Fundraising of £1.5 million

Praetorian Resources Limited (PRAE LN)

£1.5 million investment into Praetorian and issue of zero dividend preference shares.

Praetorian Resources Limited ('Praetorian') announces that it has entered into a funding agreement (the 'Agreement') with Damille Investments II Limited ('Damille') to raise £1,500,000. The Agreement has been entered into through a newly incorporated wholly owned subsidiary of Praetorian, Praetorian ZDP Limited ('Praetorian ZDP'). Praetorian ZDP is a special purpose vehicle incorporated for the sole purpose of entering into the Agreement.

Under the Agreement, Praetorian ZDP issued 1,500,000 unlisted, zero dividend preference shares (the 'Shares') to Damille for a consideration of £1,500,000 (the 'Subscription Price'). The Shares carry an annually compounded coupon of 11% and have a maximum three year term from the date of signing the Agreement. Praetorian has agreed to pay Damille a facility fee of 2% of the Subscription Price which is due within 14 days of signing the Agreement. Praetorian ZDP has the right to redeem the Shares prior to the end of the three year term by giving Damille no less than 30 days written notice; by repaying the accrued capital entitlement per ZDP Share ("Capital") plus the accrued compounded coupon to that redemption date and by paying a redemption fee equating to 5% of the sum of the Capital and accrued compounded coupon at the date of redemption.

Praetorian has undertaken to maintain a net asset value coverage of 4.5 times the Subscription Price plus the compounded coupon due for the full three year term (the 'Cover Test'). If the Cover Test is not satisfied as at the date of two consecutive quarterly net asset value publications, Praetorian will place into escrow 50% of any asset realisations until such time that the Cover Test is once again satisfied, at which point all escrowed funds will be returned to Praetorian.

As part of the Agreement, Praetorian issued 7,263,922 unlisted warrants to Damille with an exercise price of £0.2065 per warrant (to subscribe for ordinary shares in Praetorian on a 1:1 basis). The warrants are exercisable immediately and for a period of three years from the date of the Agreement. In addition, Damille has the right to appoint one director to the board of both Praetorian and Praetorian ZDP so long as they continue to hold 75% of the Shares (excluding any ZDP Shares redeemed by the Company).

The newly invested funds will be loaned by Praetorian ZDP to Praetorian for working capital and investment purposes. The Praetorian board continues to maintain its prudent central cost base and the Praetorian directors and board advisors will continue to defer or maintain their substantially reduced fees until further notice.

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Registered Office: 11 New Street, St Peter Port, Guernsey, GY1 2PF