14 Feb 2020 07:00
14 February 2020
Pembridge Resources plc
Pembridge Loan to Minto Update
and
Execution of new Facility C to Convertible Loan Agreement with Gati Al-Jebouri
London, United Kingdom - Pembridge Resources plc (LSE: PERE) ("Pembridge" or the "Company"), and together with its subsidiaries, the "Group"), is pleased to provide the following update with respect to its funding obligations to Minto Explorations Ltd ("Minto") and working capital requirements:
Pembridge Loan to Minto Update
As announced on 11 December 2019, Pembridge will loan Minto £2.3 million (US$3.0 million) for the purpose of funding Minto's surety bond collateral commitments. Pembridge confirms that, to date, the Company has loaned £1.73 million (US$2.25 million) to Minto, with the remaining fully funded balance of £0.57 million (US$0.75 million) expected to be made within the next 60 days.
The £2.3 million (US$3.0 million) loan to Minto fulfils the Company's obligation under the Shareholders' Agreement dated 3 June 2019 between Pembridge, Minto, Copper Holdings, LLC ("Copper") and Cedro Holdings I, LLC ("Cedro") (collectively the "Shareholders' Agreement"), and prevents the potential pro-rata dilution of the Company's economic interest in Minto down to 11%, thereby maintaining Pembridge's current economic interest at 33%.
The remaining £0.57 million (US$0.75 million) loan to Minto will be made from existing Pembridge cash reserves, having successfully raised net proceeds of £3.5 million in Q4 2019 through both a £2.5 million equity placing and £1.0 million convertible loan Facility A (as announced on 11 December 2019). Additionally, as announced on 30 October 2019, Pembridge has a further £700,000 available under Facility B of the Convertible Loan Agreement, which has now been fully drawn down to fund ongoing working capital.
The loan made by Pembridge to Minto will be repaid once Minto has repaid the existing US$10 million loans provided to Minto by Copper and Cedro, as per the Shareholders Agreement announced on 3 June 2019, such repayment expected to start in 2021. In the event that Minto may require further short-term working capital finance beyond the US$3.0 million, under the Shareholders' Agreement Pembridge, Copper and Cedro each will be required to provide such funding as interest-free loans in the proportions of their respective economic interests in Minto, being 33% each.
Execution of new Facility C to Convertible Loan Agreement with Gati Al-Jebouri
A new Facility C of the Convertible Loan Agreement in the amount up to £2.0 million has been approved by the Pembridge Board of Directors and entered into on 13 February 2020. The purpose of the new Facility C is to fund reviews of new investment opportunities as well as ongoing working capital needs. The Facility C is substantially on the same terms as Facility A and B (as announced on 30 October 2019) and carries interest at an annual rate of 8% to be paid in arrears on the last day of each month. The Company shall pay to the Lender an arrangement fee in the amount of 6% of the amounts drawn down under the Facility C of the Convertible Loan.
In addition, the Company has agreed to use its best endeavours to obtain a waiver from the Takeover Panel under Rule 9 of the Takeover Code, subject to receiving requisite approval of the Company's shareholders, in order for the Company to issue shares upon conversion that would result in the lender owning more than 29.9% of the Company's shares, and the lender has agreed that the loan would not be convertible to such extent until the earlier of the date such waiver is obtained or 31 August 2020. The waiver from the Takeover Panel under Rule 9 of the Takeover Code will seek to cover the conversion of the Convertible Loan as well as future on market share purchases by Gati Al-Jebouri.
Gati Al-Jebouri, Chief Executive Officer and Chairman of the Board said:
"The amount raised in Q4 2019 and subsequently loaned to Minto has mitigated the risk of significant dilution at project level following relist. We will continue to work on developing the best operating strategy for Minto as we get more data back from the drilling and analysis of the MAG survey results. The Facility C funds will ensure that we are in a position to commence and review any new acquisition opportunities as they arise and cover all our working capital needs for the foreseeable future."
ENDS
NOTES TO EDITORS
About Pembridge Resources plc
Pembridge is a mining company that is listed on the standard segment of the Official List of the FCA and trading on the main market for listed securities of London Stock Exchange plc. Minto, a subsidiary of Pembridge, is a British Columbia incorporated business operating the Minto mine in Yukon, Canada. Pembridge owns 33% (in Class A shares) of Minto.
About Minto Explorations Limited
Minto operates the underground copper-gold-silver mine located in central Yukon, approximately 240 kilometres north of the capital Whitehorse along the Klondike Highway. In excess of US$350 million of capital expenditure has been invested into Minto operations since site construction began in 2006. The Minto mine was in continuous production between 2007 and 2018, when the mine was placed onto temporary care and maintenance. Pembridge acquired Minto from Capstone Mining Corporation in June 2019 and restarted operations in October 2019.
About Copper Holdings LLC
Copper Holdings is a private investment vehicle based in New York run by a team of experienced mining investors. Copper Holdings owns 33% (in Class B shares) of Minto.
About Cedro Holdings I LLC
Cedro Holdings I, LLC is an entity managed by Lion Point Capital, a registered investment adviser based in New York that seeks to invest throughout the capital structure of public and private companies globally. Cedro Holdings I owns 33% (in Class B shares) of Minto.
For further information contact:
Pembridge Resources plc: +44 (0)20 7917 2968
Gati Al-Jebouri, Chief Executive Officer and Chairman of the Board
David James, Chief Financial Officer
Brandon Hill Capital - United Kingdom: +44 (0)20 3463 5016
Jonathan Evans
SI Capital - United Kingdom: +44 (0)14 8341 3500
Nick Emerson