30 Jun 2010 09:35
| AIM: GMA | 30 June 2010 |
GMA Resources plc
("GMA" or the "Company")
Subscription to raise £1.6 million and amendments to the terms of 2010 and 2011 Loan Stock
§ Subscription to raise £1.6 million
§ Existing shareholder, Sahara Gold, investing a further £1.5 million and Ken Crichton, Interim CEO, investing £0.1 million
§ Maturity date and interest payments under existing loan stock to be deferred until December 2012
GMA announces that it has today entered into subscription agreements ("the Agreements") with Sahara Gold Limited ("Sahara Gold"), a wholly owned subsidiary of ASCOM Precious Metals Mining S.A.E. ("APM") which has agreed to subscribe or procure that members of its group subscribe for up to 120,000,000 new ordinary shares of £0.01 each ("Ordinary Shares") at 1.25 pence per share, and Ken Crichton, the Company's Interim CEO and an employee of APM, who has agreed to subscribe for 8,000,000 Ordinary Shares at 1.25 pence per share (together the "Subscription Shares").
The Subscription Shares will be issued in four separate tranches and will represent, in aggregate, 21.44 per cent of the issued share capital of the Company as enlarged by the subscription. The first tranche of the Subscription Shares will be issued on or around 27 July 2010, raising £505,000 for the Company (before expenses). The aggregate subscription proceeds of £1.6 million (before expenses) will be used to meet the Company's working capital requirements for the next 12 months.
Subject to satisfaction of the conditions, the Subscription Shares will be subscribed and issued in the following tranches and on the following dates, unless, in respect of the second, third and fourth subscription dates only, Sahara or Ken Crichton elects to subscribe on an earlier date:
| Subscription Date | Number of Subscription Shares | Subscription Proceeds |
| 27 July 2010 | 40,400,000 | £505,000 |
| 21 October 2010 | 38,000,000 | £475,000 |
| 21 January 2011 | 26,000,000 | £325,000 |
| 21 April 2011 | 23,600,000 | £295,000 |
The Agreements are conditional, inter alia, on the approval of the resolutions (1) to authorise the allotment of the Subscription Shares to be proposed at an extraordinary general meeting ("EGM") of the Company to be held on 26 July 2010 and (2) to amend the terms of the 10 per cent. unsecured convertible loan stock 2010 ("Loan Stock 2010") and the 15 per cent. unsecured convertible loan stock 2011 ("Loan Stock 2011") currently in issue (together, the "Loan Stock"), so that the maturity date of the Loan Stock is deferred until 21 December 2012, along with all interim interest payments, whereupon all such interest payments that have accrued up to and including that date shall become immediately payable, to be proposed at class meetings of the holders of the Loan Stock 2010 and the Loan Stock 2011, to be held on 26 July 2010 immediately prior to the EGM.
The first and subsequent tranches of the subscription will also be conditional upon, inter alia, GMA confirming that the warranties in the Agreement with Sahara remain true and accurate, no material adverse change occurring in the financial or trading position of GMA or its subsidiaries and the Tirek carbon in leach plant commencing commercial operations by 1 September 2010.
The majority of Loan Stock holders have already signed letters confirming that they are in principle in agreement with the proposals to vary the terms of the Loan Stock.
The Agreement with Sahara also gives it the right to appoint a director to the board of the Company following Admission of the first tranche of Subscription Shares and also a right of first refusal on any future equity share issues by the Company up to the date eighteen months following the date of the Agreement with Sahara. In addition if GMA issues any equity securities, prior to 2 May 2011, at a price of less than 1.25 pence per share, the subscription price for any subsequent tranches of Subscription Shares to be subscribed by Sahara shall be reduced or further shares will be issued at nominal amount to maintain Sahara's shareholding percentage. In addition, GMA has also undertaken not to carry out certain prescribed actions without first obtaining the prior written consent of Sahara including seeking authority under the Companies Act 2006 to allot shares and disapply the statutory pre-emption rights.
The Company has agreed to pay Sahara a fee of £75,000 which will be set off against the proceeds of the first two tranches under the Subscription.
Following admission of the fourth and final tranche of the Subscription Shares, Sahara and Ken Crichton will be interested in a total of 162,636,624 Ordinary Shares and 8,000,000 Ordinary Shares respectively, representing 27.24 per cent. and 1.34 per cent. respectively of the Company's issued voting share capital, as enlarged by the Subscription.
Application will be made for the first tranche of the Subscription Shares to be admitted to trading on AIM ("Admission") following the EGM, conditional on the resolutions being passed without amendment at the EGM and class meetings. Admission of the first tranche of the Subscription Shares is expected to become effective on 27 July 2010.
David Netherway, Chairman of GMA, said:
"We are extremely pleased to have concluded this financing with APM, through its vehicle Sahara, which will soon be our largest shareholder. We are also grateful for the support we have received to date from Loan Stockholders and look forward now to the coming year with confidence.
"Ken Crichton has made a significant difference to the Company since he joined and his participation in this financing shows his commitment and belief in the future of GMA."
ENQUIRIES:
| GMA Resources Plc | David Netherway (Chairman) Ken Crichton (Interim CEO) | +27 72 186 1765 +2 (0) 10766 6118 |
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| Merchant John East Securities Limited (Nomad) | Bidhi Bhoma | +44 (0) 20 7628 2200 |
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| Mirabaud Securities LLP (Broker) | Jonathan Colvile | +44 (0) 20 7484 3510 |
Notes to Editors:
GMA owns a controlling 52% stake in ENOR spa ("ENOR"), the Algerian based operating company for the Tirek-Amesmessa project, with the remainder owned by Sonatrach, the Algerian state-owned oil and gas company.
ENOR holds the exploitation authorisation to the Tirek-Amesmessa property, an area of some 1,417 km2, located approximately 450km south west of the city, Tamanrasset, in southern Algeria. Amesmessa is an open pit heap leach gold mine located in the extreme south of the permit area. The now closed Tirek mine site is located centrally in the northern third of the exploration permit area, some 60 km north of Amesmessa. Research to date suggests that the Zita Zone, which lies between Tirek and Amesmessa, offers considerable potential for the development of additional prospects amenable to open-pit mining. GMA plans to quickly expand upon resources outside of the major 80km Tirek-Amesmessa fault north/south of the concession.
GMA's shares are traded on the AIM market of the London Stock Exchange (AIM: GMA).
For further information on the Company, please visit: www.gmaresources.co.uk