Tom today's RNS - IMPORTANT30 Jan 2020 21:02
Important Information for Shareholders
Katoro shareholders should note that whilst the Company has a binding commitment from Sanderson to subscribe, on Katoro's request, for up to £400,000 to enable it to meet the Additional Tranches requested under the Katoro Loan Facility, in the event that any amount so requested is not provided and the Additional Tranches are sought in full, there can be no guarantee that the Company will be able to provide the Additional Tranches as and when required, in which event the Agreement will fall away and the Company will have no interest in the JV.
Katoro shareholders should also note that there is no certainty that the Project Funding will be secured for the construction and commissioning of a plant to reprocess material from the Tailings. In the event that the Project Funding is not secured, the conditions of the Agreement will not have been satisfied and the JV will not be formed, meaning that the Company will have no interest in the JV and/or the Tailings. Katoro shareholders should also note that in such an instance, whilst the Loan would become repayable by the JV Partners pursuant to the terms of the Agreement, there is no guarantee that the Loan will be repaid in full or if it is repaid, will be repaid in a timely manner.
Katoro shareholders should be aware that there is no certainty that the projected returns set out above for the Project will be achieved, as there is no certainty that the Project Funding will be secured and if it is secured, that debt funding will be secured to finance all of the projected costs of the Project and if the Board is able to secure such debt funding, that it will be in line with the Board's current expected rates, in which case the Project's returns, as set out above, could be materially impacted resulting in the Project not being economical. In addition, if the Project Funding is in the form of a mixture of debt and equity, as opposed to just debt as currently proposed by the Board, it is likely that the Parties interest in the JV will be diluted and the Company's interest in the JV could therefore be materially lower than 50%.
Also, there can be no guarantee that in the event that the Tailings are reprocessed, that the projected production and/or recovery rates will be achieved, or that the targeted 500,00tpm of material within two years will be achieved, which could result in lower returns and which may require additional funding to be secured, which could result in the Company's interest in the JV being reduced.
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