20 Jul 2015 09:19
Tri-Star Resources plc ("Tri-Star" or the "Company")
Antimony Roaster Financing by way of Placing, Subscription and issue of Loan Notes to raise £3.5 million and Notice of General Meeting
20 July 2015
Tri-Star announces that the Company has conditionally raised £1.5 million (before expenses) through the placing of 1,278,000,000 new ordinary shares of 0.005 pence each in the Company ("Ordinary Shares") (the "Placing Shares") (the "Placing") and, by way of a subscription with the Company (the "Subscription"), the issue of 222,000,000 subscription shares (the "Subscription Shares") at a price of 0.10p per share (the "Issue Price").
In addition to the Placing and the Subscription, the Company has conditionally agreed with Odey European Inc. ("OEI") the issue of a further £2 million secured convertible bonds due in 2018 (the "Loan Notes") to OEI.
The Placing, Subscription and issue of the Loan Notes (together, the "Fundraising") are conditional on the passing of the Resolutions at the General Meeting to be held at the offices of Fladgate LLP at 16 Great Queen Street, London WC2B 5DG on 5 August 2015.
A circular detailing the Placing, Subscription, issue of Loan Notes and Notice of General Meeting ("Circular") will be posted to shareholders today and will be available from the Company's website www.tri-starresources.com shortly.
Emin Eyi, Managing Director, commented: "I am delighted to be able to announce this important fundraising by Tri-Star which will enable the Company to finance its 40% equity share in the Oman Antimony Roaster joint venture as part of the total US$70 million funding package which the joint venture has arranged. The significant technical and economic potential of the Antimony Roaster has been confirmed by recent third party engineering reports, which have also confirmed the enormous potential for the technology as applied to the roasting of refractory gold ores.
The Company will continue to work with its joint venture partners to bring this exciting project through construction and into production to become one of the first sizeable Western World antimony roasters designed to be fully compliant with modern environmental legislation."
Fundraising and use of proceeds
Oman Antimony Roaster Project
Strategic & Precious Metals Processing LLC ("SPMP") a company registered in the Sultanate of Oman and in which Tri-Star owns 40%, is proceeding to design and construct an antimony roaster and a value-added downstream antimony trioxide manufacturing facility in the Sultanate of Oman, processing its own and third party concentrates (the Oman Antimony Roaster, or "OAR").
The OAR will have the capability to treat up to 40,000 tonnes per annum of antimony concentrates and direct shipping ores to produce up to 20,000 tonnes per annum of both antimony ingots and powdered antimony at high purity for sale to end users.
Total funding for the OAR is expected to amount to US$70 million, comprising US$15 million equity to be provided by the joint venture partners (of which the Company's proportion is US$6 million); US$40 million to be provided as a senior debt facility and a US$15 million mezzanine loan facility from the other joint venture partners (as announced on 17 July 2015).
Intellectual property rights
As announced on 5 June 2015, Tri-Star agreed the conditional sale of certain intellectual property rights ("IPR") to SPMP, effected by way of an assignment of IPR which covers all Tri-Star's developed and proprietary intellectual property rights relating to clean antimony concentrate roasting and the related clean roasting of refractory gold.
The transaction is conditional on SPMP achieving financial close of the OAR ("Financial Close") which will be achieved by the entry by SPMP into a definitive facility agreement with respect to the debt financing of the project and other closing funding conditions as set out in the SPMP shareholders' agreement.
The consideration for the sale of IPR is up to US$6 million in cash payable by SPMP, of which US$2 million is payable on Financial Close; US$2 million is payable on the receipt of certain third party reports to be delivered to SPMP relating to the commercial and technical viability of the technology as it relates to refractory gold processing and which, as announced on 17 July 2015, as the reports have now been delivered is now also anticipated to be available to offset the Company's equity commitment to OAR; and US$2 million is payable on the commissioning of an antimony roasting pilot plant planned to be part of the overall OAR.
The net cash receipts of the sale of IPR will amount to up to US$3.6 million (approximately £2.35 million) being the maximum sales receipts of US$6 million less Tri-Star's associated 40% equity funding commitment to SPMP. These funds will be applied to finance Tri-Star's equity commitment to the OAR and for general corporate purposes.
Revision of Loan Notes terms with Odey European Inc. ("OEI")
On 10 June 2015, Tri-Star conditionally agreed with OEI a number of important revisions to the loan note instrument governing the terms of the Loan Notes of total initial nominal value of £6.0 million issued to OEI in two tranches in June 2013 and August 2014.
The principal revised terms were:
· Conversion price to be fixed at £0.0020 (0.2 pence) per Ordinary Share for the remainder of the term of the Loan Notes (until June 2018); and
· That on maturity in June 2018, if a conversion notice has not been served previously, the Loan Notes will convert into Ordinary Shares at £0.0020 (0.2 pence) per Ordinary Share, removing the existing option for OEI to otherwise have the loan notes redeemed in cash in full.
The rate of interest accruing on the Loan Notes will remain unchanged (being a non-cash coupon of 15% per annum, calculated on a daily basis, and compounding half yearly). In addition, OEI will retain the option to serve a conversion notice at any time in the period to maturity of the Loan Notes in June 2018. Also, and as is presently the case, if the conversion of Loan Notes would result in OEI holding more than 29.9% of the Company's enlarged voting share capital, OEI will have the choice of either continuing to hold those Loan Notes the conversion of which would increase its holding of shares above 29.9% or to have those Loan Notes redeemed in cash.
The changes to the loan note instrument detailed above are conditional on Financial Close.
Additional Loan Notes
As at 30 June 2015, the outstanding principal and accrued interest of the Loan Notes stood at £7.5 million.
On 20 July 2015, the Company conditionally agreed with OEI the issue of a further £2 million Loan Notes to OEI in addition to the £6 million initial nominal value of Loan Notes presently in issue. This further issue of Loan Notes is conditional on the Placing and the Subscription becoming unconditional.
All of the Loan Notes fall within the principal revised terms as detailed above, implementation of which is conditional on Financial Close.
Use of proceeds
In order to achieve Financial Close, the Company is required to demonstrate to the other shareholders of SPMP and SPMP's third party debt providers that Tri-Star has access to committed funds to satisfy in full its equity contribution to SPMP.
The proceeds of the Fundraising together with the net proceeds from the sale of IPR will be used to fulfil the Company's obligations on Financial Close as well as for other general corporate purposes.
The Fundraising
The Company has conditionally placed 1,278,000,000 Placing Shares and 222,000,000 Subscription Shares at 0.10 pence per Ordinary Share with certain existing and new institutional and other investors to raise £1.5 million before expenses.
In addition, on 20 July 2015, the Company conditionally agreed with OEI the issue of a further £2 million Loan Notes to OEI in addition to the £6 million initial nominal value of Loan Notes issued to OEI in two tranches in June 2013 and August 2014.
The Fundraising is not being underwritten and is conditional, amongst other things, on the following:
(A) the passing of the Resolutions;
(B) the Placing Agreement not being terminated prior to Admission and being otherwise unconditional in all respects; and
(C) Admission becoming effective on or before 8.00 a.m. on 6 August 2015 (or such later date and/or time as the Company, SP Angel may agree, being no later than 8.00 a.m. on 20 August 2015).
Certain Directors have also agreed to subscribe for New Ordinary Shares pursuant to the Placing or the Subscription. The number of New Ordinary Shares to be subscribed by each Director and their resulting shareholdings following Admission are as follows:
Director | Number of Existing Ordinary Shares | Percentage of Existing Ordinary Shares | Number of New Ordinary Shares subscribed for | Number of Ordinary Shares following Admission | Percentage of Ordinary Shares following Admission |
Mark Wellesley-Wood | 2,000,000 | 0.03 | 5,000,000 | 7,000,000 | 0.08 |
Emin Eyi | 1,560,000,000 | 22.44 | 15,000,000 | 1,575,000,000 | 18.64 |
Guy Eastaugh | 6,695,243 | 0.10 | - | 6,695,243 | 0.08 |
Ken Hight | 21,663,774 | 0.31 | - | 21,663,774 | 0.26 |
Adrian Collins | 23,245,800 | 0.33 | 5,000,000 | 28,245,800 | 0.33 |
Jonathan Quirk | 3,500,000 | 0.05 | 10,000,000 | 13,500,000 | 0.16 |
Total | 1,617,104,817 | 23.26 | 35,000,000 | 1,652,104,817 | 19.55 |
The New Ordinary Shares being issued pursuant to the Placing and the Subscription will represent 17.74% of the Company's enlarged issued share capital following Admission.
Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that such Admission will become effective and that dealings will commence at 8.00 a.m. on 6 August 2015.
Following Admission, the Company will have 8,451,244,676 Ordinary Shares in issue.
General Meeting
A notice of General Meeting is set out at the end of the Circular convening the GM to be held at the offices of Fladgate LLP at 16 Great Queen Street, London WC2B 5DG at 11.00 a.m. on 5 August 2015.
The Resolutions to be proposed at the GM are as follows:
· Resolution 1 is an ordinary resolution to authorise the Directors to allot equity securities in connection with the Fundraising with an aggregate nominal value up to £151,100; and
· Resolution 2 is a special resolution to dis-apply statutory pre-emption rights to authorise the Directors to allot equity securities in connection with the Fundraising for cash with an aggregate nominal value up to £151,100.
Recommendation
The Directors believe that the Fundraising is in the interests of the Company and Shareholders as a whole and accordingly recommend that Shareholders vote in favour of the Resolutions, as they intend to do so in respect of their aggregate holding of 1,617,104,817 Existing Ordinary Shares, representing approximately 23.26 per cent. of the issued ordinary share capital of the Company.
All defined terms used in this announcement are defined in the Circular.
Enquiries:
Tri-Star Resources plc Emin Eyi, Managing Director Guy Eastaugh, Chief Financial Officer | Tel: +44 (0) 20 3470 0470 |
SP Angel Corporate Finance (Nomad and Broker) Robert Wooldridge / Katy Birkin | Tel: +44 (0) 20 3470 0470 |
FORWARD LOOKING INFORMATION
This press release may contain "forward-looking information", as defined under applicable Canadian securities laws. Forward-looking information typically contains statements that relate to future, not past, events and often contains words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions. There can be no assurance that the forward-looking information contained in this report will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information.
All statements, other than statements of historical fact, included in this press release including, without limitation, relating to the OAR (as defined), the Company's intentions with respect to a gold roasting facility and plans for its mineral properties, constitute forward-looking information. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect, including, but not limited to, assumptions in connection with the ability to deliver any of the outcomes referred to in respect of the OAR, the ability to complete construction of the OAR, the availability of financing for the cost of the OAR on acceptable terms, or likewise any facility that might process refractory gold, and general economic and market conditions. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others, risks associated with changes in laws applicable to the OAR, the ability to raise finance on acceptable terms for any of the projects or facilities mentioned, the volatility of commodity and raw material prices, currency exchange rates and interest rates, global economic conditions and the additional risks identified in this press release or other reports and filings with applicable securities regulators. Forward-looking information in this press release is based on the Directors' beliefs, estimates and opinions on the date of this press release and the Company does not undertake to update publicly or revise the forward-looking information contained in this press release, except as required by applicable securities laws.
Any financial outlook or future-oriented financial information in this press release, as defined by applicable Canadian securities laws, has been approved by the Directors as of the date of this press release. Such financial outlook or future oriented financial information is provided for the purpose of providing information about the Company's current expectations and plans relating to the future. Readers are cautioned that such outlook or information should not be used for purposes other than for which it is disclosed in this press release.