29 May 2009 09:05
Trans-Siberian Gold plc
Asacha project funding update
LONDON: 29 May 2009 - Trans-Siberian Gold plc ("TSG" or "the Company") (TSG.L) reported on 7 May 2009 that it required additional funding of US$25 million to bring the Asacha mine into production. It also reported that the Company's major shareholder UFG Asset Management had agreed in principle to contribute part of this funding requirement, provided that the Company secured the balance from other sources, and to consider the provision of bridge finance while negotiations continued with other potential sources of funding.
UFG has now agreed to provide the Company with bridge finance of up to US$3 million on commercial terms. 50% of the loan is repayable on the earlier of the first anniversary of the commencement of gold production at Asacha and 30 September 2011, the balance on the earlier of the second anniversary of first gold production and 30 September 2012.
If the Company raises equity during the term of the loan, UFG may convert any part of the outstanding loan into TSG shares at the same time and price per share as that equity raising. UFG also has an option, subject to the requisite approval of TSG's shareholders, to convert any part of the outstanding loan into TSG shares at a price equivalent to the volume weighted average price of TSG's shares for the period of 60 business days prior to notice of such conversion.
Since the UFG loan is a related party transaction the Company's Board (except for Florian Fenner, Dmitry Khilov and Charles Ryan who are connected to UFG) consider, having consulted with TSG's Nominated Adviser Seymour Pierce Limited, that the terms of the UFG loan are fair and reasonable insofar as the shareholders of TSG are concerned. On the basis of this advice the Board has approved the UFG loan.
The Company has also agreed, subject to obtaining the necessary shareholder approvals, to issue warrants to subscribe for additional TSG shares to UFG on terms to be agreed and considered as fair and reasonable by the Company's Board (excluding those directors connected to UFG) after consultation with TSG's Nominated Adviser.
A further announcement in respect of the continuing negotiations with other potential sources of finance will be made in due course.
Ends
Contacts:
TSG
Simon Olsen +44 (0) 1480 811871
Seymour Pierce
John Depasquale +44 (0) 20 7107 8000