Issue of loan notes to directors and managers

RNS Number : 7797J

Kavango Resources PLC

15 April 2020

 

PRESS RELEASE

15 April 2020

KAVANGO RESOURCES PLC

("Kavango" or "the Company")

Issue of loan notes to directors and managers increases total financing to £468,487

Kavango Resources plc (LSE: KAV), the exploration group listed on the Standard List segment of the main market of the London Stock Exchange and targeting the discovery of world-class mineral deposits in Botswana, is pleased to announce it has reached agreement with certain directors and managers for the settlement of arrears of remuneration by the issue of convertible unsecured loan notes.

In order to preserve the Company's cash resources, directors and senior managers have been deferring their remuneration for some time and a balance of £91,855 was due in this respect.

Earlier today the Company announced that it has raised £358,500 of working capital through, among other things, a placing and subscription of new shares at a placing price of 0.8p per new ordinary share (the "Placing), the issue of £38,000 zero coupon convertible loan notes 2021 and the issue of £102,500 of a series of 10% convertible unsecured loan notes 2021 (the latter being "Notes"). The Company has now agreed with directors and senior managers to issue a further £109,987 nominal of the Notes for cash of £18,132 and in payment of the balance of arrears of remuneration, as follows:

 The Notes are repayable, if not previously converted, on 31 March 2021 and bear a coupon at the rate of 10% per annum.

Conversion of the Notes, including accrued interest, is at the same conversion price as the Placing price in the recent financing, namely 0.8p per ordinary share, is at the instance of the Company only, and is conditional upon the Company issuing a new prospectus, which will enable the admission to listing of the new shares to be issued on conversion. If the Company does not issue a prospectus and obtain approval for the admission of these new shares to listing by 28 February 2021, and then exercise its conversion right, then the CLN will be repayable in full on 31 March 2021 together with the accrued interest. If fully converted, the £109,987 nominal of Notes to be issued to directors and managers will result in the issue of a further 13,748,375 new ordinary shares. The directors and managers will each receive one warrant for each 0.8p nominal of the Notes taken up, exercisable at 1p and with a 3-year expiry from the date of Admission of the Placing shares (the "A" Warrants).

"A" Warrant holders will receive a full replacement warrant ("B" Warrants), exercisable at 2.5p, for every "A" Warrant they exercise within 12 months of the Admission of the Placing shares. "B" Warrants will have a 3-year expiry from the date of Admission of the Placing shares.

The "A" Warrants are, and the "B" Warrants will be, conditional upon the Company issuing, prior to 28 February 2021, a new prospectus, giving permission for the admission to listing of the new shares to be issued on exercise. They will also be conditional upon the Company's shareholders granting the necessary authorities under the Companies Act 2006 to enable the issue of such shares, outside the statutory pre-emption rights, and the Company intends to put these resolutions to shareholders at the 2020 AGM, which is expected to be held, subject to ongoing coronavirus restrictions, in mid-2020.

For further information please contact:

Kavango Resources plc   [phone]

Michael Foster

[e-mail]

SI Capital Limited (Broker)   [phone]

Nick Emerson

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