Last checked at 25 May 2012 07:00
Kryso Resources Plc
("Kryso" or the "Company")
CONFIRMATION OF DEBT FINANCING AND TAKEOVER CODE
Shareholder Loan
Kryso Resources Plc (AIM: KYS), the mineral exploration and development company with gold and nickel-copper projects in Tajikistan, is pleased to announce that China Nonferrous Metals Int'l Mining Co., Ltd. ("CNMIM"), which is the Company's largest shareholder with approximately 26% of the Company's issued share capital, has agreed to provide a secured loan facility to the Company (the "Loan"), which completes the planned debt financing requirement for its principal gold project in the Republic of Tajikistan.
The Loan will be made on commercial terms in two denominations of US$ 10 million and RMB 530 million (approximately US$ 83.5 million). The Loan will be used to finance the design, construction, operation and administration of the Pakrut gold mine in the Republic of Tajikistan, of which Kryso has 100% ownership through its indirect subsidiary, Limited Liability Company Pakrut ("LLC Pakrut") and provide the Company with general working capital.
The Company expects to draw down the Loan by 20 June 2012. The US$ 10 million amount of the Loan will be disbursed by CNMIM directly to the Company's bank account, whereas the RMB 530 million amount of the Loan will be disbursed by CNMIM entering into contracts with and making payments to third parties in connection with the purpose for which the Loan is provided at the Company's direction and on behalf of the Company and/or LLC Pakrut as their agent. Repayment of the Loan will be made in USD, which minimises the Company's currency exposure.
The terms of the Loan include an annual fixed interest rate of 9% together with a one-off management fee of 0.5%, which is payable upfront. The Loan is repayable in equal instalments commencing in November 2014, with the final repayment date of the Loan being 31 May 2017. In the event there are delays in the Company repaying any of the Loan, default interest at a rate of 13.5% per annum will be applied on any overdue amount from the date on which it is due until the date on which it is re-paid. The Loan is governed by the law of China.
The Loan is secured by means of a pledge (the "Pledge") granted by Kryso Resources Limited ("KRL"), Kryso's wholly-owned subsidiary, to CNMIM over its 100% equity interest in LLC Pakrut, the indirect subsidiary of the Company which owns the Pakrut gold mine project. The Pledge is governed by Tajik law.
As CNMIM is a substantial shareholder in the Company, pursuant to AIM Rule 13, the provision of the Loan by CNMIM to the Company is deemed to be a related party transaction. The Company's board of directors (excluding Tao Luo and Weili (David) Tang, who are appointees of CNMIM (the "Independent Board") considers, having consulted with Kryso's Nominated Adviser, Investec Bank Plc, that the terms of the Loan and its related security and agency arrangements are fair and reasonable insofar as the shareholders of Kryso are concerned. On the basis of this advice the Independent Board has approved these arrangements, including the Loan.
Planned Exercise of Warrants
Kryso reports that it has received a letter from CNMIM indicating that in due course it intends to exercise the warrants issued to it by the Company in 2010 to subscribe for 73,333,333 ordinary shares in the capital of the Company at £0.21 per share. Such exercise would raise gross proceeds of approximately £15.4 million for the Company and take CNMIM's shareholding to approximately 40.7% of the Company's issued share capital.
Application of Takeover Code
Although the Company is incorporated in and has its registered office in England, the Board believes that the Company's place of central management and control ("PCCM") is now located outside the United Kingdom, the Channel Islands and the Isle of Man.
Accordingly, the Board believes that the Company is no longer subject to the City Code on Takeovers and Mergers (the "Code") by virtue of its PCCM no longer being in the United Kingdom, the Channel Islands or the Isle of Man and the Takeover Panel has confirmed its view that the Company no longer falls within the jurisdiction of the Code.
In particular, investors should be aware that now the Company is not subject to the Code, CNMIM and other shareholders are able to increase their interests in voting rights in Kryso to 30% or more without having to make a mandatory offer under Rule 9 of the Code.
Craig Brown, Managing Director of Kryso, commented:
"We are delighted to have secured the debt financing requirement for the Pakrut project given the current challenging debt markets. Mine construction is already progressing well and, with debt financing now confirmed, we are on track to commence production in the second half of 2013."
For further information please visit the Company's website (www.kryso.com) or contact:
Kryso Resources Plc
Craig Brown, +44 (0) 20 7349 9160
Managing Director
or
Investec Bank Plc
Jeremy Ellis / Chris Sim / Neil Elliot, +44 (0)20 7597 5970
or
XCAP Securities Plc
Jon Belliss, +44 (0) 207 101 7070
or
Walbrook PR
Paul Cornelius / Louise Mason / Lianne Cawthorn, +44 (0)20 7933 8780
About the Pakrut Gold Project
The Pakrut gold project, of which Kryso has 100% ownership, is situated in Tajikistan approximately 12km northeast of the capital city Dushanbe. Pakrut has estimated total JORC compliant resources of 5,020,000 oz Au (assuming a cut-off grade of 0.5 g/t Au) and is located within the Tien Shan gold belt, which extends from Uzbekistan into Tajikistan, Kyrgyzstan and western China, and which hosts a number of multi-million ounce gold deposits.
About Tajikistan
Tajikistan is a secular republic located in Central Asia. The country is a member of the Commonwealth of Independent States and the Shanghai Cooperation Organisation. Tajikistan hosts numerous operating precious metal mines as well as the largest aluminium smelter in Central Asia. Kryso's management team has extensive experience in the mining industry in Tajikistan.
Copyright Business Wire 2012