Last checked at 28 May 2010 07:00
GOLDSTONE RESOURCES LTD
("GoldStone" or "the Company")
PLACING
GoldStone (AIM: GRL), the AIM quoted exploration company focused on gold in West Africa, announces that it has conditionally raised approximately £2.06 million (before expenses) through a placing of new ordinary shares at a price of 3.5 pence per share (the "Placing").
Background to the Placing
GoldStone's projects, located in Ghana and Senegal, range from grassroots projects to advanced exploration. The Company intends to utilise the funds raised to explore these projects further, in particular its advanced Homase project, which contains a JORC compliant gold resource of 282,608 ounces.
The Company is reviewing a number of new gold exploration opportunities in order to grow the portfolio and to reduce discovery risk. GoldStone is currently awaiting approval of two large gold exploration permits in Gabon, Central Africa.
On 7 May 2010 the Company announced that it had entered into a strategic alliance with Bendigo Mining Limited ("Bendigo"), a mid-tier Australian gold producer, which included a subscription for 32,704,166 ordinary shares in the Company. In addition, GoldStone issued non-tradable and non-transferable warrants to Bendigo in two tranches exercisable at 8.5p and 11.5p per share respectively. The key benefit of the strategic alliance is that GoldStone has gained a long term cornerstone investor with a strong balance sheet. In addition, Bendigo will provide technical support for the development of GoldStone's existing and future projects as the company has extensive underground and open pit gold mining experience and significant health, safety and environment skills.
The Placing
The Company, through its joint brokers, Westhouse Securities Limited and Orbis Equity Partners Limited, has conditionally placed 58,857,142 new ordinary shares (the "Placing Shares") at 3.5p per share, raising £2.06 million (before expenses).
The existing power granted by shareholders to the directors of the Company to allot shares for cash is insufficient to allow the issue of all of the Placing Shares. Therefore, the Placing is conditional on the passing of the necessary resolutions at a General Meeting of the Company which is expected to be held on 14 June 2010 and is expected to be completed at 8.00 a.m. on 15 June 2010 on admission of the Placing Shares to trading on AIM. A circular, incorporating a notice of General Meeting, will be posted to shareholders today.
Bendigo, which holds 32,706,166 ordinary shares, representing 20.0 per cent. of the current issued share capital, has undertaken to maintain its percentage interest in the Company by subscribing for 11,785,000 ordinary shares in the Placing. Bendigo is a substantial shareholder in the Company under the AIM Rules for Companies and its subscription in the Placing is classified as a related party transaction. The Directors of GoldStone (excluding Tim Churcher who is a director of Bendigo) consider, having consulted with Westhouse, that the terms of the subscription by Bendigo are fair and reasonable insofar as shareholders are concerned.
Following the Placing, there will be 222,377,971 ordinary shares of 1p each in issue.
Jurie Wessels, Chief Executive Officer of GoldStone, commented:
"Together with the investment by Bendigo earlier this month, the Company is now well funded for the foreseeable future. The proceeds of the placing will provide us with the resources to execute target driven exploration to advance our projects, in particular the Homase gold project in Ghana. In addition, we are reviewing a number of further opportunities, focusing on gold in West Africa."
Enquiries:
| GoldStone Resources Ltd Jurie Wessels (Chief Executive Officer) | +27 21 551 9009
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| Westhouse Securities Limited Tim Feather | +44 20 7601 6100 | |
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| Orbis Equity Partners Limited Jeremy King Jason Robertson |
+44 20 3137 1902 +44 20 3137 1906 | |
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| Walbrook PR Ben Knowles Leah Kramer | +44 20 7933 8788
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