HGM.L Regulatory News (HGM)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION

For immediate release

20 October 2020

RECOMMENDED MANDATORY CASH OFFER

for

HIGHLAND GOLD MINING LIMITED ("HIGHLAND GOLD")

by

FORTIANA HOLDINGS LIMITED ("FORTIANA")

OFFER DECLARED WHOLLY UNCONDITIONAL

Fortiana is pleased to announce that the Condition to its Offer has now been satisfied and, accordingly, the Offer is now wholly unconditional.

Level of acceptances and interests in relevant securities

As at 1.00 p.m. today, being the acceptance deadline, Fortiana had received valid acceptances of the Offer in respect of a total of 143,976,514 Highland Gold Shares representing 39.56 per cent. of Highland Gold's issued share capital.

Of these, acceptances had been received in respect of a total of 20,000 Highland Gold Shares, representing, in aggregate, 0.01 per cent. of Highland Gold's issued share capital, which were subject to an irrevocable undertaking given by Duncan Baxter, Senior Independent Director of Highland Gold, to accept the Offer.

In addition to these acceptances, pursuant to the SPA:

· on 31 July 2020, Fortiana acquired 87,153,330 Highland Gold Shares, representing 23.95 per cent. of Highland Gold's issued share capital; and

· on 18 September 2020, Fortiana acquired 58,606,541 Highland Gold Shares, representing 16.11 per cent. of Highland Gold's issued share capital,

meaning as at the date of this announcement, Fortiana owns 145,759,871 Highland Gold Shares, representing 40.06 per cent. of Highland Gold's issued share capital.

Accordingly, as at 1.00 p.m. today, Fortiana has received acceptances in respect of Highland Gold Shares which, together with Highland Gold Shares acquired or agreed to be acquired before or during the Offer, result in Fortiana and any person acting in concert with it holding 289,736,385 Highland Gold Shares, representing 79.62 per cent. of Highland Gold's issued share capital.

Fortiana may count 289,736,385 Highland Gold Shares (carrying 79.62 per cent., and more than 50 per cent., of the voting rights in Highland Gold) towards satisfaction of the Condition to the Offer. Therefore, the Condition is satisfied.

So far as Fortiana is aware, no acceptances have been received from persons acting in concert with Fortiana.

Fortiana has no outstanding irrevocable undertakings or letters of intent in relation to the Offer.

Save as disclosed above, neither Fortiana nor any person acting in concert with Fortiana has:

· any interest in, or right to subscribe in respect of, or any short position (whether conditional or absolute and whether in the money or otherwise) in relation to the relevant securities of Highland Gold, including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of any relevant securities of Highland Gold; or

· borrowed or lent any relevant securities of Highland Gold.

The percentage of Highland Gold Shares referred to in this announcement in respect of which valid acceptances have been received is based on a total of 363,896,990 Highland Gold Shares in issue (excluding shares held in treasury).

Offer to remain open

The Offer will remain open for acceptance until 1.00 p.m. on 3 November 2020.

Highland Gold Shareholders who have not yet accepted the Offer are urged to do so without delay. If Highland Gold Shareholders wish to accept the Offer, it is important that they follow the instructions set out in Parts C and D of Part III of the Offer Document. Acceptances of the Offer in respect of certificated Highland Gold Shares should be made by completing and returning the Form of Acceptance as soon as possible and, in any event, by no later than 1.00 p.m. on 3 November 2020. Acceptances of the Offer in respect of uncertificated Highland Gold Shares should be made electronically through CREST so that the TTE Instruction settles as soon as possible and, in any event, by no later than 1.00 p.m. on 3 November 2020.

Further copies of the Offer Document and the Form of Acceptance may be obtained by contacting Computershare Investor Services PLC, Corporate Actions Projects, The Pavilions, Bridgwater Road, Bristol, BS99 6AH or on 0370 707 1066 (or +44 370 707 1066, if telephoning from outside the United Kingdom). Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 8.30 a.m. and 5.30 p.m., Monday to Friday excluding public holidays in England and Wales.

Settlement of cash consideration

As detailed in the Offer Document, settlement of cash consideration to which any Shareholder is entitled under the Offer will be effected:

· in the case of acceptances received, valid and complete to date, promptly following this announcement; and

· in the case of acceptances received, valid and complete in all respects after this date but whilst the Offer remains open for acceptance, promptly following receipt of such acceptance.

No cash consideration will be sent to an address in a Restricted Jurisdiction.

Intention to procure the cancellation of trading on AIM

As set out in the Offer Document, as Fortiana, by virtue of its shareholdings and valid acceptances of the Offer, has acquired or agreed to acquire Highland Gold Shares carrying 75 per cent. or more of the voting rights of Highland Gold, Fortiana intends to request that Highland Gold makes an application to the London Stock Exchange for the cancellation of the admission to trading of the Highland Gold Shares on AIM as soon as practicable. A further announcement will be made giving at least 20 business days' notice prior to the anticipated cancellation of the admission to trading on AIM.

The cancellation of the admission of Highland Gold Shares to trading on AIM will significantly reduce the liquidity and marketability of any Highland Gold Shares in respect of which the Offer has not been accepted. Any remaining Highland Gold Shareholders will become minority shareholders in a majority controlled company and will likely therefore be unable to sell their Highland Gold Shares. There can be no certainty that such minority Highland Gold Shareholders would again be offered an opportunity to sell their Highland Gold Shares on terms which are equivalent to or no less advantageous than those under the Offer.

Terms used but not defined in this announcement have the same meanings as in the Offer Document.

All the times referred to in this announcement are London times unless otherwise stated.

Enquiries:

Important notices relating to financial advisers

VTB Capital plc, which is authorised in the United Kingdom by the Prudential Regulation Authority and regulated in the United Kingdom by the Prudential Regulation Authority and the Financial Conduct Authority, is acting exclusively for Fortiana and no one else in connection with the Offer and this announcement, and will not be responsible to anyone other than Fortiana for providing the protections afforded to clients of VTB Capital plc nor for providing advice in connection with the Offer or this announcement or any matter referred to herein.

Further information

This announcement is for information purposes only and is not intended to and does not constitute, or form any part of, an offer to sell or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise.

The Offer is subject to English law and to the applicable requirements of the Code, the Panel, the AIM Rules, the London Stock Exchange and the FCA.

The Offer is being made solely by the Offer Document and the accompanying Form of Acceptance, which contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Any acceptance decision or response in relation to the Offer should be made solely on the basis of the Offer Document and the Form of Acceptance. Highland Gold Shareholders are advised to read the formal documentation in relation to the Offer carefully. Each Highland Gold Shareholder is urged to consult their independent professional adviser regarding the tax consequences of the Offer.

This announcement does not constitute a prospectus or a prospectus equivalent document.

This announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside England.

Notice to US holders of Highland Gold Shares

The Offer is being made to Highland Gold Shareholders resident in the United States in reliance on, and compliance with, Regulation 14E and the related rules promulgated under the US Securities Exchange Act of 1934, as amended (the "US Exchange Act"), and otherwise in accordance with the requirements of the Code, the Panel, the AIM Rules, the London Stock Exchange and the FCA. The Offer is being made in the United States by Fortiana and no one else.

The Offer relates to the shares of a Jersey incorporated company that is not registered under the US Exchange Act and is admitted to trading on AIM and is subject to disclosure and other procedural requirements, format and style which are different from those in the United States including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments.

However, Fortiana will, to the extent practicable, comply with US requirements where they relate to the timing of payments. Certain differences between the UK rules and US procedure are summarised at paragraph 14 of Part II and paragraph 9 of Part B of Part III of the Offer Document. For the avoidance of doubt, although the payment and settlement procedures with respect to the Offer are subject to the relevant UK rules, which differ from US payment and settlement procedures, Fortiana will, to the extent practicable, pay consideration promptly so as to comply with US requirements.

Financial information included in the 2.7 Announcement and the Offer Document has been or will be prepared in accordance with accounting standards applicable in Jersey and Cyprus as applicable, and may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

The receipt of consideration by a US holder for the transfer of its Highland Gold Shares pursuant to the Offer may be a taxable transaction for United States federal income tax purposes and under applicable United States federal, state and local, as well as non-US and other, tax laws. Each Highland Gold Shareholder is urged to consult their independent professional adviser immediately regarding any acceptance of the Offer including, without limitation, the tax consequences of the Offer applicable to them, including under applicable United States federal, state and local, as well as non-US and other, tax laws.

The Offer is made in the United States by Fortiana and no one else. Neither VTB Capital nor any of its affiliates will be making the Offer in or outside the United States.

It may be difficult for US holders to enforce their rights, effect service of process within the United States and/or enforce any claim and claims arising out of the US federal securities laws, since Highland Gold is incorporated under the laws of Jersey and Fortiana is organised under the laws of Cyprus, and the majority of the officers and directors of Highland Gold and Fortiana are residents of countries other than the United States. It may not be possible to sue Fortiana or Highland Gold, or any of their respective directors, officers or affiliates, in a non-US court for violations of US laws, including US securities laws. It may be difficult to compel Fortiana, Highland Gold and their respective directors, officers and affiliates to subject themselves to the jurisdiction of a US court. There is substantial doubt as to the enforceability in the United Kingdom or Jersey of original actions, or of actions for enforcement of judgments of US courts, based on civil liability provisions of US federal securities laws and judgments of a US court.

Neither the SEC nor any US state securities commission has approved or disapproved the Offer, or passed upon the fairness of the Offer or passed upon the adequacy or accuracy of the Offer Document. Any representation to the contrary is a criminal offence in the United States.

No offer to acquire securities or to exchange securities for other securities has been made, or will be made, directly or indirectly, in or into, or by the use of the mails of, or by any means or instrumentality of interstate or foreign commerce or any facilities of a national securities exchange of, the United States or any other country in which such offer may not be made other than: (i) in accordance with the tender offer requirements under the US Exchange Act, or the securities laws of such other country, as the case may be; or (ii) pursuant to an available exemption from such requirements.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.