24 Jul 2013 12:41
NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US NEWS WIRE SERVICES.
24 July 2013
AIM: STEL
Stellar Diamonds plc
("Stellar" or the "Company")
PLACING OF SHARES
Stellar Diamonds plc, the London quoted (AIM: STEL) diamond mining and exploration company focused on West Africa, announces that the Company is raising £618,230 (gross) through a placing of 61,823,036 ordinary shares (the "Placing Shares") with its Directors and other third party investors at a price of 1.00p per share. The Placing Shares, which are being issued on a non-pre-emptive basis pursuant to the Company's existing shareholder authorities will, when issued, represent approximately 15.5% of the enlarged share capital of the Company.
Karl Smithson, Chief Executive of Stellar, commented:
"The strong support shown by the Board through this placement is testimony to the value presented by Stellar at this juncture. The funds will be primarily applied to short term working capital obligations of the Company and the on-going project costs at Tongo. The next step at Tongo will be commencement of a feasibility study on the 1 million carat Dyke-1 resource where the recent economic scoping study defined an NPV of $53 million using a 10% discount rate."
Use of proceeds
The funds placed will primarily be used to fund the Company's near term working capital needs, the initial funds required as the Company commences a feasibility study on the Tongo project, to support on-going project care and maintenance at Droujba and Mandala and the on-going costs around the dispute with the Ministry of Mines in Sierra Leone over the Kono licences issue. Further funding will be required to fully implement the Company's strategy of taking Tongo through feasibility to reach a production decision and although the Company is currently in discussion with potential investors or joint venture partners in this regard, there can be no certainty that these discussions will be successfully concluded. The Company continues to rationalise and vigorously control costs, whilst simultaneously seeking to enhance the value of its key projects.
The Placing
The Placing will raise a total of £618,230 through the issue of 61,823,036 Placing Shares at the placing price of 1.00p per share. The net proceeds receivable by the Company taking into account the shares taken in lieu of fees and expenses by Directors and certain members of the senior management is £551,876. In addition, subject to shareholder approval at the Company's next general meeting, a full warrant to purchase one new ordinary share at a price of 2.00p per share for a period of 12 months from grant will be granted in relation to each Placing Share issued. The Placing Shares are being issued on a non-pre-emptive basis pursuant to the Company's existing shareholder authority.
The Placing Shares will be issued credited as fully paid and will rank pari passu in all respects with the existing ordinary shares, including the right to receive all dividends and other distributions declared on or after the date on which they are issued. Application will be made for admission to AIM of the Placing Shares ("Admission") which is expected to occur, and trading to commence, on or around 8.00 am on 30 July 2013.
Directors' participation
The Directors will invest the amounts reflected in the table below. However, in order to preserve cash and further align the Directors' interests with those of Stellar shareholders, the Directors are participating in the Placing at the Placing Price through conversion of accrued fees and expenses of £50,354 (included in the table). Certain members of the Company's senior management have also participated in the Placing by the conversion of £16,000 in salary to shares (not included in the table).
Name of Director | Amount subscribed (£) | Number of Placing Shares at 1.00 pence | Number of shares held including the Placing Shares
| Percentage of enlarged issued share capital
|
Peter Daresbury | 19,556(a) | 1,955,555 | 7,869,379 | 1.98 |
Karl Smithson | 19,500(b) | 1,950,000 | 5,661,284 | 1.42 |
James Campbell | 8,000(c) | 800,000 | 2,011,796 | 0.51 |
Luis da Silva | 6,091(d) | 609,060 | 1,442,155 | 0.36 |
Steven Poulton | 18,208(e) | 1,820,840 | 4,364,456 | 1.10 |
Dr. Markus Elsässer | 8,000(f) | 800,000 | 44,938,053 | 11.28 |
* Mr Elsässer's interest is held both directly and indirectly through Nassim Funds
(a) £9,556 represents directors' fees and expenses plus £10,000 being subscribed for cash
(b) £19,500 represents conversion of salary to shares
(c) £8,000 represents directors' fees
(d) £2,091 represents directors' fees plus £4,000 being subscribed for cash
(e) £3,208 represents directors' fees plus £15,000 being subscribed for cash
(f) £8,000 represents directors' fees
The issue of Placing Shares and the conditional grant of warrants to the Directors is deemed a related party transaction under the AIM Rules for Companies ("the AIM Rules"). There are no independent directors for the purposes of providing the statement required under Rule 13 of the AIM Rules. Charles Stanley, the Company's Nominated Adviser, considers that the terms of the issue of Placing Shares and the warrants to the Directors are fair and reasonable insofar as the shareholders of the Company are concerned. As noted above, the issue of the warrants is subject to shareholder approval at the Company's next general meeting.
Total voting rights
Following Admission, the Company's total issued share capital will comprise of 398,296,076 Ordinary Shares. The Company does not hold any ordinary shares in treasury. Therefore the total number of shares with voting rights in the Company will be 398,296,076. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company following Admission.
About Stellar Diamonds plc
Stellar is a London (AIM: STEL) listed West African focussed diamond mining and exploration company which is advancing the 1 million carat Tongo Dyke-1 resource into feasibility studies and towards production. In addition, the Company holds the Droujba project which has a defined 3 million carat resource. Stellar remains in dispute with the Ministry of Mines in Sierra Leone regarding its two Kono licences and is seeking to settle the issue amicably and through diplomatic channels, and will pursue legal remedies if required to ensure the proper reinstatement of these licences.
For further information contact the following or visit the Company's website at www.stellar-diamonds.com.
Stellar Diamonds plc
Karl Smithson, Chief Executive Tel: +44 (0) 20 7010 7686
Charles Stanley Securities
(Nominated Advisor and Joint Broker)
Mark Taylor, Marc Milmo, Carl Holmes Tel: +44 (0) 20 7149 6000
Daniel Stewart & Company plc
(Joint-Broker)
Martin Lampshire, Antony Legge Tel: +44 (0) 20 7776 6550