10 Nov 2014 07:00
Weatherly International Plc
("Weatherly" or "the Company")
Fundraising via Subscription and Proposed Open Offer
Highlights
· Subscription with Polo Resources Limited ('Polo') to raise approximately £900,000.
· Intention to conduct an Open Offer to existing shareholders to raise up to approximately £3,800,000 before expenses.
· Polo conditionally committed to subscribe for a further approximately £2,223,000, subject to clawback, as part of the proposed Open Offer.
· Proceeds of the Subscription and Open Offer will provide additional working capital for the Company.
Subscription and Proposed Open Offer
Weatherly announces that it has agreed terms with Polo Resources Limited ('Polo') (AIM:POL) on a subscription agreement (the 'Subscription Agreement') for a subscription for new ordinary shares ('Ordinary Shares') of 0.5p each in the capital of the Company and further commitment to a conditional placing for new Ordinary Shares (subject to clawback) under the Open Offer. The subscription is for 30,830,257 new Ordinary Share of 0.5p each (the 'Subscription Shares') at a price of 2.925p per Subscription Share (the 'Subscription Price') to raise approximately £900,000 (the 'Subscription'). In addition, Polo has conditionally committed to subscribe for a further 76,007,350 new Ordinary Shares at the Subscription Price, subject to clawback depending on take up from existing shareholders, as part of the proposed Open Offer, being a further investment of approximately £2,223,000 (the 'Placing Shares').
The Board of Weatherly announces its intention to provide an opportunity for shareholders to participate in the fundraising by way of a 4 for 19 Open Offer of approximately 129.8 million new Ordinary Shares at a price of 2.925p each ('Open Offer Shares') to raise up to an additional approximately £3.8 million before expenses (the 'Open Offer'). Shareholders will be able to apply under the Open Offer for new Ordinary Shares in excess of their entitlements ('excess applications'). To the extent that pro rata entitlements to Open Offer Shares are not subscribed for by qualifying shareholders, such Open Offer Shares will be available to satisfy such excess applications and allocation will be at the discretion of the directors. Excess applications will be scaled back such that funds raised from the Open Offer will not exceed approximately £3.8 million.
To the extent that Weatherly is unable to deliver all or any of the Placing Shares due to take-up of entitlements by existing shareholders under the Open Offer, Polo shall have the right to subscribe for any such shortfall at the Subscription Price for a period of three months from the date of the Subscription Agreement. In the event that there is a shortfall under the Open Offer after allocation of the Placing Shares, then Polo shall have the right to subscribe for such shortfall. In addition, in the event that the Company decides to undertake a future equity fundraising, the Company has granted Polo a priority right to subscribe for up to 30,830,250 Ordinary Shares at a future date, the timing and pricing of such subscription to be agreed at such future date.
As part of the Subscription Agreement Polo, for so long as it has an interest in not less than 10 per cent. of the Company's issued share capital, may appoint two non-executive directors to the Board. On the basis of the Subscription Shares and the Placing Shares, being Polo's allocation in respect of the proposed Open Offer which is otherwise fully subscribed, Polo's holding will be 106,837,607 Ordinary Shares, representing approximately 13.75 per cent. of the enlarged share capital. In the event that there are no applications or other placees under Open Offer and Polo exercises its right to take all the shortfall, Polo's holding will be 160,641,866 Ordinary Shares, representing approximately 20.7 per cent of the enlarged share capital.
Relative to the closing mid-market price per Ordinary Share on the London Stock Exchange on 7 November 2014 (the last business date prior to this announcement) of 3.75p, the offer price under the Subscription and the Open Offer represents a discount of approximately 22 per cent. Relative to the 20-day volume weighted average price for the period ending 7 November 2014 of 3.18p, the offer price represents a discount of approximately 8 per cent.
The proceeds from the Subscription and Open Offer will be used for the purposes of general working capital. There is a strong case for accelerating the waste stripping in order to provide greater certainty that the Company's Tschudi project will achieve its stated targets. To do this, it will most likely be necessary to draw down on the Orion US$8 million overrun facility which requires the Company to contribute on a dollar for dollar basis. The minimum raising under the Open Offer, combined with the Company's existing cash reserves, ensures that the overrun facility can be fully utilised, making available a cash reserve of US$16 million to deal with the above and any commissioning issues that may arise.
Further announcements will be made by Weatherly, including an announcement detailing the expected timetable in connection with the Open Offer, in due course.
Further Details on the Subscription
The Subscription is conditional inter alia upon the admission of the Subscription Shares to trading on AIM ("Admission") becoming effective by no later than 31 December 2014 and the Weatherly having allotted the Subscription Shares and Placing Shares.
The Subscription proceeds are expected to be received on or around 8 December 2014.
Application will be made to the London Stock Exchange for Admission. It is expected that Admission will become effective on or around 8 December 2014 and that dealings in the Subscription Shares will commence at 8.00 a.m. on that date.
The Subscription Shares will be issued credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid after Admission and will otherwise rank on Admission pari passu in all respects with the existing Ordinary Shares in the capital of the Company.
The Subscription Shares will not be entitled to participate in the Open Offer.
Rod Webster, CEO of Weatherly, "Having Polo as a cornerstone investor is a welcome vote of confidence not only in the Tschudi project but Weatherly as a whole. I look forward to working with Michael and his colleagues as we take Weatherly to the next stage of its development. As we reminded investors last week, we are on track to commence production from Tschudi in the second quarter of 2015."
Michael Tang, Executive Chairman of Polo, said "This is an excellent opportunity for Polo to add copper to our portfolio of investments where Weatherly is at a real turning point in its corporate development. The Tschudi Copper Mine in Namibia is set to enter production in 2015 and to add 17,000 tons of copper production to Weatherly's production output. Namibia remains one of Africa's best mining investment jurisdictions."
For further information please contact:
Weatherly International Plc +44 (0) 20 7917 2989
Rod Webster, Chief Executive Officer
Kevin Ellis, CFO and Company Secretary
RFC Ambrian Limited +44 (0) 20 3440 6800
(Nominated Adviser & Broker)
Samantha Harrison / James Biddle
Finncap +44 (0) 20 7220 0514
(Joint Broker)
Joanna Weaving
Blytheweigh +44 (0) 20 7138 3204
(Financial PR)Tim Blythe / Halimah Hussain
About Weatherly
Weatherly is an AIM listed, copper mining company, its principal assets are located in Namibia. It currently has two underground copper mines (Otjihase and Matchless), and is developing the much larger Tschudi open cut mine in the north of the country. These assets will enable Weatherly to achieve its medium term strategy of establishing a copper mining business capable of sustaining approximately 25,000tpa of copper production. The Company also has a 25% stake in AIM listed company, China Africa Resources Plc (AIM: CAF), which is currently developing a lead/zinc project at Berg Aukas in northern Namibia.
About Polo
Polo Resources Limited is a natural resources investment company focused on investing in undervalued companies and projects with strong fundamentals and attractive growth prospects. For complete details on Polo, refer to: www.poloresources.com.
RFC Ambrian Limited ('RFC Ambrian') and Finncap Limited (''Finncap") (each of which is regulated in the UK by the Financial Conduct Authority) are acting exclusively for Weatherly in connection with the requirements of the AIM Market and the UK Listing Authority and for no one else and will not be responsible to any other person for providing the protection afforded to customers of RFC Ambrian or Finncap respectively nor for providing advice in connection with this announcement.
Participation in the proposed Open Offer will not be available to shareholders resident in the United States, Australia, Canada, South Africa or Japan or any other jurisdiction where it would be unlawful to offer participation.
This announcement does not constitute, or form part of, an offer of, or the solicitation of any offer to subscribe for or buy, any of the Ordinary Shares to be issued or sold in connection with the Open Offer.
This announcement does not constitute a prospectus or prospectus equivalent document. Nothing in this announcement should be interpreted as a term or condition of the Open Offer. A circular relating to the Open Offer will be prepared and made available to shareholders. Any decision to invest in Weatherly under the Open Offer must be made only on the basis of the information contained in the circular.
This announcement contains certain "forward‐looking statements" regarding the belief or current expectations of the Group, the Directors and other members of its senior management about the Company's financial condition, results of operations and business and the transactions described in this announcement. Generally, but not always, words such as "may", "could", "should", "will", "expect", "intend", "estimate", "anticipate", "assume", "believe", "plan", "seek", "continue", "target". "goal", "would" or their negative variations or similar expressions identify forward‐looking statements.
Such forward‐looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Company and are difficult to predict, that may cause the actual results, performance, achievements or developments of the Company or the industries in which it operates to differ materially from any future results, performance, achievements or developments expressed or implied from the forward‐looking statements.
The offer of securities in certain jurisdictions may be restricted by law and therefore potential investors should inform themselves about and observe any such restrictions. This announcement is not for publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, Japan, New Zealand, South Africa, Switzerland or any other jurisdiction in which such publication or distribution would be a violation of the relevant laws of such jurisdiction. This announcement is for information only and does not constitute an offer or invitation to acquire or dispose of securities in the United States, Australia, Canada, Japan, New Zealand, South Africa or Switzerland or any other jurisdiction in which such offer or invitation would be a violation of the relevant laws of such jurisdiction. In particular, this announcement does not constitute or form part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein (the "Securities") have not been and will not be registered under the US Securities Act of 1933, as amended ('the Securities Act'), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any relevant state securities laws. There will be no public offer of Securities in the United States.
Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.
The distribution of this announcement may be restricted by law. No action has been taken that would permit the possession or distribution of this announcement in any jurisdiction where action for that purpose is required.