Shearwater Regulatory News (SWG)

16 Feb 2006 07:02

Aurum Mining PLC16 February 2006 For immediate release 16 February 2006 AURUM MINING PLC ("Aurum" or "the Company") Issue of Secured Convertible Loan Notes Aurum Mining plc (AIM: AUR), the company formed to acquire gold and othermineral extraction projects in the Former Soviet Union (FSU), today announcesthe issue of £1,000,000 secured convertible loan notes ("Loan Notes") togetherwith warrants to subscribe for up to 1,000,000 Ordinary Shares in the Company.This issue will provide the Company with the necessary working capital tocontinue to develop its Andash gold and copper project in the Kyrgyz Republic(the "Andash Project"). Loan Notes with a value of £1,000,000 were issued for cash at par (being £1 perLoan Note) on 15 February 2006 (the "Commencement Date"). The Loan Notes, whichare transferable (in whole or in part), may be redeemed (in whole or in part) atpar at any time after the first anniversary of the Commencement Date and priorto the third anniversary of the Commencement Date (the "Repayment Date"). The Loan Notes are secured on the Group's interest in the Andash Project. Interest is payable on the Loan Notes, at the interest rate from theCommencement Date to the earlier of the date of redemption or the date ofconversion. Interest is charged at 11 per cent until the first anniversary ofthe Commencement Date and thereafter at 10 per cent. Interest accrues from dayto day on the aggregate principal amount of the Loan Notes outstanding at thattime and all interest accruing after the Commencement Date is payable to theLoan Noteholders with effect from the first anniversary of the Commencement Dateby quarterly payments in arrears until conversion or, if earlier, when the LoanNotes are repaid. If at any time prior to the Repayment Date the Company completes a raising offurther funds by way of an issue of new Ordinary Shares or by way of convertibledebt ("Fundraising") at less than 35p per share (or, where such Fundraising isstructured by way of convertible debt, where conversion rights may be exercisedat less than 35p per share), Loan Noteholders shall have the right to redeemtheir Loan Notes (in whole or in part) at par, together with interest accrued upto and including the date of redemption. The Loan Notes are convertible at the lesser of 35p per Ordinary Share and theprice at which any Fundraising takes place (or where such Fundraising isstructured by way of convertible debt, the price per share at which such debtmay be converted). The Ordinary Shares to be so issued will rank pari passu inall respects with the existing Ordinary Shares in issue. Each Loan Noteholder will receive one warrant entitling him to subscribe for 1Ordinary Share (each a "Warrant") for each £1 of Loan Notes subscribed for. TheWarrants, which are transferable (in whole or in part) are exercisable at 45pper share at any time prior to 15 February 2016. The Ordinary Shares to be soissued will rank pari passu in all respects with the existing Ordinary Shares inissue. Amongst the subscribers for the Loan Notes are the following related parties:Mark Jones, director (£100,000), Sean Finlay, director (£20,000) and DavidBryans, consultant and substantial shareholder (£150,000). Pursuant to Rule 13 of the AIM Rules, the issue of the Loan Notes to suchparties constitutes a related party transaction. The Board of the Company(excluding the aforementioned Directors), having consulted with W.H. IrelandLimited, the Company's Nominated Adviser, considers that the terms of the LoanNote issue and the participation of the related parties are fair and reasonableinsofar as the Company's shareholders are concerned. Following the issue of the Loan Notes, there would be the following changes inthe interests of the Directors and substantial shareholder of the Company,should the Loan Notes be converted in full to Ordinary Shares: Number of Percentage of Number of Percentage of Number of Percentage Ordinary Shares Ordinary Shares Ordinary Shares Ordinary Ordinary of Ordinary at present at present assuming full Shares Shares Shares conversion under assuming full assuming full assuming the Loan Notes conversion conversion full under the under the conversion Loan Notes Loan Notes under the and exercise Loan Notes of all and exercise Warrants of all WarrantsSean Finlay 250,000 2.6 307,143 2.5 327,143 2.4Mark Jones - - 285,714 2.3 385,714 2.9David Bryans 2,370,000 24.9 2,798,571 22.6 2,948,571 22.1 Mark Jones, Aurum Mining's Chief Executive, stated: "I am delighted by thesupport we have received in this financing round which gives us the funding werequire to continue to progress our Andash gold and copper project in the KyrgyzRepublic. In the near term, the funding will allow us to continue work at AndashZone 1 to support our first mining licence application, which we expect tosubmit to the Kyrgyz authorities later this year." Enquiries: Aurum Mining plc 0207 478 9050Mark Jones, Chief Executive W.H. Ireland 0121 616 2101Tim Cofman Buchanan Communications 0207 466 5000Mark Court Notes to editors Aurum Mining joined the AIM market of the London Stock Exchange in May 2004 withthe strategy of seeking, evaluating and acquiring gold and other mineralextraction projects in the Former Soviet Union (FSU). In January 2005 theCompany completed its first acquisition, giving the Company an explorationlicence over the Andash gold and copper project in the Kyrgyz Republic. In itsState Register, the State Commission of Resources of the Kyrgyz Republic hasincluded 21.7 million tonnes of C1 and C2 reserves for the project, amounting togold and gold equivalent of more than 1.5 million ozs. This information is provided by RNS The company news service from the London Stock Exchange