SRX.L Regulatory News (SRX)

THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

Neither this announcement nor any part of it constitutes an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire any new ordinary shares of Sierra Rutile Limited in any jurisdiction in which any such offer or solicitation would be unlawful.

The Placing Shares have not been and will not be registered under the US Securities Act of 1933, and may not be offered or sold within the United States except in accordance with Regulation S of the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act.

Sierra Rutile Limited

Successful placing of $20.0 million in new equity

London, UK, 14 April 2016: Sierra Rutile Limited (AIM: SRX) ("Sierra Rutile" or the "Company") is pleased to announce that it has successfully raised $20.0 million (£14.0 million)1 by way of a placing of 70,052,539 new Ordinary Shares with both new and existing institutional investors (the "Placing"). The Placing was oversubscribed. The net proceeds of the Placing will be used to provide additional working capital and financial flexibility, to enable the Company to continue to implement its strategy of increasing production through expansion of its dry mining operations in a way that aligns production with anticipated customer demand.

Highlights

· Placing of 70,052,539 new Ordinary Shares (the "Placing Shares") at a price of 20.0 pence per share (the "Placing Price") raising gross proceeds of $20.0 million.

· The Placing Shares represent 11.8 per cent. of the enlarged issued share capital of the Company following admission of the Placing Shares to trading on AIM ("Admission").

· The Placing Price of 20.0 pence represents a discount of 10.1 per cent. to the closing mid-market 5 day VWAP, a discount of 6.0 per cent. to the closing mid-market 10 day VWAP and a discount of 5.4 per cent. to the closing mid-market 20 day VWAP.

· The net proceeds of the Placing will be used to provide additional working capital and financial flexibility to enable the Company to continue to implement its strategy of increasing production through expansion of its dry mining operations in a way that aligns production with anticipated customer demand.

· Pala Minerals Limited ("Pala") who currently hold 56.36% of the Company's issued share capital have committed to subscribe for 23,750,000 Placing Shares in the Placing.

· The Company has also granted an option to the Bookrunners to issue up to an additional 3,502,627 new ordinary shares at the Placing Price (being equal to up to 5% of the Placing Shares and therefore raising up to an additional $1.0 million, if exercised) on the same terms and conditions as the Placing in order to satisfy additional demand in the event that requests to participate in the Placing from institutional and certain other investors are received following this announcement (the "Bookrunner Option").

· Investec Bank plc ("Investec"), Numis Securities Limited ("Numis") and RBC Europe Limited ("RBC") are acting as Joint Bookrunners (together the "Bookrunners") in relation to the Placing and Investec is Nominated Adviser.

John Sisay, CEO of the Company, said: "We are pleased with the strong investor support for our oversubscribed share placing, which strengthens our balance sheet as we look to continue to implement our strategy of increasing our production profile through the expansion of our dry mining operations in a way that aligns production with anticipated customer demand for our product. We would like to thank our existing cornerstone shareholders for their continued support, as well as welcome new institutional shareholders onto the register at what is an exciting time for the company. We believe that we are well positioned to execute on our market led strategy and feel confident that the market dynamics for Rutile bode well for pricing towards the end of this year and beyond."

1Exchange rate of 1.4275 USD:GBP at close 12 April 2016

For Further Information:

About Sierra Rutile Limited

Sierra Rutile is a leading, multi-mine mineral sands company, operating world-class assets and developing a portfolio of growth projects in the south west of Sierra Leone, with its primary commodity mined being natural rutile, a titanium feedstock. The Company has an established operating history spanning approximately 50 years and a resource mine life of another 50 years with one of largest natural rutile deposits in the world and a JORC-Compliant Mineral Resource for measured, indicated and inferred resources for the Sierra Rutile mine of over 866 million tonnes (as at 30 September 2015). Sierra Rutile expects to be the world's largest primary producer of natural rutile in 2016.

www.sierra-rutile.com

Placing to raise $20.0 million

Background to and reasons for the Placing

As highlighted in the results announcement on 31 March 2016, Sierra Rutile achieved a major milestone in 2015 achieving record annual production of 126,021 tonnes of rutile, an increase of 10% over the prior year, and increased EBITDA by 9% to $16.1m (2014: $14.8m).

The Directors believe that demand from the Company's existing customer base continues to remain firm and, as a result, the Company will focus on a market-led business model where production is aligned to customer demand. The Company expects rutile production for 2016 to be between 120,000 and 135,000 tonnes with production cash cost2 of between $540/t and $590/t as the Gangama dry mine project ramps up following commissioning in June 2016.

The anticipated completion of the first stage of the Gangama dry mine in Q2 2016, followed by potential 250tph bolt-on expansions to Gangama and the Lanti dry mines in due course, are expected to give the Company the added flexibility to respond to increased customer demand in a capital efficient and flexible manner.

It is expected that the proceeds of the Placing of approximately $18.8 million net of expenses (assuming no exercise of the Bookrunner Option), will be used to provide additional working capital and financial flexibility to enable the Company to continue to implement its strategy of increasing production through expansion of its dry mining operations, in a way that aligns production with anticipated customer demand.

The Company has a $20 million Working Capital Facility and a $15 million Standby Facility with Nedbank Limited, both of which are for a term until 30 May 2017. The Working Capital Facility was fully drawn as at 31 December 2015, whilst the Standby Facility remained undrawn at the year end. The Company also has a drawn balance of $9 million as at 31 December 2015 under its Senior Loan Facility with Nedbank which is designated for the construction of the Gangama dry mine. In addition, the Company has a $22m million loan from the Government of Sierra Leone. The first repayment under the Senior Loan Facility and the next repayment for the loan from the Government of Sierra Leone are due in Q4 2016.

Following the Placing, the Company will explore refinancing its existing banking facilities with a view to putting in place longer term and more flexible banking arrangements which are better suited to the development profile of the Company's business. In the absence of renewing or refinancing its existing debt facilities, the Company would need to seek alternative funding arrangements in order to fund further expansion projects.

2Production Cash Cost calculated as total direct costs of sales less depreciation, amortisation, inventory write-offs, freight costs and change in value of finished goods inventory divided by tonnes of rutile produced. 

Q1 2016 Operational Update

In conjunction with the Placing, Sierra Rutile is pleased to provide an operational update on the first quarter of 2016 ("Q1 2016").

· 26,779 tonnes of rutile produced for Q1 2016

o 15% increase in rutile production from Q1 2015 (Q1 2015: 23,342 tonnes)

o Q1 seasonally lower than other quarters in keeping with prior years

· Gangama Dry Mine construction remains within budget and on-schedule

o $28 million of project expenditure incurred to 31 March 2016

o 91% of construction complete

o Expected commissioning of Gangama in June 2016

· In excess of 90% of 2016 maximum targeted volumes remain committed

· Reaffirms full-year guidance released with audited preliminary results on 31 March 2016

o Rutile production of between 120,000 and 135,000 tonnes

§ Higher weighting in H2 2016 with the commissioning of Gangama

o Production cash cost of between $540/t and $590/t

Related Party Transaction

Pala Minerals Limited ("Pala") who currently hold 56.36% of the Company's issued share capital have committed to subscribe for 23,750,000 Shares in the Placing (the "Subscription"). Given the current shareholding of Pala, the Subscription will, for the purposes of AIM Rule 13, constitute a "Related Party Transaction". The Company's directors (excluding Pala's Board representatives, Stephen Gill and Philip Day) consider, having consulted with its Nominated Adviser, Investec, that the terms of the Subscription are fair and reasonable insofar as its shareholders are concerned.

Details of the Placing Agreement

The Company and the Bookrunners have entered into a placing agreement (the "Placing Agreement") pursuant to which the Bookrunners have agreed, in accordance with its terms, to use their reasonable endeavours to procure subscribers on behalf of the Company for the Placing Shares at the Placing Price.

The Placing Agreement contains customary warranties given by the Company to the Bookrunners as to matters relating to the Company and its business and a customary indemnity given by the Company to the Bookrunners in respect of liabilities arising out of or in connection with the Placing. The Bookrunners are entitled to terminate the Placing Agreement in certain circumstances prior to admission of the Placing Shares, including circumstances where any of the warranties are found not to be true or accurate or were misleading and upon the occurrence of certain other events.

The Placing is conditional, inter alia, on:

· the relevant customary conditions in the Placing Agreement being satisfied or (if applicable) waived and the Placing Agreement not having been terminated in accordance with its terms prior to Admission; and

· Admission becoming effective by no later than 8.00 a.m. on 19 April 2016 (or such later time and/or as the Bookrunners and the Company may agree, being not later than 8.30 a.m. on 28 April 2016).

The Company has also granted the Bookrunner Option to the Bookrunners under the Placing Agreement in order to enable the Bookrunners to place up to an additional 3,502,627 Ordinary Shares, equivalent to up to 5% of the Placing Shares, in the event that further requests to participate in the Placing from institutional and certain other investors are received.

The Bookrunner Option is exercisable at the discretion of the Bookrunners on one or more occasions at any time prior to 4.30 p.m. on 15 April 2016. Any Ordinary Shares issued pursuant to the exercise of the Bookrunner Option will be issued at the Placing Price and on the terms and conditions set out in the Appendix to this announcement, which are substantially the same terms and conditions as those applicable to the issue of the Placing Shares. The Bookrunner Option may be exercised by the Bookrunners at their discretion, with the agreement of the Company, but there is no obligation on the Bookrunners to exercise the Bookrunner Option or to seek to procure subscribers for Ordinary Shares pursuant to the Bookrunner Option. The net proceeds received by the Company pursuant to the exercise of the Bookrunner Option (if any), being a maximum of $1.0 million gross, will be used for general corporate purposes.

The maximum number of new Ordinary Shares that may be issued pursuant to the exercise of the Bookrunner Option is 3,502,627, and therefore the maximum number of Ordinary Shares (including Ordinary Shares issued pursuant to exercise of the Bookrunner Option) that may be issued pursuant to the Placing is 73,555,166.

The Placing Shares will represent, in aggregate, approximately 11.8 per cent. of the enlarged issued share capital of the Company following the Placing. The Placing Shares together with Ordinary Shares issued upon exercise of the Bookrunner Option (assuming that the Bookrunner Option is exercised in full) would represent, in aggregate, approximately 12.3 per cent. of the enlarged issued share capital of the Company following the Placing and the exercise in full of the Bookrunner Option. The Placing Shares and all Ordinary Shares issued upon exercise of the Bookrunner Option will be issued credited as fully paid and will, upon issue, rank pari passu in all respects with the Ordinary Shares then in issue, including all rights to receive all dividends and other distributions declared, made or paid following Admission of such Ordinary Shares. Neither the Placing Shares nor the Ordinary Shares that may be issued under the Bookrunner Option are being made available to the public or being offered or sold in any jurisdiction where it would be unlawful to do so. The Placing is not underwritten by the Bookrunners or any other person.

Application will be made to the London Stock Exchange for Admission of the Placing Shares, and it is expected that dealings in the Placing Shares will commence on AIM at 8.00 a.m. on 19 April 2016.

If the Bookrunner Option is exercised, application will be made to the London Stock Exchange for Admission of the Ordinary Shares to be issued upon exercise of the Bookrunner Option and it is expected that dealings in such Ordinary Shares would commence on AIM at 8.00 a.m. on 19 April 2016.

Expected Timetable of Principal Events

THE APPENDIX

TERMS AND CONDITIONS OF SUBSCRIPTIONS FOR ORDINARY SHARESUNDER THE BOOKRUNNER OPTION

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING PARTICIPATION IN THE PLACING UPON EXERCISE OF THE BOOKRUNNER OPTION

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY. THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMENDED FROM TIME TO TIME, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"); AND (B) IN THE UNITED KINGDOM, PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); OR (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER (ALL SUCH PERSONS REFERRED TO IN (A) AND (B) TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A SUBSCRIPTION FOR THE PLACING SHARES.

This Appendix should be read in conjunction with the definitions set out at the end of it.

This announcement does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any decision in respect of the Company or other evaluation of any securities of the Company or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities. No prospectus or admission document will be made available in connection with the matters contained in this announcement.

Investec and RBC, both of whom are authorised by the PRA and regulated in the United Kingdom by the FCA and the PRA, together with Numis, who is authorised and regulated in the United Kingdom by the FCA, are acting for the Company and for no-one else in relation to the Placing (including in relation to the Bookrunner Option), and will not be responsible to any person other than the Company for providing the protections afforded to their clients nor for providing advice in connection with the matters contained in this announcement. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by any of the Bookrunners, or by any their affiliates or agents, as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to, any interested party or its advisers, and any liability therefore, or in connection therewith, is expressly disclaimed.

Placees will be deemed to have read and understood this announcement in its entirety and to agree to subscribe for Placing Shares on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings, contained in this Appendix. In particular each such Placee represents, warrants and acknowledges that:

(a) it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

(b) it is acquiring the Placing Shares for its own account or for an account with respect to which it exercises sole investment discretion, and that the Placing Shares have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act") and may not be offered or sold within the United States except in accordance with Regulation S of the Securities Act ("Regulation S") or pursuant to an exemption from the registration requirements of the Securities Act, and that it has not offered or sold, and will not offer and sell any Placing Shares within the United States except in accordance with Regulation S; and

(c) if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that any Placing Shares acquired by it in the Placing will not be acquired on a non‐discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the EEA which has implemented the Prospectus Directive to Qualified Investors, or in circumstances in which the prior consent of RBC has been given to each such proposed offer or resale.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this announcement. Any representation to the contrary is unlawful.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the announcement of which it forms part should seek appropriate advice before taking any action.

No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that the earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company. The price of Ordinary Shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the Placing Shares.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

Forward-Looking Statements

Certain statements included in this announcement contain forward-looking information concerning the Company's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the sectors or markets in which the Company operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within the Company's control or can be predicted by the Company. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements. Nothing in this announcement should be construed as a profit forecast and no part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in the Company, and must not be relied upon in any way in connection with any investment decision. Any forward-looking statements made herein by or on behalf of the Company speak only as of the date they are made. Except as required by the FCA, AIM Rules or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Details of the Placing

Each of the Bookrunners has entered into an agreement with the Company (the "Placing Agreement") under which, subject to the conditions set out therein, each of the Bookrunners (as joint bookrunners and agents for the Company) agreed to use its respective reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price pursuant to the Bookbuild process, as further described in this announcement and as set out in the Placing Agreement. No element of the Placing is underwritten by any of the Bookrunners or any other person.

Under the terms of the Placing Agreement, the Company has granted to the Bookrunners an option (the "Bookrunner Option") to place up to 3,502,627 additional Ordinary Shares (representing up to 5% of the Placing Shares placed in the Bookbuild) at the Placing Price at any time prior to 4.30 p.m om 15 April 2016.

Exercise of the Bookrunner Option must be with the agreement of the Bookrunners and the Company and the Bookrunner Option may only be exercised once. The Bookrunner Option is exercisable at any time prior to 4.30 p.m. on 15 April 2016. There is no obligation on the Bookrunners to exercise the Bookrunner Option or to seek to procure subscribers for Ordinary Shares pursuant to the Bookrunner Option. The maximum number of Ordinary Shares that may be issued pursuant to the exercise of the Bookrunner Option is 3,502,627. The net proceeds received by the Company pursuant to the exercise of the Bookrunner Option (if any) will be used for general corporate purposes. Any Ordinary Shares issued pursuant to the exercise of the Bookrunner Option will be issued on the same terms and conditions as those Placing Shares issued under the Bookbuild.

A Relevant Person who wishes to participate in the Placing pursuant to the Bookrunner Option should contact its usual sales contact at RBC, Investec or Numis. Allocations will be confirmed by a conditional contract note subject to these terms and conditions.

The Placing Shares issued upon exercise of the Bookrunner Option will, when issued, be subject to the articles of association of the Company, be credited as fully paid and will rank pari passu in all respects with the Ordinary Shares of no par value each in the capital of the Company ("Ordinary Shares") then in issue including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of Admission.

In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or others) on whose behalf a commitment to subscribe for Placing Shares has been given pursuant to the exercise of the Bookrunner Option.

Application for Admission

Application will be made to the London Stock Exchange for admission to trading on AIM of the Placing Shares to be issued following exercise of the Bookrunner Option. It is expected that Admission will become effective at 8.00 a.m. on or around 19 April 2016 and that dealings in such Placing Shares will commence at that time (or such later date as may be agreed between the Company and the Bookrunners, being no later than 8.30 a.m. on 28 April 2016).

Participation in, and principal terms of, the Placing under the Bookrunner Option

1. RBC, Investec and Numis (the "Bookrunners") are acting as joint bookrunners and agents of the Company in respect of the Placing of the Placing Shares in the Bookbuild and pursuant to the Bookrunner Option.

2. The exercise of the Bookrunner Option and allocation of Placing Shares to be issued upon exercise of the Bookrunner Option will be determined by the Bookrunners in their absolute discretion but subject to the agreement of the Company.

3. Each prospective Placee's Placing Participation upon exercise of the Bookrunner Option will be determined by the Bookrunners and the Company in their absolute discretion and confirmed orally and/or via written correspondence by the Bookrunners as agents of the Company. That oral and/or written confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) to subscribe for the number of Placing Shares allocated to it at the Placing Price and subject to the terms and conditions set out in this Appendix and in accordance with the Company's articles of association.

4. The Company and the Bookrunners reserve the right to scale back the number of Placing Shares to be subscribed by any Placee in the event of an oversubscription. The Bookrunners also reserve the right not to accept offers for Placing Shares or to accept such offers in part rather than in whole.

5. Each Placee also has an immediate, separate, irrevocable and binding obligation, owed to the Bookrunners as agents of the Company, to pay in cleared funds immediately on the settlement date in accordance with the Registration and Settlement requirements set out below, an amount equal to the product of the Placing Price and the number of Placing Shares that such Placee has agreed to acquire in connection with the Placing, conditional upon Admission of such Placing Shares becoming effective.

6. Any subscription for Ordinary Shares upon exercise of the Bookrunner Option will be made on the terms and subject to the conditions in this Appendix and will be legally binding on the Placee on behalf of which it is made and except with each of the Bookrunners' consent will not be capable of variation or revocation after the time at which it is submitted.

7. Irrespective of the time at which a Placee's Placing Participation is confirmed, settlement for all Placing Shares to be acquired pursuant to the exercise of the Bookrunner Option will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

8. Each Placee will be deemed to have read and understood this Appendix in its entirety, to be participating in the Placing upon the terms and conditions contained in this Appendix, and to be providing the representations, warranties, agreements, acknowledgements and undertakings, in each case as contained in this Appendix.

9. Completion of the Placing will be subject to the fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing Agreement". In the event that the Placing Agreement does not become unconditional in all respects or is terminated, the Placing will not proceed and all funds delivered by you to the Bookrunners in respect of your Placing Participation will be returned to you at your risk without interest.

10. By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

11. To the fullest extent permissible by law, neither (i) the Bookrunners, (ii) any of their directors, officers, employees or consultants, nor (iii) to the extent not contained in (i) or (ii), any person connected with the Bookrunners as defined in the FCA Rules ((i), (ii) and (iii) being together "affiliates" and individually an "affiliate"), shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither the Bookrunners nor any of their affiliates shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of the Bookrunners' exercise or non-exercise of the Bookrunner Option or of such alternative method of effecting the Placing as the Bookrunners and the Company may agree. Nothing in this Appendix or the announcement shall limit the liability of the Bookrunners or any of their affiliates for fraudulent misrepresentation.

Conditions of the issue of Ordinary Shares upon exercise of the Bookrunner Option

The issue of Ordinary Shares upon exercise of the Bookrunner Option is conditional on, inter alia:

(a) the Company issuing, conditional upon Admission, the Placing Shares to be issued upon exercise of the Bookrunner Option in accordance with the Placing Agreement; and

(b) Admission taking place not later than 8.00 a.m. (London time) on 19 April 2016 or such later date as the Company and the Bookrunners may otherwise agree (not being later than 8.30 a.m. on 28 April 2016).

If (i) any of the conditions contained in the Placing Agreement have not been fulfilled or (where permitted under law) waived by the Bookrunners by the respective time or date where specified (or such later time or date as the Company and the Bookrunners may agree), (ii) any of such conditions becomes incapable of being satisfied, or (iii) the Placing Agreement is terminated, the Placing will lapse and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by it in respect thereof.

The Bookrunners may, in their absolute discretion and upon such terms as they think fit, waive fulfilment, in whole or in part, of compliance by the Company with certain of the conditions in the Placing Agreement (to the extent permitted by law or regulations). Any such waiver will not affect Placees' commitments as set out in this announcement.

None of the Bookrunners, the Company or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Bookrunners and the Company.

Termination of the Placing

The Bookrunners are entitled, at any time before Admission, to terminate the Placing Agreement by giving notice to the Company if, inter alia:

(a) any of the warranties given by the Company in the Placing Agreement is untrue, inaccurate or misleading to an extent material in the context of the Placing; or

(b) the Company fails, to an extent material in the context of the Placing, to comply with any of its obligations under the Placing Agreement; or

(c) it comes to the notice of the Bookrunners that any statement contained in this announcement (or the 2015 preliminary results presentation published by the Company on 31 March 2016) has become untrue, incorrect or misleading in any respect which the Bookrunners consider to be material in the context of the Placing or that any matter which the Bookrunners consider to be material in the context of the Placing has arisen which would, if the Placing were made at that time, constitute a material omission therefrom; or

(d) any Material Adverse Change has occurred since the date of the Placing Agreement; or

(e) any material adverse change in financial markets; (ii) any outbreak or escalation of hostilities or other crisis affecting Sierra Leone or the UK; (iii) any suspension or termination of trading in the Ordinary Shares or AIM generally; (iv) any actual or perspective change in the tax regime which would materially affect the Group; or (v) a banking moratorium in the UK or internationally.

Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions.

By participating in the Placing, Placees agree that the exercise by the Bookrunners of any right of termination or by the Bookrunners of any other discretion under the Placing Agreement shall be within the absolute discretion of the Bookrunners, as the case may be, and that the Bookrunners need not make any reference to Placees and that the Bookrunners shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No Prospectus and Limitation of Liability

The Placing Shares will not be offered in such a way as to require a prospectus to be published in the UK. No offering document or prospectus has been or will be submitted to be approved by the FCA in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this announcement (including this Appendix) (the "Information"), and their own assessment of the Company, the Placing Shares and the Placing based on information previously published by the Company by notification to a Regulatory Information Service, and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.

No representation or warranty, express or implied, is or will be made by the Bookrunners in relation to, and no representation or liability is or will be accepted by any of the Bookrunners, or by any of their affiliates or agent, as to or in relation to, the accuracy or completeness of any such information.

Each Placee, by accepting a participation in the Placing, agrees that the Information is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company, the Bookrunners or any other person and neither the Company, the Bookrunners nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. No warranty or representation, express or implied, is given by the Company, the Bookrunners or any other person in respect of any such information. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and Settlement

Settlement of transactions in the Placing Shares following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. The Company reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in book-entry form if, in the Bookrunners' reasonable opinion, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Each Placee allocated Placing Shares upon exercise of the Bookrunner Option will be sent a contract note stating the number of Placing Shares to be allocated to it. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or book-entry settlement instructions that it has in place with Numis. Where there are no such arrangements with Numis, Placees will be provided with alternative settlement arrangements with an alternative Bookrunner.

The Company will deliver the Placing Shares to a CREST account operated by Numis (or other relevant Bookrunner) as agent for the Company and Numis (or other relevant Bookrunner) will enter its respective delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

It is expected that settlement will be on or around 19 April 2016, on a delivery versus payment basis.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the Bookrunners.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations and Warranties

By participating in the Placing pursuant to the Bookrunner Option each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with the Bookrunners (in their capacity as bookrunner and agent of the Company) and the Company, in each case as a fundamental term of their application for Placing Shares, the following:

1. that it has read and understood this announcement, including this Appendix, in its entirety;

2. that the exercise by the Bookrunners of any right of termination or any right of waiver exercisable by the Bookrunners contained in the Placing Agreement including, without limitation, the right to terminate the Placing Agreement, is within the absolute discretion of the Bookrunners and neither the Bookrunners nor the Company will have any liability to any Placee whatsoever in connection with any decision to exercise or not exercise any such rights;

3. that if (i) any of the conditions in the Placing Agreement are not satisfied (or, where relevant, waived), or (ii) the Placing Agreement is terminated, or (iii) the Placing Agreement does not otherwise become unconditional in all respects, the Placing will lapse and each Placees' rights and obligations hereunder shall cease and determine at such time and no claim shall be made by any Placee in respect thereof;

4. that no offering document or prospectus has been, or will be, prepared in connection with the Placing or any issue of Ordinary Shares pursuant to the Bookrunner Option and that it has not received a prospectus or other offering document in connection therewith;

5. that the Ordinary Shares are (and the Placing Shares will be) listed on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of AIM and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other AIM listed company, without undue difficulty;

6. that neither the Bookrunners, the Company nor any of their affiliates nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares, the Company or any other person other than the Information provided by the Company, nor has it requested the Bookrunners, the Company nor any of their affiliates or any person acting on behalf of any of them to provide it with any such information;

7. that (i) it is not and, if different, the beneficial owner of the Placing Shares is not and at the time the Placing Shares are acquired will not be a resident of, or within, the United States, Canada, Australia, the Republic of South Africa, the Republic of Ireland or Japan, and (ii) that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Canada, Australia, the Republic of South Africa, the Republic of Ireland or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, in or into those jurisdictions;

8. that the content of the Information and this announcement is exclusively the responsibility of the Company and that neither the Bookrunners nor their affiliates nor any person acting on its or their behalf has or shall have any liability for the Information, any information, representation or statement contained in this announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to subscribe for any Placing Shares based on any information, representation or statement contained in the Information, this announcement or otherwise;

9. that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is the Information and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by the Bookrunners or the Company and neither the Bookrunners nor the Company will be liable for any Placee's decision to accept an invitation to subscribe for any Placing Shares based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to subscribe for any Placing Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation;

10. that it is acting as principal only in respect of any subscription for Placing Shares or, if it is acting for any other person (i) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person, and (ii) it is and will remain liable to the Company and/or the Bookrunners for the performance of all its obligations as a Placee in respect of any subscription for Placing Shares (regardless of the fact that it is acting for another person);

11. that neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be issued to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services);

12. that it has complied with its obligations in connection with money laundering and terrorist financing under the Regulations and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations. If within a reasonable time after a request for verification of identity the Bookrunners have not received such satisfactory evidence, any Bookrunner may, in its absolute discretion, terminate a Placee's Placing Participation in which event all funds delivered by such Placee to the Bookrunners pursuant to this letter (if any) will be returned without interest to the account of the drawee bank or CREST account from which they were originally debited;

13. that if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, the Placing Shares purchased by it in the Placing will not be acquired on a non‐discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the EEA which has implemented the Prospectus Directive other than to Qualified Investors, or in circumstances in which the prior consent of the Bookrunners has been given to the proposed offer or resale;

14. that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA;

15. that it has not offered or sold and will not offer or sell any Placing Shares to persons in the EEA prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the EEA within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state);

16. that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

17. that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

18. that (i) it is a person falling within Article 19(5) and/or Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or is a person to whom this announcement may otherwise be lawfully communicated, and (ii) it is a Qualified Investor. For such purposes, it undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purpose of its business only;

19. that it and any person acting on its behalf is entitled to subscribe for and purchase the Placing Shares under the laws of all relevant jurisdictions which would apply to it, and that it and any person acting on its behalf is in compliance with applicable laws in the jurisdiction of its residence, the residence of the Company, or otherwise and that it has not taken any action or omitted to take any action which will or may result in the Bookrunners, the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any jurisdiction in connection with any subscription for Placing Shares;

20. that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to its Placing Participation and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this announcement) and will honour such obligations;

21. that the Placing Shares have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act") and may not be offered or sold within the United States except in accordance with Regulation S of the Securities Act ("Regulation S") or pursuant to an exemption from the registration requirements of the Securities Act;

22. that it has not offered or sold, and will not offer and sell any Placing Shares within the United States except in accordance with Regulation S;

23. that it (and any person acting on its behalf) has funds available to pay for the Placing Shares and will make or procure payment for the Placing Shares allocated to it in accordance with this announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers to the Placing or sold as the Bookrunners and the Company may in their discretion determine and without liability to such Placee;

24. that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to acquire and that the Company or the Bookrunners may call upon it to acquire a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

25. that neither the Bookrunners, nor any of their affiliates, nor any person acting on behalf of the Bookrunners, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing or any participation in the Bookrunner Option and that participation in the Placing or any participation in the Bookrunner Option is on the basis that it is not and will not be a client of the Bookrunners and that the Bookrunners have no duties or responsibilities to it for providing the protections afforded to their clients or customers or for providing advice in relation to the Placing or any participation in the Bookrunner Option nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of their rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

26. that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself, or (ii) its nominee, as the case may be. Neither the Bookrunners nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and the Bookrunners in respect of the same on the basis that the Placing Shares will be issued to the CREST stock account of the Bookrunners who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

27. that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non‐contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or the Bookrunners in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

28. that the Company and the Bookrunners and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to the Bookrunners on their own behalf and on behalf of the Company and are irrevocable;

29. that it agrees to indemnify and hold the Company and the Bookrunners and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of the Appendix shall survive after completion of the Placing and the issue of any Placing Shares pursuant to the Bookrunner Option;

30. that its commitment to acquire Placing Shares on the terms set out herein will continue notwithstanding any amendment that may in future be made to the terms of the Placing or the Bookrunner Option and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing or the Bookrunner Option;

31. that the agreement to settle a Placee's acquisition (and/or the acquisition by a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the acquisition by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes, and is based on a warranty from each Placee, that neither it, nor the person specified by it for registration as holder, of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be acquired by, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services). If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, additional stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees that it shall be responsible for such additional stamp duty or stamp duty reserve tax, and neither the Company nor the Bookrunners shall be responsible for such additional stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Bookrunners accordingly;

32. that no action has been or will be taken by any of the Company, the Bookrunners or any person acting on behalf of the Company or the Bookrunners that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required; and

33. that it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and are able to sustain a complete loss in connection with the Placing or participation in the Bookrunner Option. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

Each Placee and any person acting on behalf of each Placee acknowledges and agrees that the Bookrunners or any of their affiliates may, at the absolute discretion of the Bookrunners and the Company, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with the Bookrunners, any money held in an account with any of the Bookrunners on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules. As a consequence, this money will not be segregated from the Bookrunners' money in accordance with the client money rules and will be used by the Bookrunners in the course of their own business and the Placee will rank only as a general creditor of the Bookrunners.

All times and dates in this announcement may be subject to amendment. The Bookrunners shall notify the Placees and any person acting on behalf of the Placees of any changes.

The rights and remedies of the Bookrunners and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

Definitions

The following definitions apply throughout this announcement:

All references in this document to "£", "pence" or "p" are to the lawful currency of the United Kingdom, all references to "US$" or "$" are to the lawful currency of the United States. All references to times are to British Summer Time.