SNRP.L Regulatory News (SNRP)

10 June 2014

Strategic Natural Resources plc

("Strategic Natural Resources" or the "Company")

Posting of Circular and Beaufort placing update

Posting of circular

The Board of Strategic Natural Resources has yesterday posted to shareholders a circular ( the "Circular") convening a general meeting, to be held at 10.00am on 30 June 2014 at the offices of Memery Crystal LLP, 44 Southampton Buildings, London, WC2A 1AP, details of which were announced by the Company on 06 June 2014. An extract of the Circular, detailing the reasons for seeking an increase in the Company's share authorities, is provided below. A copy of the Circular is also available from the Company's website, www.snrplc.co.uk.

Beaufort placing update

The Company has agreed with Beaufort Securities Limited ("Beaufort") to an extension of the settlement terms of the 6,250,000 Further Beaufort Placing Shares at 4p per ordinary share, further details of which were announced on 13 May 2014, such that Beaufort will be issued 2,500,000 new ordinary shares on 11 June 2014, for a consideration of £100,000 and will be issued the balance of 3,750,000 ordinary shares on 18 June 2014, for a consideration of £150,000.

For further information, please contact:

NB: Definitions in this announcement shall have the same meaning as defined in the Company's announcement on 13 May 2014, unless otherwise defined herein.

Extract from the Circular

Introduction

We are writing to set out the proposed strategy of your Board of Directors (the "Directors" or the "Board")) for the Company, to ask the Company's shareholders (the "Shareholders") to approve resolutions (the "Resolutions") to grant the Directors authority to allot shares to enable them to execute this strategy and to explain why the Directors consider that passing the Resolutions would be in the best interest of Shareholders.

Proposed Strategy

SNR's immediate priority is to satisfy all its creditors and thereby provide long term stability to both the Company's financial position and its share price. Whilst the first round of funding by Target Alliance and Beaufort Securities has gone a long way in alleviating the situation, it is clear that additional funding is required. The Board is currently in negotiations with several parties to meet this end. Whilst these discussions are on-going, the Board is reasonably confident that sufficient funding to meet the outstanding creditors and provide sufficient working capital for SNR and Elitheni Coal will be attained. At the same time, your Board is considering several options in relation to bringing the Elitheni Coal project into sustainable long term production. These discussions involve joint venture partnerships to supply coal to local industrial entities as well as export markets and the possibility of building a nearby coal fired power station for the region.

Background

On 13 May 2014, we announced £1,500,000 of investment into SNR by way of equity subscriptions at 4 pence per ordinary share of 1 penny each ("SNR Shares") and various agreements with creditors pursuant to which SNR agreed to allot SNR Shares to creditors. In total, SNR has agreed to allot 51,000,000 SNR Shares to investors and creditors.

In addition, as part of the extension to the repayment date of the £6,000,000 loan the Company owes to Land Consultants Limited ("LCL"), the Company and LCL agreed that LCL could capitalise up to £2,000,000 of the interest it is owed by the Company into SNR Shares at a price of 4 pence per SNR Share (the "Conversion Right"). The Conversion Right was granted conditionally upon approval of Shareholders, on the proviso that if it was not approved by Shareholders prior to 13 August 2014, the Company would be in default under the terms of its facility agreement with LCL.

On 17 December 2013, Shareholders authorised the Directors to allot 90,000,000 SNR shares at the Company's Annual General Meeting. To date 51,000,000 of this authority has been utilised or is needed to satisfy the arrangements with investors and creditors set out above, leaving 39,000,000 SNR Shares available to Directors to allot. There is therefore insufficient authority to grant the Conversion Right to LCL and to allow the Directors to execute their proposed strategy.

It is therefore proposed to seek authority from Shareholders to authorise the Directors to:

(a) grant the Conversion Right exercisable over 50,000,000 SNR Shares; and

(b) allot a further 61,000,000 SNR Shares for cash on a non pre-emptive basis.

This is in addition to the remaining existing authority to allot 39,000,000 SNR Shares. If the Resolutions were passed the Directors would have the authority to allot a further 100,000,000 SNR Shares representing 36.8 per cent. of the issued share capital, assuming the Conversion Right has been exercised in full and the 51,000,000 SNR Shares the Company has committed to allot to investors and creditors have been allotted in full.

Reasons for not carrying out a pre-emptive issue

The Directors have considered the most appropriate method to conduct future fundraisings, including carrying out a placing and open offer or a rights issue. The Directors concluded that the time and costs associated with a pre-emptive offer were not in the best interests of the Company. After careful consideration, they concluded that the benefit of minimising the costs of any fundraising by way of a non pre-emptive cash placing would be in the best interests of Shareholders.

General Meeting

A notice convening the General Meeting, which is to be held at the office of Memery Crystal LLP, 44 Southampton Buildings, London, WC2A 1AP at 10 a.m. on 30 June 2014, is set out at the end of this document. At the General Meeting, the following resolutions will be proposed:

1. Resolution 1 is an ordinary resolution to authorise the Directors to:-

(a) grant LCL the Conversion Right exercisable over 50,000,000 SNR Shares; and

(b) allot and issue up to 61,000,000 SNR Shares with an aggregate nominal value of up to £610,000.

2. Resolution 2 is a special resolution to empower the Directors to issue and allot shares pursuant to the authority conferred by resolution 1, on a non pre-emptive basis, such authority being limited to:

(a) the grant to LCL of the Conversion Right exercisable over 50,000,000 SNR Shares; and

(b) the allotment of up to 61,000,000 SNR Shares with an aggregate nominal value of £610,000.