Source - RNS
RNS Number : 5767M
Aureus Mining Inc.
14 October 2016
 

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR RELEASE OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

 

 

Aureus Mining Inc.

 

TSX: AUE

AIM: AUE

 

 

US$72 million equity fundraise to finance the transition to an owner-operator mining model and strengthen the balance sheet

 

Aureus Mining Inc. (TSX: AUE / AIM: AUE) ("Aureus" or the "Company") is pleased to announce that it has conditionally raised approximately US$72 million via an equity fundraising to finance the Company's transition to an owner-operator mining model, repay amounts due to Nedbank Limited and FirstRand Bank Limited (the "Lenders"), and to strengthen its balance sheet.

 

Highlights:

Financing

·      Approximately US$60 million to be raised from MNG Gold Jersey Limited ("MNG Gold") through a direct subscription with the Company at a price of 1.5p per share (the "Subscription")

·      Approximately US$12 million to be raised from institutional investors (the "Principal Placing") at a price of 1.5p per share (the "Placing Price")

·      The net proceeds of the Subscription and Principal Placing (together the "Fundraise") will be used as follows:

to effect the Company's transition to an owner-operator mining model through the proposed acquisition by Bea Mountain Mining Corporation ("BMMC") of mining equipment and inventory from Atmaca Services (Liberia) Inc. ("ASLI") and the termination of the mining services contract, as set out in the Company's announcement of 6 September 2016 (the "Acquisition"). Management estimate that the transition to an owner-operator mining model could result in cost savings for BMMC of approximately US$1.5 - 2.0 million per month;

to pay historic MonuRent (Liberia) Limited ("MonuRent") invoices assigned to ASLI;

to make principal and interest repayments due to the Lenders;

to fund improvements to the processing plant and tailings storage facility ("TSF");

for regional exploration of existing licenses; and

for general working capital requirements.

·      The Company has granted an option to Numis Securities Limited ("Numis") in order to enable Numis to increase the size of the Placing by up to 540,000,000 Shares amounting to gross proceeds of approximately US$10 million (the "Broker Option"). The Broker Option is available to all existing shareholders (other than MNG Gold and placees under the Principal Placing) and Aureus employees and provides the opportunity for them to participate in the Placing at the Placing Price

·      As announced yesterday, the Company has received an extension until 14 December 2016 of the default waiver and standstill agreement from its Lenders, announced on 15 June 2016

·      MNG Gold, the Company's majority shareholder, is in discussions with the Lenders with regards to potentially providing a corporate guarantee in exchange for the re-sculpting of debt repayments and the relaxation of loan covenants.  Should these negotiations not result in an amendment to the terms of the Company's project finance facilities then, notwithstanding the Fundraise, the Company may be in breach of certain covenants once covenant testing recommences

 

Operational updates

·      Performance at the Company's New Liberty Gold Mine continues to improve with 6,021 ounces of gold produced in September 2016

·      Under its rescheduled production profile ("Updated Profile"), the Company is targeting production of approximately 100,000 ounces of gold in 2017 with life-of-mine cash costs of US$743 per ounce and all-in-sustaining costs of US$845 per ounce

·      The Directors believe the Updated Profile has scope for further optimisation and that there is the potential to review the pit shell and contained gold ounces once lower operating costs have been demonstrated

·      The Company has made progress in addressing the issues that have led to the historical failure to deliver the Company's mine plan. These include improving the detoxification circuit, increasing the number of experienced operators on site, establishing more efficient procurement processes and plans to redesign the TSF

 

Overview of the Fundraise

The Company has conditionally raised approximately US$72 million through the issue of 3,900,000,000 new common shares of the Company ("Shares") at the Placing Price, to be comprised of 3,250,000,000 Shares issued to MNG Gold at the Placing Price pursuant to the Subscription and 650,000,000 Shares issued to institutional investors at the Placing Price pursuant to the Principal Placing. Following the Fundraise the Company will have 5,104,039,001 Shares in issue. Under the terms of the Broker Option, the Company may also issue up to a further 540,000,000 Shares.

 

The Placing and the Subscription are conditional, inter alia, upon minority shareholder approval being obtained for the Subscription (which is proposed to be sought on or around 29th November 2016 at a special meeting of shareholders (the "Special Meeting")) and the approval of the Toronto Stock Exchange ("TSX"). For the purposes of the TSX approval, the Company intends to rely on the exemption set forth in Section 602.1 of the TSX Company Manual, which provides that the TSX will not apply its standards to certain transactions involving eligible interlisted issuers listed on a recognized exchange, such as AIM.  The Placing is also conditional on minority shareholder approval being obtained for the Acquisition (as described below) and the Acquisition and the Subscription becoming unconditional.  On or around 4th November 2016, a circular containing the notice of the Special Meeting will be sent to shareholders on the register on 27 October 2016 (the "Record Date").

 

Subject to, inter alia, minority shareholder approval being obtained for the Acquisition and the Subscription, it is expected that dealings in the shares to be issued pursuant to the fundraising will commence at 8.00 a.m. (London time) on 6 December 2016 and that the Acquisition will complete shortly after Admission.

 

At the Special Meeting, the Company will also be seeking the authority of the shareholders to change the name of the Company to Avesoro Resources Inc.  If shareholders vote to approve the change of name, the Company also intends to change its TIDM code to ASO on both AIM and the TSX, effective on or around the date of Admission of the Shares to AIM and TSX.

 

Following completion of the Fundraise, and assuming no shares are issued pursuant to the Broker Option, MNG Gold will hold 3,912,222,429 Shares in the Company representing 76.6% of the Company's share capital as enlarged by the Fundraise.  If the Broker Option is exercised in full, MNG Gold will continue to hold the same number of Shares in the Company, then representing 69.3% of the Company's share capital as enlarged by the Fundraise and the shares issued following exercise of the Broker Option.

 

In addition, further to its initial investment in the Company in July 2014, the International Finance Corporation ("IFC"), the private sector arm of the World Bank Group, which currently has a shareholding in the Company of approximately 1.7% has the right, but not the obligation, to maintain its pro rata shareholding in any equity financing undertaken by the Company, including the Fundraise.

 

Serhan Umurhan, Chief Executive Officer of Aureus, said:

 

"The fund raise provides the key to unlock the significant value from Aureus's high grade assets.  We have been very encouraged by the significant support from a broad range of investors, as well as by the significant progress MNG Gold has made in turning around the New Liberty mine since taking control only as recently as 15th July this year.  MNG Gold remains firmly committed to continuing the transformation of these assets into a long term, sustainable business to the benefit of all stakeholders, and to establishing Avesoro Resources Inc. as a platform for further growth."

 

Background and operational update

Following the restart of processing operations at New Liberty in late June 2016, the Company experienced periods of unscheduled plant downtime which disrupted gold production in Q3 2016.  Average plant utilisation has been approximately 73% since the recommencement of operations.  The Company poured and shipped approximately 14,000 ounces of gold in the third quarter of 2016.

 

Plant modifications and optimisation activities continue to progress. The detoxification circuit is now recycling process plant effluent to reduce discharge from the TSF and operating costs.  Changes to the operation and design of the TSF from an overflow to a closed system with controlled discharge has ensured that all recent discharges from the TSF have been within permitted levels in accordance with the International Cyanide Management Code.  The Company also plans to redesign the TSF during the dry season so as to establish a longer-term solution.

 

The Company has made progress in addressing a number of the issues that have contributed to the historical failures to deliver the Company's mine plan on schedule:

 

·      Detoxification circuit now recycling process plant effluent to reduce discharges from the TSF and operating costs;

·      Existing Aureus operating team supplemented with MNG Gold expertise at the Company's processing plant;

·      Utilising MNG Gold's existing procurement capability in Liberia and internationally to reduce reliance on outsourced procurement; and

·      Entered into a contract with an established explosives supplier in Liberia, reducing costs to US$1,350 per tonne from recent costs of up to US$2,200 per tonne whilst importing from overseas.

 

Under its Updated Profile, the Company is targeting production of approximately 100,000 ounces of gold in 2017 with life-of-mine cash costs of US$743 per ounce and all-in-sustaining costs of US$845 per ounce.

 

The Directors believe the Updated Profile has scope for further optimisation and that there is the potential to review the pit shell and contained gold ounces once lower operating costs have been demonstrated.

 

Transition to owner-operator mining model

As set out in the Company's announcement of 6 September 2016, the mining services contract at New Liberty (the "Contract"), which had previously been held by MonuRent, was novated to ASLI (a Liberian company that is wholly owned by MNG Gold). As part of the transaction ASLI acquired the heavy mining equipment ("Mining Equipment") and inventory on-site at New Liberty from MonuRent and the MonuRent employees were transferred to ASLI.

 

As soon as reasonably practicable following completion of the Fundraise, the Company will, through its wholly owned subsidiary BMMC, complete the Acquisition by:

 

·      Acquiring the Mining Equipment for a cash consideration of US$15.4 million from ASLI at no gain or loss;

·      Acquiring the inventory on-site (currently estimated at US$7.1 million) at closing from ASLI at no gain or loss (subject to post-closing adjustments following a stocktake) ("Inventory"); and

·      Paying to ASLI a fee of US$4.5 million to terminate the Contract, being the same amount as the novation fee paid by ASLI to MonuRent.

 

In addition, the former MonuRent employees will transfer from ASLI to BMMC on the same terms and conditions thereby achieving the transition of BMMC to owner-operator of the mining operations at the New Liberty Mine.

 

The Acquisition is conditional upon payment by BMMC of certain historic invoices acquired by ASLI from MonuRent ("Historic Invoices"), minority shareholder approval (which is proposed to be sought at the Special Meeting on or around 29th November 2016), the approval of the TSX and any other required regulatory approvals, as well as other customary terms and conditions. For the purposes of the TSX approval, the Company intends to rely on the exemption set forth in Section 602.1 of the TSX Company Manual, which provides that the TSX will not apply its standards to certain transactions involving eligible interlisted issuers listed on a recognized exchange, such as AIM. 

 

The strategic decision to move to an owner-operator mining model is a result of the previously announced on-going review of the Company's cost base.  Management estimate that the transition to an owner-operator mining model could result in cost savings of approximately US$1.5 - 2.0 million per month and significantly improve the operational and financial flexibility of the Company.  In order to make an efficient transition to owner-operator mining, the Company will draw on the experience of MNG Gold, a company which successfully owns and operates mining activities at the Kokoya Gold Mine in Liberia.

 

Use of proceeds

The proceeds of the Fundraise will be used as follows:


US$ millions

Purchase of Mining Equipment from ASLI and contract termination fee

19.9

Payment of Historic Invoices assigned to ASLI

9.7

Debt principal and interest payments

17.3

Processing plant and TSF improvements

5.0

Regional exploration

5.0

General working capital (including Inventory) and transaction expenses

15.1

Total

72.0

 

Project finance facilities

As announced yesterday, the Company has received an extension until 14 December 2016 of the default waiver and standstill agreement from its Lenders, announced on 15 June 2016.

 

MNG Gold, the Company's majority shareholder, is in discussions with the Lenders with regards to potentially providing a corporate guarantee in exchange for the re-sculpting of debt repayments and the relaxation of loan covenants.  Should these negotiations not result in an amendment to the terms of the Company's project finance facilities then, notwithstanding the Fundraise, the Company may be in breach of certain covenants once covenant testing recommences.

 

Related party transactions

MNG Gold, which currently holds 55.0% of the Company's issued share capital has committed to subscribe for 3,250,000,000 Shares pursuant to the Subscription. Given the current shareholding of MNG Gold, the Subscription by MNG Gold will constitute a related party transaction under the AIM Rules. The independent directors of the Company, consisting of Mr David Netherway, Mr Jean-Guy Martin and Mr Loudon Owen consider, having consulted with the Company's Nominated Adviser, that the terms of this transaction are fair and reasonable insofar as its shareholders are concerned.

 

The acquisition of the Mining Equipment and Inventory from ASLI and the payment of the contract termination fee to ASLI for an expected aggregate cash consideration of approximately US$27.0 million (subject to a stock-take adjustment) constitute a related party transaction under the AIM Rules. The independent directors of the Company, consisting of Mr David Netherway, Mr Jean-Guy Martin and Mr Loudon Owen consider, having consulted with the Company's Nominated Adviser, that the terms of this transaction are fair and reasonable insofar as its shareholders are concerned.

 

Following the completion of the Subscription and the Principal Placing, MNG Gold will hold 3,912,222,429 Shares, representing approximately 76.6% of the then issued and outstanding Shares on a non-diluted basis.  Should the Placing not complete, MNG Gold will hold the same number of Shares, representing approximately 87.8% of the then issued and outstanding Shares on a non-diluted basis.

 

The Subscription will also constitute a related party transaction under the TSX Rules and applicable Canadian securities laws, including Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The acquisition of the Mining Equipment and Inventory from ASLI and the payment of the contract termination fee to ASLI will also represent a related party transaction under the TSX Rules and applicable Canadian securities laws, including MI 61-101, by virtue of ASLI being a wholly owned subsidiary of MNG Gold.

 

The Company will be seeking minority shareholder approval of the Subscription and the Acquisition (collectively, the "Related Party Transactions") pursuant to section 5.6 of MI 61-101, as further described below.

 

Pursuant to subsection 5.5(c) of MI 61-101, the Subscription will constitute a distribution of securities of the Company to a related party for cash consideration and neither the Company, nor to the knowledge of the Company after reasonable inquiry, MNG Gold, have knowledge of any material information concerning the Company or its securities that has not been generally disclosed. As a result, the proposed issuance of Shares to MNG Gold meets the requirements of Section 5.5(c) of MI 61-101 and the Company is exempted from having to obtain a formal valuation in connection with the Subscription.

Pursuant to subsection 5.5(h) of MI 61-101, the Acquisition constitutes a transaction where (i) the assets being sold were acquired by a related party of the Company in a prior arm's length transaction, (ii) the prior arm's length transaction was completed not more than 12 months prior to the date of the agreement to resell the assets, and (iii) a qualified, independent valuator has provided an opinion that the value of the consideration paid by the Company for the assets is not more than consideration paid by the related party in the prior arm's length transaction. As a result, the transaction meets the requirements of Section 5.5(h) of MI 61-101 and the Company is exempted from having to obtain a formal valuation of the subject matter of the transaction.

Neither the Company nor any of its officers or directors, after reasonable inquiry, are aware of any prior valuations or bona fide offers that have been completed or received by the Company in the past 24 months in respect of the Company that relate to the subject matter of or are otherwise relevant to the Related Party Transactions.

The Related Party Transactions are also subject to the receipt of TSX approval. However, the Company qualifies as an "eligible interlisted issuer" as defined under the TSX Company Manual and, accordingly, is permitted to avail itself on the exemption under Section 602.1 of the TSX Company Manual which exempts an "eligible interlisted issuer" listed on a recognized exchange, such as AIM, from the application of the requirements contained in Section 501 of the TSX Company in respect of a transaction involving insiders or other related parties.

Agency agreement

The Company and Numis have entered into an agency agreement (the "Agency Agreement") pursuant to which Numis has agreed, in accordance with the terms of the Agency Agreement, to use its reasonable endeavours to procure subscribers on behalf of the Company for 650,000,000 Shares at the Placing Price.

 

The Agency Agreement contains customary warranties given by the Company to Numis as to matters relating to the Company and its business and a customary indemnity given by the Company to Numis in respect of liabilities arising out of or in connection with the Placing. Numis is entitled to terminate the Agency Agreement in certain circumstances prior to Admission, including circumstances where any of the warranties are found not to be true or accurate or were misleading and upon the occurrence of certain other events.

 

The Placing is conditional, inter alia, on:

·      the relevant customary conditions in the Agency Agreement being satisfied or (if applicable) waived and the Agency Agreement not having been terminated in accordance with its terms prior to Admission;

·      minority shareholder approval being obtained for the Related Party Transactions on the terms described above and the Subscription and the Acquisition becoming unconditional; and

·      Admission becoming effective by no later than 8.00 a.m. on 6 December 2016 (or such later time and/or as Numis and the Company may agree, being not later than 8.00 a.m. on 6 February 2017).

 

The Company has also granted the Broker Option to Numis under the Agency Agreement in order to enable Numis to place up to an additional 540,000,000 Shares at the Placing Price, in the event that further requests to participate in the Placing from existing shareholders (other than MNG Gold and placees under the Principal Placing) and Aureus employees are received.

 

The Broker Option is exercisable at the discretion of Numis on one or more occasions at any time prior to 4.30 p.m. London time on 28 October 2016. Any Shares issued pursuant to the exercise of the Broker Option will be issued at the Placing Price and on the terms and conditions set out in the Appendix to this announcement. The Broker Option may be exercised by Numis at their discretion, with the agreement of the Company, but there is no obligation on Numis to exercise the Broker Option or to seek to procure subscribers for Shares pursuant to the Broker Option. The net proceeds received by the Company pursuant to the exercise of the Broker Option (if any), being a maximum of approximately US$10.0 million gross, will be used for general corporate purposes.

 

The maximum number of new Shares that may be issued pursuant to the exercise of the Broker Option is 540,000,000, and therefore the maximum number of Shares (including Shares issued pursuant to exercise of the Broker Option) that may be issued pursuant to the Fundraise is 4,440,000,000.

 

The Shares issued pursuant to the Placing will represent, in aggregate, approximately 12.7 per cent. of the enlarged issued share capital of the Company following the Fundraise. The Shares issued pursuant to the Principal Placing together with Shares issued upon exercise of the Broker Option (assuming that the Broker Option is exercised in full) would represent, in aggregate, approximately 21.1 per cent. of the enlarged issued share capital of the Company following the Principal Placing, the Subscription and the exercise in full of the Broker Option. The Shares issued pursuant to the Fundraise and all Shares issued upon exercise of the Broker Option will be issued fully paid and will, upon issue, rank pari passu in all respects with the Ordinary Shares then in issue, including all rights to receive all dividends and other distributions declared, made or paid following Admission of such Shares. Neither the Shares issued pursuant to the Principal Placing nor the Shares that may be issued under the Broker Option are being made available to the public or being offered or sold in any jurisdiction where it would be unlawful to do so. The Placing is not underwritten by Numis.

 

Application will be made to the London Stock Exchange and the TSX for Admission of the Shares to be issued pursuant to the Fundraise (and if relevant on exercise of the Broker Option), and it is expected that dealings will commence at 8.00 a.m. (London time) on 6 December 2016.

 

MNG Gold Subscription agreement

 

MNG Gold has agreed to subscribe for 3,250,000,000 shares for an aggregate subscription amount of approximately US$60 million in a direct subscription with the Company at the Placing Price. The Subscription by MNG Gold is also subject to customary conditions, including the approval of the TSX, and the approval of Shareholders at the Special Meeting as detailed elsewhere in this Announcement.

 

If the Placing does occur, MNG will take up and acquire 3,250,000,000 shares following which, MNG Gold will hold 3,912,222,429 Shares in the Company representing 76.6% of the Company's share capital. In the event that the Placing does not occur MNG Gold will hold the same number of Shares in the Company representing 87.8% of the Company's share capital as then enlarged.

 

Acquisition agreement

 

BMMC and ASLI have entered into an asset purchase agreement (the "Acquisition Agreement") pursuant to which BMMC has agreed, in accordance with the terms of the Acquisition Agreement, to:

·      Acquire the Mining Equipment from ASLI for a cash consideration of US$15.4 million;

·      Pay to ASLI a fee of US$4.5 million to terminate the Contract; and

·      Acquire the inventory on-site at closing from ASLI (subject to post-closing adjustments following a stocktake) at the unit prices agreed by ASLI with MonuRent and applied to the inventory valuation for that transaction (currently estimated at approximately US$7.1 million).

In addition, the former MonuRent employees will transfer from ASLI to BMMC on the same terms and conditions and the mining services agreement between ASLI and BMMC shall terminate with effect from the closing date.

 

The Acquisition Agreement is conditional upon, inter alia, Aureus obtaining minority shareholder approval for the transaction, completion of the Subscription, BMMC receiving consent to the transaction from the Lenders and BMMC having paid the Historic Invoices.

 

Where applicable, the Acquisition Agreement is substantially similar to the agreement between MonuRent and ASLI including, inter alia, warranties given by ASLI in favour of BMMC and closing deliverables from both parties.

 

Arbitration update

 

As previously announced, the Company received a request for arbitration from International Construction & Engineering (Seychelles) ("ICE") in November 2015 with respect to ICE's contract to carry out civil and earth works at Aureus' New Liberty Gold Mine. ICE's contract was terminated in August 2014, the Company having taken the appropriate legal advice, when the works were approximately 60-70% completed. The remaining earthworks were completed by directly engaged labour and contractors supervised by the project's EPCM contractor.

 

The Company strongly believes that the request is without merit and opportunistic. An arbitration ruling is expected by the end of the year, and the Company is confident that no material amounts will be found payable.

 

Change of name

 

The Company announces today that it intends to change its name to Avesoro Resources Inc.  The authority to change the name will be sought from the shareholders at the Special Meeting described below.  Assuming that it is approved by shareholders, the change of name will take effect shortly thereafter.

 

Change of TIDM

 

The Company announces today that it intends to change its TIDM to ASO on both AIM and TSX, conditional on the change of name being approved by shareholders at the Special Meeting described below.  Assuming that the change of name is approved by shareholders, the change of TIDM is expected to take effect on or around the date of Admission of the Shares to AIM and TSX.

 

Special Meeting of Shareholders

 

The Company has announced the Special Meeting will be held on or around 29 November 2016 to approve, among other things, the Related Party Transactions. The record date for the Special Meeting will be the close of business on 27 October 2016.

 

At the Special Meeting, the resolution approving the Related Party Transactions must be approved by a majority of the votes cast by the shareholders of the Corporation, other than (i) MNG and (ii) any of its respective related parties, associates or affiliates, and any joint actors of the foregoing (which, collectively, currently own approximately 662,232,429 Shares of the Company, representing approximately 55.0% of the Company's issued share capital), present in person or by proxy at the Special Meeting.

 

The independent directors of the Company's Board of Directors have unanimously approved the Related Party Transactions and recommend that shareholders of the Company vote in favour of these transactions.

 

Details of the items of business to be conducted at the Special Meeting, including all information required by MI 61-101, will be contained in a management information circular, which will be mailed to shareholders, and available on the Company's profile on SEDAR at www.sedar.com, on or about 4 November 2016.

 

Estimated timetable of key events

 

Transaction Announcement:

14 October 2016

Record Date for Special Meeting:

27 October 2016

Special Meeting Circular posted:

4 November 2016

Special Meeting:

29 November 2016

Admission of new shares to AIM and TSX:

6 December 2016

 

Unless otherwise stated, all references in this announcement to dates and time are to London time.

 

An exchange rate of US$1.23 : £1.00 has been used in this announcement.

 

 

Contact information

Aureus Mining Inc.

Geoff Eyre

Tel: +44(0) 20 7010 7690

 

Buchanan

Bobby Morse / Anna Michniewicz

Tel: +44(0) 20 7466 5000

Numis Securities Limited

(Aureus Nominated Adviser and Broker)

John Prior / James Black / Paul Gillam

Tel: +44(0) 20 7260 1000

 


 

About Aureus Mining

The Company's assets include the New Liberty Gold Mine in Liberia (the "New Liberty Gold Mine, "New Liberty" or the "mine") which has an estimated proven and probable mineral reserve of 8.5 Mt with 924,000 ounces of gold grading 3.4 g/t and an estimated measured and indicated mineral resource of 9,796 Kt with 1,143,000 ounces of gold grading 3.63 g/t and an estimated inferred mineral resource of 5,730 Kt with 593,000 ounces of gold grading 3.2 g/t.  A Definitive Feasibility Study has been completed, the first gold pour has taken place and commercial production has been declared.  The foregoing mineral reserve and mineral resource estimates and additional information in connection therewith are set out in the Company's technical report dated March 25, 2015 and entitled "New Liberty Gold Project, Bea Mountain Mining Licence Southern Block, Liberia, West Africa, Definitive Project Plan".

 

The New Liberty Gold Mine is located within the Southern Block of the 100% owned Bea Mountain mining licence.  This licence covers 478 km² and has a 25 year, renewable, mineral development agreement.  The Bea Mountain mining license also hosts additional gold projects of Ndablama, Gondoja, Weaju and Leopard Rock which are the focus of exploration programs during 2016. Ndablama has an indicated mineral resource of 386,000 ounces of gold grading 1.6 g/t and inferred mineral resource of 515,000 ounces of gold grading 1.7 g/t and Weaju has an inferred mineral resource of 178,000 ounces of gold grading 2.1 g/t.  The Yambesei (759 km2), Archaen West (112.6 km2), Mabong (36.6 km2) and Mafa West (15.6 km2) licences will also be subject to preliminary reconnaissance geological work.  The foregoing mineral resource estimates and additional information in connection therewith are set out in the Company's technical report dated December 1, 2014 and entitled "Ndablama and Weaju Gold Projects, Bea Mountain Mining Licence, Northern Block, Technical Report on Mineral Resources".

 

The Company also has a gold exploration permit in Cameroon.

 

Qualified Persons

The Company's Qualified Person is Mark J. Pryor, who holds a BSc (Hons) in Geology & Mineralogy from Aberdeen University, United Kingdom and is a Fellow of the Geological Society of London, a Fellow of the Society of Economic Geologists and a registered Professional Natural Scientist (Pr.Sci.Nat) of the South African Council for Natural Scientific Professions.  Mark Pryor is an independent technical consultant with over 25 years of extensive global experience in exploration, mining and mine development and is a "Qualified Person" as defined in National Instrument 43 -101 "Standards of Disclosure for Mineral Projects" of the Canadian Securities Administrators and has reviewed and approves this press release.

 

Forward Looking Statements

Certain information contained in this Announcement constitutes forward looking information. This information may relate to future events or the Company's future performance. All information other than information of historical fact is forward looking information. The use of any of the words "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", "predict" and "potential" and similar expressions are intended to identify forward looking information. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking information. No assurance can be given that this information will prove to be correct and such forward looking information included in this Announcement should not be unduly relied upon. This information speaks only as of the date of this Announcement.

 

Actual results could differ materially from those anticipated in the forward looking information contained in this news release as a result of the risk factors, including: the risk that the waiver and standstill agreement will terminate; risks normally incidental to exploration and development of mineral properties; the inability to obtain required waivers and amendments from the Company's creditors in respect of its debt repayment obligations and consequential risks of default thereon; risks related to operating in West Africa; health risks associated with the mining workforce in West Africa; risks related to the Company's title to its mineral properties; adverse changes in commodity prices; risks related to current global financial conditions; the inability of the Company to obtain, maintain, renew and/or extend required licences, permits, authorizations and/or approvals from the appropriate regulatory authorities and other risks relating to the legal and regulatory frameworks in Liberia, including adverse changes in applicable laws; competitive conditions in the mineral exploration and mining industry; risks related to obtaining insurance or adequate levels of insurance for the Company's operations; risks related to environmental regulations; uncertainties in the interpretation of results from drilling; risks related to the legal systems in Liberia; risks related to the tax residency of the Company; changes in exchange and interest rates; risks related to the activities of artisanal miners; actions of third parties that the Company is reliant upon; lack of availability at a reasonable cost or at all, of plants, equipment or labour, including required equipment, explosives and other necessary material not being delivered in the expected time frame, or at all; the inability to attract and retain key management and personnel; political risks; and future unforeseen liabilities and other factors.

 

The forward looking information included in this Announcement is expressly qualified by this cautionary statement and is made as of the date of this Announcement. The Company does not undertake any obligation to publicly update or revise any forward looking information except as required by applicable securities laws.

 

This Announcement also contains references to estimates of mineral resources. The estimation of mineral resources is inherently uncertain and involves subjective judgments about many relevant factors. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The accuracy of any such estimates is a function of the quantity and quality of available data, and of the assumptions made and judgments used in engineering and geological interpretation, which may prove to be unreliable and depend, to a certain extent, upon the analysis of drilling results and statistical inferences that may ultimately prove to be inaccurate. Mineral resource estimates may have to be re-estimated based on, among other things: (i) fluctuations in commodity prices; (ii) results of drilling; (iii) results of studies; (iv) changes to proposed mining operations, including dilution; (v) the evaluation of mine plans subsequent to the date of any estimates; and (vi) the possible failure to receive required permits, approvals and licences.

 



 

APPENDIX - TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING OR SUBSCRIBE FOR SHARES PURSUANT TO THE BROKER OPTION. ALL OFFERS OF THE PLACING SHARES AND ANY BROKER OPTION SHARES WILL BE MADE PURSUANT TO AN EXEMPTION UNDER DIRECTIVE 2003/71/EC (AND AMENDMENTS THERETO), AND INCLUDING ANY RELEVANT IMPLEMENTING MEASURE, IN THE RELEVANT MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA")) (THE "PROSPECTUS DIRECTIVE"), FROM THE REQUIREMENT TO PRODUCE A PROSPECTUS FOR OFFERS OF THE PLACING SHARES AND BROKER OPTION SHARES. THIS ANNOUCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) PERSONS IN AN EEA MEMBER STATE WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE (A "RELEVANT MEMBER STATE"), UNDER THE FOLLOWING EXEMPTIONS UNDER THE PROSPECTUS DIRECTIVE, IF AND TO THE EXTENT THEY HAVE BEEN IMPLEMENTED IN THAT RELEVANT MEMBER STATE: (I) TO ANY LEGAL ENTITY WHICH IS A "QUALIFIED INVESTOR" AS DEFINED IN THE PROSPECTUS DIRECTIVE; (II) TO FEWER THAN 150 NATURAL OR LEGAL PERSONS (OTHER THAN QUALIFIED INVESTORS AS DEFINED IN THE PROSPECTUS DIRECTIVE), AS PERMITTED UNDER THE PROSPECTUS DIRECTIVE; OR (III) IN ANY OTHER CIRCUMSTANCES WHICH DO NOT REQUIRE THE PUBLICATION BY THE COMPANY OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE, PROVIDED THAT NO SUCH OFFER TO THE PUBLIC SHALL RESULT IN A REQUIREMENT FOR THE PUBLICATION BY THE COMPANY OR NUMIS OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE; AND (B) (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, (THE "ORDER"); OR (II) HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS AND OTHER PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER OR TO WHOM THEY MAY OTHERWISE LAWFULLY BE DISTRIBUTED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN, NEW ZEALAND, SOUTH AFRICA, JERSEY OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.  THIS ANNOUNCEMENT (WITHOUT THE APPENDIX) MAY BE RELEASED, PUBLISHED OR DISTRIBUTED BY THE COMPANY IN ACCORDANCE WITH ITS CONTINUOUS DISCLOSURE REQUIREMENTS UNDER APPLICABLE CANADIAN SECURITIES LAWS AND THE REQUIREMENTS OF THE TORONTO STOCK EXCHANGE ("TSX").

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO THE LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A PURCHASE OF PLACING SHARES AND/OR BROKER OPTION SHARES.

This Announcement is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire any Placing Shares or Broker Option Shares in any jurisdiction in which any such offer or solicitation would be unlawful.

All offers of the Placing Shares and any Broker Option Shares will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus. This Announcement is being distributed and communicated to persons in the UK only in circumstances to which section 21(1) of FSMA does not apply.  Offers of Placing Shares and Broker Option Shares will not be made to residents of Canada.

The Placing Shares and Broker Option Shares referred to in this Announcement have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or transferred in, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any relevant state or jurisdiction of the United States.

The distribution of this Announcement and the Placing and/or issue of the Placing Shares and any Broker Option Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, Numis or any of their respective affiliates that would permit an offer of the Placing Shares or Broker Option Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares or Broker Option Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Numis to inform themselves about and to observe any such restrictions.

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement.

Persons who are invited to and who choose to participate in the Placing will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares (or Broker Option shares, as the case may be) on the terms and conditions contained in this Appendix and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix. In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges (amongst other things), that:

1        it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares and Broker Option Shares that are allocated to it for the purposes of its business; and

2        in the case of a Relevant Person in a Relevant Member State who acquires any Placing Shares or Broker Option Shares pursuant to the Placing:

(a)      it is a Qualified Investor; and

(b)      in the case of any Placing Shares or Broker Option Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive,

(i)       the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors or in circumstances in which the prior consent of Numis has been given to the offer or resale; or

(ii)      where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; and

3        it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements and agreements contained in this Announcement; and

4        it understands (or, if acting for the account of another person, such person understands) the resale and transfer restrictions set out in this Appendix; and

5        except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any account referred to in paragraph 3 above) is outside the United States acquiring the Placing Shares in an offshore transaction as defined in and in accordance with Regulation S under the Securities Act.

No offering / no prospectus

This Announcement does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares or Broker Option Shares in any jurisdiction in which such offer or solicitation is or may be unlawful.

No prospectus or other offering document has been or will be submitted to be approved by the FCA in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this Announcement and any information publicly announced through a Regulatory Information Service (as defined in the listing rules of the FCA (the "Listing Rules")) by or on behalf of the Company on or prior to the date of this Announcement (the "Publicly Available Information") and subject to any further terms set forth in the contract note or trade confirmation sent to individual placees. Each Placee, by participating in the Placing, agrees that it has neither received nor relied on any information, representation, warranty or statement made by or on behalf of Numis or the Company other than the Publicly Available Information and none of Numis, the Company nor any person acting on such person's behalf nor any of their affiliates has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Details of the Agency Agreement, the Placing Shares and the Broker Option Shares

Numis has entered into the Agency Agreement with the Company under which it has undertaken, on the terms and subject to the conditions set out in the Agency Agreement, to use reasonable endeavours to procure Placees for the Placing Shares at a price of 1.5p per Placing Share (the "Placing Price") to raise gross proceeds of approximately US$72 million. Numis has been granted an option to increase the size of the Placing to procure Placees for such additional number of Common Shares as will raise gross proceeds of the Placing by US$10 million (the "Broker Option").

The Broker Option is exercisable on more than one occasion at any time prior to 4.30 p.m. London Time on 28 October 2016. Any Broker Option Shares issued pursuant to the exercise of the Broker Option will be issued on the same terms and conditions as the Placing Shares issued pursuant to the Placing. The Broker Option may be exercised by Numis with the agreement of the Company and there is no obligation on Numis to exercise the Broker Option or to seek to procure subscribers for Broker Option Shares or subscribe for any Broker Option Shares itself. Accordingly, any allocation of Broker Option Shares is conditional upon such exercise and is therefore not a firm allocation. The maximum number of Broker Option Shares that may be issued pursuant to the exercise of the Broker Option is 540,000,000.

The Placing is not being underwritten by Numis.

The Placing Shares and any Broker Option Shares will, when issued, be fully paid and will rank pari passu in all respects with the existing common shares in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such common shares after the date of issue of the Placing Shares or any Broker Option Shares (as the case may be).

As part of the Placing, the Company has agreed that it will not issue or sell any common shares for a period of 90 days after Admission without prior consent from Numis. This agreement is subject to certain customary exceptions and does not prevent the Company from granting options, and allotting and issuing common shares pursuant to options granted to employees in the normal course of business.

Special Meeting and Applications for admission to listing and trading on AIM and the Toronto Stock Exchange ("TSX")

A special meeting of the Company's shareholders will be held on or about 29 November 2016 to consider resolutions relating to the MNG Gold Subscription and the Acquisition (the "Resolutions").

Application will be made to the London Stock Exchange for admission to trading of the Placing Shares and any Broker Option Shares on AIM ("Admission"), following passing of the Resolutions by the requisite majority of the Company's shareholders.

It is expected that Admission will take place on or before 8.00 a.m. (London time) on 6 December 2016 and that dealings in the Placing Shares and any Broker Option Shares on AIM will commence at the same time.

The Company will apply for conditional approval of the TSX with respect to the listing of the Placing Shares and any Broker Option Shares, subject only to the satisfaction by the Company of customary post-closing conditions imposed by the TSX in similar circumstances.

Principal terms of the Placing

This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares or any Broker Option Shares.

1        Numis is acting as sole bookrunner and agent of the Company in connection with the Placing.

2        Participation in the Placing is only available to persons who may lawfully be, and are, invited by Numis to participate. Numis and its affiliates are entitled to participate as principal in the Placing.

3        The price per Placing Share (and if relevant per Broker Option Share) (the "Placing Price") is 1.5p and is payable to Numis by all Placees.

4        Each Placee's allocation is determined by Numis in its discretion following consultation with the Company and has been or will be confirmed orally by Numis and a trade confirmation will be despatched as soon as possible thereafter. Numis' oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of Numis and the Company, to acquire the number of Placing Shares (or if relevant Broker Option Shares) allocated to it and to pay the relevant Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association. Except with Numis's consent, such commitment will not be capable of variation or revocation at the time at which it is submitted.

5        An offer to acquire Placing Shares and (if relevant) Broker Option Shares, which has been communicated by a prospective Placee to Numis which has not been withdrawn or revoked prior to publication of this Announcement shall not be capable of withdrawal or revocation immediately following the publication of this Announcement without the consent of Numis.

6        Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Numis, to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares and (if relevant) Broker Option Shares such Placee has agreed to acquire and the Company has agreed to issue to that Placee.

7        Each Placee's allocation and commitment will be evidenced by a contract note or trade confirmation issued to such Placee by Numis. The terms of this Appendix will be deemed incorporated therein.

8        Except as required by law or regulation, no press release or other announcement will be made by Numis or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

9        Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are confirmed, settlement for all Placing Shares and (if relevant) Broker Option Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under 'Registration and Settlement'.

10      All obligations under the Placing will be subject to fulfilment of the conditions referred to below under 'Conditions of the Placing' and to the Placing not being terminated on the basis referred to below under 'Termination of the Placing'.

11      Each Placee's rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

12      To the fullest extent permissible by law, neither Numis nor any of its affiliates nor any of its or its affiliates' agents, directors, officers or employees shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither Numis nor any of its affiliates nor any of its or their agents, directors, officers or employees shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of the Numis' conduct of the Placing as Numis and the Company may agree.

Registration and Settlement

Placees will be sent a contract note or trade confirmation which will confirm the number of Placing Shares and any Broker Option Shares allocated to them and the aggregate amount owed by them to Numis. Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions which they have in place with Numis or otherwise as Numis may direct.

Settlement of transactions in the Placing Shares and any Broker Option Shares (ISIN: CA0515471070) following Admission will take place within the CREST system. Settlement through CREST will be on a T+2 basis unless otherwise notified by Numis and is expected to occur on 6 December 2016. Settlement will be on a delivery versus payment basis. However, in the event of any difficulties or delays in the admission of the Placing Shares and any Broker Option Shares to CREST or the use of CREST in relation to the Placing, the Company and Numis may agree that the Placing Shares and any Broker Option Shares should be issued in certificated form. Numis reserves the right to require settlement for the Placing Shares and any Broker Option Shares, and to deliver the Placing Shares and any Broker Option Shares to Placees, by such other means as it deems necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in a Placee's jurisdiction.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of 2 percentage points above prevailing LIBOR as determined by Numis.

If Placees do not comply with their obligations Numis may sell any or all of their Placing Shares and any Broker Option Shares on their behalf and retain from the proceeds, for its own account and benefit, an amount equal to the Placing Price of each share sold plus any interest due. Placees will, however, remain liable for any shortfall below the Placing Price and for any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of their Placing Shares and any Broker Option Shares on their behalf.

If Placing Shares or Broker Option Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the conditional contract note or trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares or Broker Option Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares and/or Broker Option Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Conditions of the Placing

The Placing is conditional upon the Agency Agreement becoming unconditional and not having been terminated in accordance with its terms.

The obligations of Numis under the Agency Agreement are, and the Placing is, conditional on, inter alia:

(a)      the Company having delivered to Numis a certificate certifying, inter alia, that (i) the Company has complied with all the covenants and satisfied all the terms and conditions of the Agency Agreement required to be complied with or satisfied prior to the time of closing except to the extent that the same have been waived by Numis, (ii) no transaction out of the ordinary course of business, material to the Company, taken as a whole, has been entered into by the Company or its material subsidiaries or has been approved by the management of any of them and (iii) the representations and warranties of the Company contained in the Agency Agreement, and in any certificates of the Company delivered pursuant to or in connection with the Agency Agreement, are true and correct as at the time such representations and warranties are made;

(b)      the Placing Shares and any Broker Option Shares having been conditionally approved for listing on the TSX, subject only to the Standard Listing Conditions;

(c)      the MNG Gold Subscription Agreement and the Acquisition Agreement, having been executed and delivered by the Company in form and substance satisfactory to Numis and its counsel, acting reasonably;

(d)      all conditions required to complete the MNG Gold Subscription having been satisfied or waived (and, if waived, such waiver(s) having been disclosed in writing to and approved by Numis) (save for any condition relating to the Agency Agreement becoming unconditional;

(e)      all conditions required to complete the Acquisition having been satisfied or waived (and, if waived, such waiver(s) having been disclosed in writing to and approved by Numis) (save for (i) any condition relating to the Agency Agreement becoming unconditional and (ii) the satisfaction of the Company's obligation to pay the consideration under the Acquisition Agreement);

(f)       the Company issuing and allotting the Placing Shares and (where relevant) the Broker Option Shares, subject only to Admission;

(g)      the Company having received all required shareholder and regulatory approvals (including approval of the TSX) in respect of the MNG Gold Subscription and the MNG Gold Subscription being exempt from, the valuation requirements of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and the Company complying with the minority approval requirements of MI 61-101 in respect thereof;

(h)      Admission taking place not later than 8.00 a.m. (London time) on 6 December 2016; and

(i)       the Project Finance Loan Facilities Waiver Letter being valid and enforceable in accordance with its terms and having not been terminated by the Company's lenders and the Company having provided to Numis written confirmation from the Company's lenders in form and substance satisfactory to Numis in that regard,

(all conditions to the obligations of Numis included in the Agency Agreement being together, the "conditions"). Numis and the Company may agree to extend the time and/or date by which any condition is required to be fulfilled to no later than 8.00 a.m on 6 February 2017.

If any of the conditions set out in the Agency Agreement is not fulfilled or, where permitted, waived to the extent permitted by law or regulations in accordance with the Agency Agreement within the stated time periods (or such later time and/or date as the Company and Numis may agree), or the Agency Agreement is terminated in accordance with its terms (as to which, see the "Termination of the Placing" section below), the Placing will lapse and the Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Placing" below and will not be capable of rescission or termination by it.

Numis may, at its absolute discretion and upon such terms as it thinks appropriate, waive fulfilment of all or any of the conditions in the Agency Agreement in whole or in part (to the extent permitted by law or regulation) or extend the time provided for fulfilment of any such conditions in respect of all or any part of the performance thereof. Any such extension or waiver will not affect Placees' commitments as set out in this Appendix.

Neither Numis nor any of its affiliates nor any of its or its affiliates' agents, directors, officers or employees nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Numis and the Company.

Termination of the Placing

Numis may in its absolute discretion terminate the Agency Agreement at any time up to and including Admission in certain circumstances, including (among others):

(a)      the Company shall be in a breach or default under or non-compliance with any warranty representations, term or condition of the Agency Agreement; or

(b)      any order to cease or suspend trading in any securities of the Company or prohibiting or restricting the distribution of any of the Placing Shares is made, or proceedings are announced, commenced or threatened for the making of any such order, by any securities commission or similar regulatory authority, any stock exchange or any other competent authority, and has not been rescinded, revoked or withdrawn; or

(c)      any inquiry, action, suit, investigation or other proceeding (whether formal or informal) in relation to the Company or its material subsidiaries is instituted or threatened or announced or any order is made by any governmental body having jurisdiction over the Company or its material subsidiaries (other than an inquiry, action, suit, investigation or proceeding or order based solely upon the activities or alleged activities of Numis), which has not been rescinded, revoked or withdrawn and which, in the opinion of Numis, acting reasonably, operates to prevent or materially restrict the distribution of the Placing Shares into any jurisdiction in which they have been lawfully offered or would prevent or materially restrict the distribution of the Placing Shares under the Agency Agreement or would prevent or materially restrict trading in the Placing Shares or would reasonably be expected to materially adversely affect the market price or value of the Placing Shares; or

(d)      there should occur any material change, change of a material fact, occurrence or event or any development that would reasonably be expected to result in a material change or change of a material fact (other than a change related solely to information provided by Numis) which, in the opinion of Numis, acting reasonably, has or would be expected to have a material adverse effect on or change to certain aspects of the business of the Company and its subsidiaries or material adverse effect on the market price or value of any of the Placing Shares; or

(e)      there should develop, occur or come into effect or existence any event, action, state, condition or major financial occurrence of national or international consequence or any law or regulation or any international crisis, act of terrorism or outbreak of hostilities which, in the opinion of Numis, acting reasonably, seriously adversely affects or may seriously adversely affect the financial markets in Canada, the United States or the United Kingdom or the business, operations or affairs of the Company and its subsidiaries, taken as a whole, or the market price, value of any of the Placing Shares; or

(f)       the Company is required to publish a supplementary circular.

If the Agency Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time and no claim may be made by any Placee in respect thereof.

By participating in the Placing, each Placee agrees with the Company and Numis that the exercise by the Company or Numis of any right of termination or any other right or other discretion under the Agency Agreement shall be within the absolute discretion of the Company or Numis (as the case may be) and that neither the Company nor Numis need make any reference to such Placee and that none of the Company, Numis, their respective affiliates or their or their respective affiliates' agents, directors, officers or employees, respectively, shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.

By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the "Conditions of the Placing" above and will not be capable of rescission or termination by it after oral confirmation by Numis of its allocation.

Representations, warranties and further terms

By participating in the Placing, each prospective Placee (and any person acting on such Placee's behalf) represents, warrants, acknowledges and agrees (for itself and for any such prospective Placee) that:

1        it has read and understood this Announcement in its entirety and that its acquisition of the Placing Shares (or as the case may be Broker Option Shares) is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained in this Appendix and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the Common Shares, or otherwise, other than the information contained in this Announcement and the Publicly Available Information;

2        it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document has been or will be prepared in connection with the Placing;

3        the Company's common shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules, which includes a description of the nature of the Company's business, the Company's most recent balance sheet and profit and loss account, the Company's announcements and circulars and the Company's AIM admission document and that it is able to obtain or access such information without undue difficulty and has read and understood such information;

4        neither Numis nor the Company nor any of their respective affiliates, or their or their respective affiliates' agents, directors, officers or employees, respectively, nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or Broker Option Shares or the Company or any other person other than the information in this Announcement, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and (if relevant) the Broker Option Shares; nor has it requested Numis, the Company, any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them to provide it with any such information;

5        neither Numis nor any person acting on its behalf nor any of its affiliates, or its or its affiliates, agents, directors, officers or employees, has or shall have any liability for this Announcement or any other Publicly Available Information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

6        the content of this Announcement and the Publicly Available Information has been prepared by and is exclusively the responsibility of the Company and that neither Numis nor any persons acting on its behalf are responsible for or have or shall have any liability for any information or representation, warranty or statement relating to the Company contained in this Announcement or any other Publicly Available Information, nor will they be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement, any other Publicly Available Information or otherwise. Nothing in this Appendix shall exclude any liability of any person for fraudulent misrepresentation;

7        it is not, and at the time Admission becomes effective will not be, a resident of Australia, Canada, South Africa, New Zealand, or Japan;

8        the Placing Shares and any Broker Option Shares are being offered and sold only outside the United States in "offshore transactions" as defined in, and in accordance with, Regulation S under the Securities Act. It and any account for which it is acting is outside the United States and acquiring the Placing  Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the Securities Act;

9        it (i) has such knowledge and experience in financial and business matters to be capable of evaluating the merits and the risks of an investment in the Common Shares, (ii) will not look to Numis for all or part of any such loss it may suffer, (iii) is able to bear the economic risk of an investment in the Common Shares, (iv) is able to sustain a complete loss of the investment in the Common Shares and (v) has no need for liquidity with respect to its investment in the Common Shares;

10      (i) the only information on which it is entitled to rely and on which it has relied in committing to subscribe for the Placing Shares or Broker Option Shares (as the case may be) is contained in this Announcement, the Publicly Available Information such information being all that it deems necessary to make an investment decision in respect of the Common Shares and it has made its own assessment of the Company, the Common Shares and the terms of the Placing based on Publicly Available Information, (ii) Numis and the Company (or any of their respective affiliates) have not made any representation to it, express or implied, with respect to the Company, the Placing, the Placing Shares or any Broker Option Shares or the accuracy, completeness or adequacy of the Publicly Available Information, (iii) it has conducted its own investigation of the Company, the Placing and the Common Shares, satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing and (iv) it has not relied on any investigation that Numis or any person acting on its behalf may have conducted with respect to the Company, the Placing or the Placing Shares (or the Broker Option Shares);

11      neither the Placing Shares nor the Broker Option Shares have been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares or Broker Option Shares under the securities laws of the United States, or any state or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement.  The Placing Shares and Broker Option Shares have not been registered or otherwise qualified for offer and sale nor will a prospectus be cleared or approved in respect of the Placing Shares or Broker Option Shares under the securities laws of Australia, Canada, South Africa, New Zealand or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States, Australia, Canada, South Africa, New Zealand or Japan or in any country or jurisdiction where any action for that purpose is required;

12      it and/or each person on whose behalf it is participating:

(a)      is entitled to acquire Placing Shares (or Broker Option Shares, as the case may be) pursuant to the Placing under the laws and regulations of all relevant jurisdictions;

(b)      has fully observed such laws and regulations;

(c)      has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares (or Broker Option Shares, as the case may be) and will honour such obligations; and

(d)      has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto;

13      it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing in or into the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;

14      the Placing Shares (or Broker Option Shares, as the case may be) may not be sold, transferred or otherwise disposed on the TSX or, except pursuant to an exemption from prospectus requirements under Canadian securities laws, to any person in Canada, on the TSX or otherwise into Canada, for a period of four months plus one day from the date of completion of the Placing;

15      none of Numis, its affiliates and any person acting on its behalf is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of Numis and that Numis has no duties or responsibilities to it for providing the protections afforded to Numis' clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Agency Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

16      it will make payment to Numis (as Numis may direct) for the Placing Shares (or Broker Option Shares, as the case may be)allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement, failing which the relevant Placing Shares (or Broker Option Shares, as the case may be)may be placed with others on such terms as Numis may determine in its absolute discretion without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares (or Broker Option Shares, as the case may be)and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee's Common Shares on its behalf;

17      its allocation (if any) of Placing Shares (or Broker Option Shares, as the case may be) will represent a maximum number of Placing Shares (or Broker Option Shares, as the case may be) which it will be entitled, and required, to acquire or subscribe for, and that it may be called upon to acquire or subscribe for a lower number of Placing Shares and/or Broker Option Shares (if any), but in no event in aggregate more than the aforementioned maximum;

18      no action has been or will be taken by any of the Company, Numis or any person acting on behalf of the Company or Numis that would, or is intended to, permit a public offer of the Placing Shares or Broker Option Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;

19      the person who it specifies for registration as holder of the Placing Shares (or Broker Option Shares, as the case may be) will be (i) the Placee or (ii) a nominee of the Placee, as the case may be. Numis and the Company will not be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. It agrees to acquire Placing Shares or Broker Option Shares pursuant to the Placing on the basis that the Placing Shares or Broker Option Shares will be allotted to a CREST stock account of Numis who will hold them as nominee directly or indirectly on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;

20      the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares (or Broker Option Shares, as the case may be) will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares (or Broker Option Shares, as the case may be) would give rise to such a liability;

21      it and any person acting on its behalf falls within Article 19(5) and/or 49(2) of the Order, as amended, and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares (or Broker Option Shares, as the case may be) that are allocated to it for the purposes of its business only;

22      it has not offered or sold and will not offer or sell any Placing Shares (or Broker Option Shares, as the case may be) to persons in the United Kingdom prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85 (1) of FSMA;

23      if within the EEA, it is a Qualified Investor as defined in section 86(7) of FSMA, being a person falling within Article 2.1(e) of the Prospectus Directive;

24      it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to Placing Shares or Broker Option Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

25      it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares and Broker Option Shares (including all relevant provisions of MAR, FSMA and the Financial Services Act 2012 in respect of anything done in, from or otherwise involving the United Kingdom);

26      if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive (including any relevant implementing measure in any member state), the Placing Shares (or Broker Option Shares, as the case may be) acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the EEA which has implemented the Prospectus Directive other than qualified investors, or in circumstances in which the express prior written consent of Numis has been given to the offer or resale.

27      it has not offered or sold and will not offer or sell any Placing Shares or Broker Option Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in any member state of the EEA;

28      if it has received any confidential price sensitive information about the Company in advance of the Placing, it has not: (a) dealt in the securities of the Company; (b) encouraged or required another person to deal in the securities of the Company; or (c) disclosed such information to any person, prior to the information being made publicly available;

29      neither Numis, the Company nor any of their respective affiliates, or their or their respective affiliates' agents, directors, officers or employees, respectively, nor any person acting on behalf of such persons is making any recommendation to it, advising it regarding the suitability of any transaction it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any representation, warranty, acknowledgement, agreement, undertaking or indemnity contained in the Agency Agreement nor the exercise or performance of any of Numis' rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

30      acknowledges and accepts that Numis may, in accordance with applicable legal and regulatory provisions, engage in transactions in relation to the Placing Shares, Broker Option Shares and/or related instruments for their own account for the purpose of hedging their underwriting exposure or otherwise and, except as required by applicable law or regulation, Numis will not make any public disclosure in relation to such transactions;

31      it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Criminal Justice Act 1993, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 and any related or similar rules, regulations or guidelines issued, administered or enforced by any government agency having jurisdiction in respect thereof (together the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

32      its commitment to acquire Placing Shares (and/or Broker Option Shares, as the case may be) on the terms set out in this Announcement will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or Numis' conduct of the Placing;

33      it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of acquiring the Placing Shares and Broker Option Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;

34      the Company, Numis and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to Numis on its own behalf and on behalf of the Company and are irrevocable;

35      if it is acquiring the Placing Shares (or Broker Option Shares, as the case may be) as a fiduciary or agent for one or more investor accounts, it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such accounts;

36      time is of the essence as regards its obligations under this Appendix;

37      any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to Numis;

38      the Placing Shares (or Broker Option Shares, as the case may be) will be issued subject to the terms and conditions set out in this Appendix; and

39      this Appendix and all documents into which this Appendix is incorporated by reference or otherwise validly forms a part will be governed by and construed in accordance with English law. All agreements to acquire shares pursuant to the Placing will be governed by English law and the English courts shall have exclusive jurisdiction in relation thereto except that proceedings may be taken by the Company or Numis in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, Numis and each of their respective affiliates and each of their and their respective affiliates' agents, directors, officers and employees, respectively, harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings given by the Placee in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing.

The agreement to allot and issue Placing Shares (or Broker Option Shares, as the case may be) to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the UK relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, directly by the Company. Such agreement assumes that the Placing Shares (or Broker Option Shares, as the case may be) are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares (or Broker Option Shares) into a clearance service. If there were any such arrangements, or the settlement related to other dealings in the Placing Shares or Broker Option Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor Numis would be responsible. If this is the case, it would be sensible for Placees to take their own advice and they should notify Numis accordingly. In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Placing Shares, Broker Option Shares or the agreement by them to acquire any Placing Shares or Broker Option Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares and/or Broker Option Shares has given rise to such non-UK stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Numis in the event that either the Company and/or Numis have incurred any such liability to such taxes or duties.

The representations, warranties, acknowledgements and undertakings contained in this Appendix are given to Numis for itself and on behalf of the Company and are irrevocable.

Numis is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing and Admission and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Placing and will not be responsible to anyone (including Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or other matters referred to in this Announcement.

Each Placee and any person acting on behalf of the Placee acknowledges that Numis does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements or agreements or indemnities in the Agency Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Numis may (at its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares and/or Broker Option Shares or by nominating any connected or associated person to do so.

When a Placee or any person acting on behalf of the Placee is dealing with Numis, any money held in an account with Numis on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA which therefore will not require Numis to segregate such money, as that money will be held by it under a banking relationship and not as trustee.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

All times and dates in this Announcement may be subject to amendment. Numis will notify Placees and any persons acting on behalf of the Placees of any changes.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

Definitions

In this Announcement (including the Appendix), save where the context requires otherwise:

AIM

AIM, a market operated by the London Stock Exchange

Acquisition

the acquisition by Bea Mountain Mining Corporation (a subsidiary of the Company) of certain assets relating to the New Liberty Gold Project from Atmaca Services (Liberia) Inc

Acquisition Agreement

the agreement entered into between Bea Mountain Mining Corporation and Atmaca Services (Liberia) Inc on or around the date of the Agency Agreement to effect the Acquisition

Broker Option Shares

up to 540,000,000 Common Shares to be issued upon exercise of the Broker Option

Common Shares

common shares in the capital of the Company

MAR

Regulation (EU) No. 596/2014 on market abuse and any delegated or implementing regulations made thereunder (each as amended from time to time)

MNG Gold

MNG Gold Jersey Limited

MNG Gold Subscription

the subscription of 3,250,000,000 Common Shares by MNG Gold at the Placing Price

MNG Gold Subscription Agreement

the agreement entered into between the Company and MNG Gold on or around the date of the Agency Agreement to effect the MNG Gold Subscription

Placing

the conditional placing of Placing Shares and/or Broker Option Shares

Placing Shares

650,000,000 Common Shares (other than the Broker Option Shares) to be issued pursuant to the Placing

Project Finance Loan Facilities Waiver Letter

the waiver letter addressed to the Company from Nedbank Limited (as agent for the Company's lenders) dated 12 October 2016 (as referred to in the Announcement)

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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