Keras Res Regulatory News (KRS)

Keras Resources plc / Index: AIM / Epic: KRS / Sector: Mining

27 August 2019

Keras Resources plc ('Keras' or the 'Company')

Fundraising of £350,000 and Conversion of Director Loans

Keras Resources plc, the AIM listed mineral resource company, is pleased to announce that it has raised £350,000 (before expenses) through the placing of 87,500,000 ordinary shares of 0.1p each ("Ordinary Shares") at a price of 0.4p per Ordinary Share (the "Placing Shares") (the "Placing").

Additionally, David Reeves and Brian Moritz have agreed to convert £458,900 in loans due to them, primarily in respect of cash advanced to the Company as working capital loans, into new ordinary shares of the Company at the same price as the Placing Shares. As such, the Company intends to issue 114,725,000 Ordinary Shares to Directors (the "Directors Conversion Shares"). The Placing Shares and Director Conversion Shares represent approximately 8.12% of the Company's issued share capital as enlarged by the Placing and Director Conversion Shares.

The capital raised will be used to fund the costs associated with the proposed distribution of the Company's shareholding in Australian Securities Exchange ('ASX') listed Calidus Resources Ltd ('CAI') and for ongoing working capital purposes. The proposed distribution of the CAI shares requires shareholder and court approval. The amounts being capitalised are the only material debt owed by the Company and the capitalisation will therefore facilitate court approval of the capital reduction required to demerge the CAI shares.

Russel Lamming, CEO of Keras Resources, said, "The year to date has been highly productive and I believe the rest of 2019 will be transformational: the proposed demerger of our 724m Calidus shares, in tandem with our transition from explorer to producer (subject to the grant of an exploitation permit), will see significant value released to shareholders and manganese focussed Keras will become a cashflow positive mining company.

"The Nayega bulk sample plant has the capacity to produce 75,000 tons per annum of beneficiated manganese; on receipt of the exploitation permit, Keras plans to expand and improve the plant to add more value and increase production. The intention is to fund this in conjunction with an offtake agreement rather than equity. We continue to engage with the Togolese authorities with respect to the Nayega permitting and it is important to note that Togo has also had a transformational year following accreditation by Moody's Investors Service with a B3 credit rating and a single-B rating with a stable outlook from Standard & Poor. This puts the country of eight million people on a par with its neighbour Ghana.

"Finally, I think it is important to highlight that the last capital raise was in October 2017 and, through the implementation of cost-effective operations and third party non-dilutive funding, the Company is now in a position deliver value to shareholders. We have raised the funds to enact the next stage in our genesis and I would like to thank both Dave and Brian for their continued financial support to the business having converted their outstanding loans and Director fees, which not only leaves us materially debt free but I believe underpins the value of Keras as an investment opportunity."

Details of the Placing

Application will be made for admission of the 202,225,000 new Ordinary Shares to trading on the AIM Market of the London Stock Exchange ("Admission"). It is anticipated that Admission will take place on 10 September 2019. The Placing Shares and Director Conversion Shares will rank pari passu with the existing Ordinary Shares, which are currently traded on AIM.

Following Admission, there will be 2,491,358,439 Ordinary Shares in issue with each share carrying the right to one vote. There are no shares currently held in treasury. The total number of voting rights in the Company will therefore be 2,491,358,439 and this figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Rules and Transparency Rules.

Holdings in Company

Following Admission, the beneficial shareholding of the Company's Directors will be as follows:

Mr. Brian Moritz is a Non-Executive Chairman of the Company and Mr David Reeves is a Non-Executive Director of the Company, and they are both therefore regarded as a related party as defined by the AIM Rules for Companies (the "AIM Rules"). The issue of the Director Conversion Shares is therefore classified as a related party transaction for the purposes of Rule 13 of the AIM Rules. Mr Russell Lamming, being the independent director for the purposes of Rule 13, considers, having consulted with the Company's Nominated Adviser, SP Angel Corporate Finance LLP, that the terms of the related party transaction are fair and reasonable insofar as the shareholders of the Company are concerned.

New Corporate Presentation

A new corporate presentation will be available shortly on the Company's website and can be viewed at www.kerasplc.com/investor-presentations.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of Russell Lamming, Chief Executive Officer. This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

**ENDS**

For further information please visit www.kerasplc.com, follow us on Twitter @kerasplc or contact:

Notes

Keras Resources plc is focused on building a strategic portfolio of resource assets. The Company provides investors with exposure to the near-production Nayega manganese mine ('Nayega') and the Kamino, cobalt and nickel project in Togo, West Africa. It also has a significant interest in Calidus Resources Limited, a highly prospective gold exploration and development company in Australia, which completed a Pre-Feasibility Study at its Warrawoona gold project in July 2019. Keras benefits from a supportive Board of Directors currently owning 25.8% of the Company and a highly skilled management team, which has extensive operational experience in Africa and Australia and proven success in advancing assets up the value curve.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

NOTIFICATION AND PUBLIC DISCLOSURE OF TRANSACTIONS BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITIES AND PERSONS CLOSELY ASSOCIATED WITH THEM: