Loan Agreement

RNS Number : 8778C

SolGold PLC

01 July 2016

 

1 July 2016

SolGold plc

("SolGold" or the "Company")

Loan Agreement with DGR Global

The Directors of SolGold Plc (AIM: SOLG; the Company) wish to advise that the Company has executed a short-term unsecured loan agreement with DGR Global Limited ("DGR Global") to provide up to $7 million in funding for the period through to 31 December 2016.  The loan agreement covers recent advances made by DGR Global and SolGold's likely future short-term working capital requirements.

The loan bears interest of 9.5% per annum and is repayable by SolGold on the earlier of any capital raising event, or 31 December 2016.  Interest accrued on the loan is only payable on the repayment date.

DGR Global can, at its sole election, convert all or part of the loan, including accrued interest, into  equity of the Company in the event that SolGold conducts an equity capital raising, at the same price as third party participants, subject to DGR Global and SolGold obtaining all necessary regulatory approvals.

DGR Global currently holds a 15.99% interest in the issued ordinary share capital of SolGold and is a related party to SolGold, as defined in the AIM Rules for Companies ("AIM Rules").

Brian Moller and Nicholas Mather are Directors of both SolGold and DGR Global. The loan referred to above is a related party transaction as specified in Rule 13 of the AIM Rules. Accordingly, John Bovard and Robert Weinberg, being the independent Directors of SolGold for the purposes of Rule 13 of the AIM Rules consider, having consulted with the Company's nominated adviser, SP Angel Corporate Finance LLP, that the terms and conditions of the loan by DGR Global are fair and reasonable insofar as the shareholders of the Company are concerned. 

By order of the Board

Karl Schlobohm

Company Secretary

CONTACTS

Mr Nicholas Mather                                                                                       Tel: [phone]

SolGold Plc (Executive Director)                                                                                       [phone]

[e-mail]

Mr Karl Schlobohm                                                                                         Tel: [phone]

SolGold Plc (Company Secretary)

[e-mail]

Mr Ewan Leggat / Mr Richard Morrison                                                 Tel: [phone]

SP Angel Corporate Finance LLP (NOMAD and Broker)

[e-mail]

Follow us on twitter @SolGold_plc

NOTES TO EDITORS

SolGold is a Brisbane, Australia based, AIM‐listed (SOLG) copper gold exploration and development company with assets in Ecuador, the Solomon Islands and Australia.  The Company's objective is to create substantial shareholder value by discovering and defining world‐class copper‐gold deposits.  SolGold's Board and Management Team have high vested interests in the success of Company, holding approximately 11% of its issued share capital, as well as strong track records in the areas of exploration mine development, investment, finance and law.  SolGold's experience is augmented by state of the art geophysical techniques and the guidance of Newmont trained porphyry expert Dr Steve Garwin.

Cascabel, the Company's world class flagship copper‐gold porphyry project, is located in North West Ecuador on the under‐explored northern section of the richly endowed Andean Copper Belt.  SolGold owns 85% of Exploraciones Novomining S.A. ("ENSA") and approximately 11% of TSX‐V‐listed Cornerstone Capital Resources, which holds the remaining 15% of ENSA, the Ecuadorian registered company which holds 100% of the Cascabel concession. 

To date the Company has completed geological mapping, soil sampling, 14km² and 9km² Induced Polarisation and Magnetotelluric "Orion" surveys at the Alpala and Aguinaga targets respectively.  By December 2015, the Company had completed approximately 25km² of soil sampling, 14km² of electrical surveys, 20,100m of drilling and expended approximately US$30m.  Diamond drilling currently continues with two drilling rigs.

Cascabel is characterised by multiple targets, world class drilling intersections over 1km in length, and high copper and gold grades, as well as logistic advantages in location, elevation, water supply, proximity to road, port and power services and a progressive legislative approach to resource development.

SolGold is planning a resource statement at Alpala the most advanced target at Cascabel during 2016, in addition to drill testing the other key targets in the Cascabel concession at Aguinaga, Trivinio, Alpala Northwest, Hematite Hill, Alpala Southeast, Cristal, Tandayama-America and Chinambicito.  By the end of 2016 the Company is planning further metallurgical testing, and completion of early stage mine and plant design and a scoping study for an economic development at Cascabel.  SolGold is investigating both high tonnage / low grade open cut and high grade / low tonnage underground developments as a block caving operation.

Drill hole intercepts are calculated using a data aggregation method, defined by copper equivalent cut-off grades and reported with up to 10m internal dilution, excluding bridging to a single sample.  Copper equivalent grades are calculated using a gold conversion factor of 0.6, determined using copper price of US$3/pound and gold price of US$40/gram.

In Queensland, Australia the Company is evaluating the future exploration plans for the Mt Perry, Rannes and Normanby projects.  Joint venture agreements are still being investigated with the strategy for the joint venture partner to commit funds and carry out exploration to earn an interest in the tenements.

SolGold is based in Brisbane, Queensland, Australia.  The Company listed on London's AIM Market in 2006, under the AIM code 'SOLG' and currently has a total of 953,897,601 ordinary shares issued, 4,820,000 options exercisable at 50p, 7,280,000 options exercisable at 28p and 9,280,000 options exercisable at 14p.

CAUTIONARY NOTICE

The news release may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's directors. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements. Accordingly, you should not rely on any forward-looking statements and save as required by the AIM Rules for Companies or by law, the Company does not accept any obligation to disseminate any updates or revisions to such forward-looking statements.

 

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