Bonus Issue and Proposed Placing - Amendment

RNS Number : 2153O

Golden Prospect Precious Metals Ltd

14 September 2011

GOLDEN PROSPECT PRECIOUS METALS LIMITED

The announcement made at 8:00 a.m. on Wednesday 14 September 2011 should be titled "Bonus Issue and Proposed Placing".

All other details remain unchanged.

Bonus Issue of Subscription Shares

and

Proposed Placing of New Ordinary Shares

Highlights

· One for two bonus issue of subscription shares to all shareholders of the Company

o Provides an instrument which may be traded on-market and gives shareholders the opportunity to participate in any future net asset growth of the Company

· In conjunction with the bonus issue, the Company intends to raise up to £115 million (gross) via the placing of New Ordinary Shares

o Net proceeds will be invested in accordance with the Company's investment objective - to provide investors with capital growth, from a portfolio of companies involved in the precious metals sector.

Bonus Issue of Subscription Shares

Golden Prospect Precious Metals Limited ("GPPM" or the "Company"), the investment company which invests in gold and precious metals companies, is pleased to announce a one for two bonus issue of subscription shares ("Subscription Shares") to all shareholders of the Company (the "Bonus Issue").

The issue of Subscription Shares is in recognition of the invaluable support the Company has received from its shareholders. The Board believes that a bonus issue of Subscription Shares will be beneficial to existing shareholders as it will provide them with an instrument which may be traded on-market and gives them the opportunity to participate in any future net asset growth of the Company through subscribing for ordinary shares in the Company ("Ordinary Shares").

The Subscription Shares will be issued for nil consideration and will be distributed on a pro rata basis of one Subscription Share for every two Ordinary Shares held by existing shareholders on the record date for the Bonus Issue which is expected to be on or around 5.00 pm (GMT) on 28 October 2011. The Ordinary Shares are expected to be quoted on an 'ex' entitlement basis on or around 31 October 2011. No fractions of Subscription Shares will be allotted or issued and entitlements will be rounded down to the nearest whole number of Subscription Shares. A further announcement confirming the record date and 'ex' entitlement date will be made in due course.

A registered holder of Subscription Shares will have the right (but not the obligation) to convert all or any of his Subscription Shares into fully paid Ordinary Shares, on the basis of one Ordinary Share for every Subscription Share held. Conversion may be achieved by subscribing in cash for all or any of the Ordinary Shares for which the registered holder is entitled to subscribe. Conversion may be done on the last business day of May, August, November or February (each a "subscription date") commencing on the last business day of May 2012 and quarterly thereafter. The final date on which holders of Subscription Shares will be entitled to exercise their rights to convert into Ordinary Shares will be 28 November 2014.

The Subscription Shares will rank equally with each other, but will not generally carry the right to receive any dividends from the Company or the right to attend and/or vote at general meetings of the Company.

On the basis of the NAV of 129.9 pence per Ordinary Share as at 9 September 2011, the subscription price will be 150p per Ordinary Share. If the net asset value changes materially over the next six weeks, the subscription price may be varied at the discretion of the Board. It is anticipated that an announcement setting out the subscription price will be made by 28 October 2011 or such other time being on or before the record date.

A Listing Document prepared in accordance with the Listing Rules of the Channel Islands Stock Exchange, LBG ("CISX") setting out full details of the Bonus Issue (together with the Proposed Placing, as described further below) is expected to be published around the end of October 2011, at approximately the same time as the application will be made for the Subscription Shares (and the new Ordinary Shares under the Proposed Placing) to be admitted to the Official List of the CISX and to be admitted to trading on the SETSqx trading platform of the London Stock Exchange (together "Admission").

The Directors believe the Bonus Issue will have the following advantages:-

· Subscription Shares represent an attractive way in which investors can participate in any future net asset value growth of the Company through conversion into Ordinary Shares at a predetermined Sterling price;

· Eligible shareholders will receive listed securities with a monetary value which may be traded in a similar fashion to their existing Ordinary Shares or converted into Ordinary Shares;

· on any exercise of conversion rights attaching to the Subscription Shares, the capital base of the Company will increase, allowing operating costs to be spread across a larger number of Ordinary Shares, which is expected to cause the total expense ratio to fall;

· following the exercise of conversion rights attaching to Subscription Shares, the Company will have an increased number of Ordinary Shares in issue, which may in due course improve the liquidity in the market for its Ordinary Shares; and

· Eligible shareholders will receive securities which are qualifying investments for the purposes of the stocks and shares component of an ISA and permitted investments for the purposes of a SIPP.

Proposed Placing

In conjunction with the Bonus Issue described above, the Company also announces its intention to issue new Ordinary Shares ("New Ordinary Shares") by way of a placing to existing and new investors (the "Proposed Placing") to raise up to £115 million (gross) for the Company. The net proceeds from the Proposed Placing will be invested by the Company in accordance with the Company's investment objective and approach. The Company's stated objective is to provide investors with capital growth, from a portfolio of companies involved in the precious metals sector.

With the increases in global prices for gold and silver, many mining companies are generating increased profits, which have yet to be reflected in their share prices.

The sovereign debt crisis is leading many investors to turn to precious metals as a perceived "safe haven" asset and one without counterparty risk.

The Board and the Investment Manager believe that precious metals are under-represented in global investment portfolios. GPPM has a proven track record and the Proposed Placing will provide an opportunity for investors to participate in its successful investment approach:

The following table sets out the NAV performance of the Company over the period from 2 January 2009 to 1 September 2011 compared with the performance of the Philadelphia Gold and Silver XAU Index in Sterling and Gold price in Sterling over the same period:-

	Total return
	2.1.09 to 1.9.11
GPPM NAV	+248.5%
Philadelphia Gold and Silver XAU Index in Sterling	+57.6%
Gold Price in Sterling	+85.4%

Source: Bloomberg

The Proposed Placing will be conditional upon, inter alia, Admission which is expected to take place, and unconditional dealings commence, on the CISX and SETSqx around the end of October 2011. A further announcement setting out additional details of the Proposed Placing will be made in due course. Full details of the Proposed Placing will also be set out in the Listing Document described above.

Investors who have acquired New Ordinary Shares pursuant to the Proposed Placing will receive Subscription Shares on the same basis as other holders of Ordinary Shares.

The Company intends to proceed with the issue of the Subscription Shares if, for any reason, the Proposed Placing does not go ahead.

John Wong manages the GPPM portfolio and is a Chartered Accountant with over ten years' experience including investment management roles at Ruffer LLP and Rothschild Asset Management. Since New City Investment Managers took over the fund in September 2008 John has been GPPM's lead fund manager.

John Wong comments on the announcement; "We have taken the decision to provide our shareholders with a bonus issue of shares in recognition of the invaluable support we have received from them over the years. Through our portfolio approach we continue to identify key investments within the precious metals sector and are committed to generating growth for our shareholders. We look forward to building on GPPM's strong performance through our investment in precious metals companies operating globally".

Enquiries:

Legis Fund Services Limited

Hannah Girard

Tel: +44(0) 1481 732 191

Singer Capital Markets Limited

James Maxwell

Jennifer Wyllie

Tel: +44(0) 20 3205 7500

Threadneedle Communications

Beth Harris

Tel: +44(0) 20 7653 9855

Notes to Editors

The objective of GPPM is to provide investors with capital growth, from a portfolio of companies involved in the precious metals sector.

If you would like to receive the monthly factsheet on Golden Prospect Precious Metals Limited or any of the other New City Investment Managers' trusts please email beth.harris@threadneedlepr.co.uk.

Please see the below table for the funds' ordinary share and NAV performance over a five year period: