21 Jan 2014 07:00
21 January 2014
Sovereign Mines of Africa Plc
("Sovereign Mines" or "the Company")
Sovereign Mines increases it's shareholding in Guinea subsidiary to 75%
Further to the announcement of 20 December 2013, Sovereign Mines of Africa Plc, the gold mining exploration company with properties in the Republic of Guinea in West Africa, is pleased to announce that it has increased its equity holding in its subsidiary company, Sovereign Mines of Guinea Limited ("SMG"), from 60 per cent. to 75 per cent.
The Company has agreed to capitalise £2,784,000 of the inter-company loan (the "SMG Loan"), which has been provided by the Company to SMG, in order to fund the exploration activities and running costs of SMG since its incorporation, by the issue of 120 new shares in SMG to Sovereign Mines. The terms of the capitalisation are on the same basis as the exchange of shares in SMG for new shares in the Company announced on 20 December 2013.
Following these transactions, SMG now has 320 shares in issue. 240 shares, equivalent to 75 per cent. of the shares capital of SMG, are held by the Company and the remaining 80 shares continue to be held by SOGUIPAMI, the Republic of Guinea's state-owned mining firm.
The capitalisation of the SMG Loan is a related party transaction for the purposes of the AIM Rules. The Board of Sovereign Mines, other than David Pearl and John Barry (as directors of SMG), comprising the Independent Directors, consider, having consulted with the Company's nominated adviser, Shore Capital & Corporate Limited, that the terms of the capitalisation of the SMG Loan are fair and reasonable insofar as the Company's shareholders are concerned.
David Pearl, Chairman of SMA, said:
"We are delighted to have further increased our stake in Sovereign Mines of Guinea, especially at such an exciting time for the Company following the recent announcement of a maiden resource with outstanding grades and deep oxides as well as the subsequent acquisition of the adjoining concession, which further increases the potential of our gold property at Mandiana Magana."
ENDS
Enquiries:
Sovereign Mines of Africa PLC:
David Pearl F.C.A. - Chairman +353 696 8961david.pearl@sovmines.comJohn Barry - Exploration Director +353 8 7669 5608Nathan Steinberg - Finance Director +44 20 7269 7680
Shore Capital - Nominated Adviser & BrokerToby Gibbs / Bidhi Bhoma - Corporate FinanceJerry Keen - Corporate Broking +44 20 7408 4090
Square 1 Consulting LimitedDavid Bick / Mark Longson +44 20 7929 5599
Newgate ThreadneedleGraham Herring / Alex White +44 20 7653 9858
About Sovereign Mines:
Sovereign Mines of Africa Plc is a mineral exploration company incorporated in England and Wales and headquartered in London
At the end of 2007, the founders of the Company saw an opportunity to pool their collective expertise and experience in order to form joint ventures for mineral exploration with governments in Africa. The Republic of Guinea in West Africa was identified as the first target and this ultimately gave rise to the establishment of the Company in 2010.
The Company has entered into a cooperative joint-venture with the Government of Guinea (the "Sovereign Partnership Structure"), pursuant to which the Government was granted an equity stake in Sovereign Mines of Guinea, the operating company of the group. The Directors believe that this collaborative approach gives the Company unusual advantages compared with other small exploration companies and as a result it has been able to acquire early stage substantial and highly prospective properties, any of which could, in the Directors' opinion, become a significant gold asset.