposed share capital consolidation to reduce the total number of Common Shares in issue on Completion and re-admission of the enlarged group to trading on AIM, and certain other changes to the Company’s Bye-laws to bring the Company into greater alignment with more UK market standard corporate governance practices. Further details of the proposed consolidation and c
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