Shefa Gems Regulatory News (SEFA)

B"H

20 February 2020

Shefa Gems Ltd.

("Shefa Gems" or the "Company")

Convertible Loan Agreement

Shefa Gems (LSE: SEFA), a company focused on advanced exploration and development of multi-gemstone projects in Northern Israel, is pleased to announce that it has entered into a convertible loan agreement over the provision of a further US$250,000 (approximately £192,300) (the "Agreement") with an existing lender to the Company ("the Lender") for working capital purposes and to fund the continued development of the Company.

Terms of the Loan

Pursuant to the Agreement, the Lender has agreed to provide a further loan of US$250,000 (approximately £192,300) (the "Loan"). Following the provision of the Loan, the Lender will have leant $600,000 to the Company in aggregate (following the provision of a loan of $350,000 as announced by the Company on 28 January 2020).

The Loan, together with rolled up interest at 5%, is convertible into ordinary shares of the Company at a share price of 5 pence per share at any time until 31 May 2020. The Loan will be non-transferable. However, the lender can choose, at their sole discretion, to delay conversion to any time until 31 May 2021.

In the event that the Lender was to convert their loans into Ordinary shares in the Company, they could hold up to 9,350,000 Ordinary shares in the Company representing 4.7 per cent of the Company's issued share capital following such conversion.

Following conversion, the Company will grant the Lender one unlisted warrant for every share received on conversion, exercisable for a period of 24 months from the date of the conversion, at a price of 10 pence per warrant. In the event that the Company's share price during the period 24 months after conversion, does not at any time reach 10 pence per share, the Lender will receive additional shares after 24 months in such an amount as to make the total number of shares issued to the Lender have a value, based on the market price at that time, of £384,600.

Vered Toledo, CEO of Shefa Gems, said: "We are pleased with our valued supporters. These are lenders who wanted to increase the loan they made on January 28, 2020 amounting to $350,000. The additional cash resources will support the Company's working capital purposes, in addition to supporting the development of our Project in the Kishon Mid-Reach area."

- Ends -

Enquiries

Notes to Editors

About Shefa Gems Ltd

Shefa Gems Ltd (LSE: SEFA) is an explorer and developer of precious stones deposits operating in Northern Israel. Exploration activity is managed by professionally skilled and technically competent personnel and is accompanied by an international team of geological experts with decades of proven experience in their fields. It has two flagship projects, Mount Carmel and the Kishon Reach.

With its international geological consultant team, Shefa Gems has established a "Source to Sink" geological model and the presence of a Target Mineral Assemblage of gemstones ("TMA Suite") in both primary volcanic sources and in secondary alluvial deposits lying within the Kishon catchment, on Mount Carmel and in the Zevulun and Yizre'el valleys and their margins. The TMA suite comprises Precious Stones (Diamond, rare natural moissanite, sapphire, ruby, Carmel Sapphire™, garnet, hibonite, spinel, ilmenite) and heavy minerals including zircon and rutile.

All exploration activities are conducted under international standards and the internationally recognised SAMREC 2016 Code. Its three permits, granted to it by the Commissioner of Mines at the Ministry of Energy, Natural Resources Administration, Israel, extend over an area of approximately 488,366 Dunams (48,836 hectares) that includes the Kishon River, the volcanic bodies on Mount Carmel, the Zevulun and Yizre'el valleys and their margins. 

Alongside its exploration activities, the Company is building on the launch of the "Heaven on Earth" jewellery collection and developing the Company's "Mine to Market" strategy to promote unique jewellery collections utilising Shefa Gems' suite of precious gemstones.

The Company upholds environmental values and protects the nature in the areas where it operates, cooperating fully with all authorities.

The exclusive "Heaven on Earth" collection is now available to view online on the website of the designer Yossi Harari at: https://www.yossiharari.com/collections/heaven-on-earth-1

For further information please visit the website at www.shefagems.com