Notice of Annual General Meeting

RNS Number : 9970I

SolGold PLC

23 June 2017

 

23 June 2017 

SolGold plc

("SolGold" or the "Company")

Notice of Annual General Meeting

Share Option Proposals

The following is an extract from a circular and notice of Annual General Meeting sent to shareholders of the Company on 23 June 2017:

Dear Shareholder,

Introduction

The purpose of this letter is to provide you with a brief summary and explanation of the resolutions proposed by SolGold Plc ("SolGold" or the "Company") as set out in the attached notice convening an Annual General Meeting ("AGM") of the Company at 11:00 am (Brisbane, Australia time) on Friday 28 July 2017 (the "Notice of AGM"). 

The Company would like to propose the following Ordinary Resolutions at the AGM:

Resolution 1

Resolution 1 is to receive the Company's financial statements and the report of the Board of Directors ("Directors") and auditors for the year ended 30 June 2016.  Shareholders will have a reasonable opportunity at the AGM to ask questions and comment on these reports and on the business and operations of the Company.

Resolution 2

Resolution 2 is to consider the re-election of Robert Weinberg.  Dr Weinberg retires in accordance with the Articles of Association ("Articles") and, being eligible, offers himself for re-appointment as a Director of the Company.

Resolution 3

Resolution 3 is to ratify appointment of Craig Jones as a Director of the Company Mr Jone's appointment as a Non-Executive Director requires confirmation by shareholder resolution, in accordance with the Articles.

Resolution 4

Resolution 4 seeks approval for the grant of 26,250,000 unlisted share options to Samuel Holdings Pty Ltd, a company associated with Nicholas Mather (Executive Director) on the terms set out in full in Appendix A ("Director Options").

Resolution 5

Resolution 5 seeks approval for the grant of 3,750,000 Director Options to Brian Moller.

Resolution 6

Resolution 6 seeks approval for the grant of 2,250,000 Director Options to John Bovard.

Resolution 7

Resolution 7 seeks approval for the grant of 2,250,000  Director Options to Robert Weinberg.

Resolution 8

Resolution 8 seeks approval for the grant of 2,250,000 Director Options to Craig Jones.

As the Directors are  interested in the outcome of Resolutions 4, 5, 6, 7 and 8, each Director accordingly makes no recommendation to Shareholders with regard to the outcome of these  Resolutions.  However, the Directors note that some reasons for the proposed grant of Director Options include that:

(i)         the Director Options are not intended as a substitute for salary or wages or as a means for compensation for past services rendered; and

(ii)       in the Company's circumstances as they exist as at the date of this Chairman's Statement, the proposed Director Options provide a cost-effective and efficient incentive as opposed to alternative forms of cash-based incentives (e.g. bonuses or increased remuneration levels). 

Resolution 9

Resolution 9 is to re-appoint BDO (UK) LLP as auditors of the Company to hold office from the conclusion of the AGM to the conclusion of the next AGM at which accounts are laid before the Company at a remuneration level to be determined by the Directors.

Resolution 10

Resolution 10 proposes to authorise the Directors to allot and issue ordinary shares of 1 pence each in the Company ("Shares") or grant rights to subscribe for or to convert any securities into Shares up to an aggregate nominal amount of £6,000,000, such authority to expire at the next AGM or fifteen months after the passing of this resolution, whichever date is the earlier.

Resolution 11

Resolution 11 proposes to seek the adoption of a Share Option Plan.

Resolution 12

Resolution 12 seeks approval for the purposes of article 20.1 of the  Articles to increase the total aggregate annual remuneration payable to Directors (other than alternate Directors) from £250,000 to £400,000 per annum.

The recommended aggregate remuneration amount is made by the Board taking into account fees presently paid to directors of comparable companies in the market.  The Board is of the view that setting the maximum aggregate annual remuneration at £400,000 will provide the Company with sufficient room to engage additional directors (as required) and remunerate appropriately in light of industry standards moving forward.

The Company is also proposing the following Special Resolution at the AGM:

Resolution 13

The Companies Act 2006 (the "Act") requires that any equity securities issued for cash must first be offered to existing shareholders pro rata to their holdings unless approval is obtained by special resolution to disapply this requirement.  It is proposed that this authority also be renewed for the same period as the authority under Resolution 10.  The Company is seeking disapplication of pre-emption rights in connection with any equity securities to be allotted and issued up to a nominal amount of Shares equal to £6,000,000.

Shareholder Voting

All Shareholders registered as holding Shares at 11:00 am (Brisbane, Australia time) on 26 July 2017, or any adjournment of it shall be (unless otherwise entitled to do so) entitled to attend the AGM and vote on the Resolutions proposed.

Action to be taken by Shareholders

Attached to the Notice of AGM accompanying this letter is a Proxy Form for use by Shareholders.  All Shareholders are invited and encouraged to attend the AGM or, if they are unable to attend in person, to complete, sign and return the Proxy Form to the Company.  Lodgement of a Proxy Form will not preclude the Shareholder from attending and voting at the AGM in person.

Shareholders can either vote online or deliver the Proxy by hand, by mail, by facsimile or as an attachment by email.

Recommendations

The Board of Directors believes that Ordinary Resolutions 1-3 and 9 - 11 and Special Resolution 13 are fair and reasonable and in the best interests of the Company and Shareholders alike, and therefore recommends you to vote in favour of them. 

As the Directors are interested in the outcome of Resolutions 4 to 8 (inclusive), the Board does not believe it is appropriate to make any recommendation in relation thereto.

The Board does advise that the Remuneration Committee commissioned reports from a remuneration consultant on the proposed option issues the subject of Resolutions 4 to 8 inclusive.

In respect of the proposed issue of 26,250,000 Director Options pursuant to Resolution 4 the consultant advised that the issue of Director Options is in line with market practice.

In respect of Resolutions 5 to 8 inclusive the consultant advised that overall the proposed grant of Director Options to the Chairman and other Non-executive Directors was at the high end of the market when compared with SolGold's peer group ; however, when considering the combination of a variety of factors including the lower than normal Directors fees, the recent rise in the Company's share price and the strike price of the Director Options,  the remuneration consulted considered the proposed grant of Director Options to be fair and reasonable.

In respect of Resolutions 5 to 8 inclusive the consultant advised that overall the proposed intended grant of Director Options to the Chairman and other Non-executive Directors was at the high end of the market when compared with SolGold's peer group; however, when considering the combination of a variety of factors including the lower than normal Directors' fees, the recent rise in the Company's share price and the strike price of the Director Options, the remuneration consulted considered the proposed grant of Director Options to be fair and reasonable.

The Company's nominated adviser, SP Angel Corporate Finance LLP, considers that the terms of the proposed grant of the Directors Options are fair and reasonable insofar as the Company's shareholders are concerned.

Yours faithfully,

Karl Schlobohm

Company Secretary

Appendix A

A summary of the terms of the 36,750,000 Director Options to be issued to Samuel Holdings Pty Ltd, a company associated with Nicholas Mather, Brian Moller, John Bovard, Robert Weinberg and Craig Jones is set out below:

·       The securities to be issued are options to subscribe for ordinary shares of 1 pence each ("Shares") in the share capital of the Company ("Director Options").

·       The Options are to be issued for nil consideration.

·       The exercise price of each Director Option is 60 pence  ("Exercise Price").

·       The number of Options to the following Directors is set out as below:

Recipient	Number of Director Options
Samuel Holdings Pty Ltd, a company associated with Nicholas Mather	26,250,000
Brian Moller	3,750,000
John Bovard	2,250,000
Robert Weinberg	2,250,000
Craig Jones	2,250,000
Total	36,750,000

·       The Director Options will automatically vest and will be exercisable on and from the earlier of:

(a) the date that is 18 months after the date the Directror Options are issued;

(b)  a Change of Control Event occurring; and

(c) the recipient ceasing to be a director, employee or contractor of the Company other than due to fraud or dishonesty.

For the purposes of this paragraph, a Change of Control Event means:

(i)            a takeover bid or equivalent is made or another process occurs which results in a person obtaining Control of more than 50% of the voting rights attaching to shares in the Company;

(ii)           a Court has sanctioned a compromise or arrangement (other than for the purpose of, or in connection with, a scheme for the reconstruction of the Company);

     (iii)           any other transaction which results in a change of control of the Company.

·       The Director Options will lapse and expire immediately on the earlier of:

(a)        three (3) years from the date of issue of the Director Options;

(b)        the expiration of three (3) months, or any longer period as may be determined by the Board, after the recipient ceases to be an employee or contractor of the Company; or

(c)        the recipient ceasing to be an employee or  contractor of the Company due to fraud or dishonesty.

·     The Director Options, once issued, will be transferable in whole or in part with the written permission of the Company.

·     Upon the valid exercise of the Director Options and payment of the Exercise Price, the Company will issue Shares ranking pari passu with the then issued Shares.

·     The Director Options may be exercised wholly or in part by delivering a duly completed form of notice of exercise together with a cheque for the Exercise Price per Option to the Company at any time on or after the vesting date and on or before the expiry date provided that the minimum number of Director Options that may be exercised at any one time is 10,000 Director Options. 

·     While the Option holder does not have any right to participate in new issues of Securities in the Company to Shareholders generally, the Option holder will be afforded such period of notice as may be required under any relevant regulations prior to and inclusive of the record date (to determine entitlements to the issue) to exercise the Director Options.

·     The Option holder does not participate in any dividends unless the Director Options are exercised and the resultant Shares of the Company are issued prior to the record date to determine entitlements to the dividend.

·     The Company does not intend to apply for a stock exchange listing of the Director Options.

·     The Company shall apply for listing on the stock exchange of the resultant Shares of the Company issued upon exercise of any Option.

·     While the Option holder does not have any participating rights in new issues of securities in the Company during the term of any Director Options held, in the event of a bonus issue or pro-rata issue the Option holder shall be afforded such period of notice as may be required under any relevant regulations before the record date to determine entitlements to the issue, to exercise the Director Options and it shall be a condition of the Director Options that any entitlements to bonus issues of securities are only available to the Option holder in the event of a prior exercise of the Director Options.

·     If there is a pro rata issue (except a bonus issue), the exercise price of a Director Option may be reduced according to the following formula:

     On= O -    E [P - (S + D)]

                           N + 1

Where:

On = the new exercise price of the Option;

O = the old exercise price of the Option;

E = the number of underlying Shares into which one Option is exercisable;

P = if the Company is listed, the average market price per Share (weighted by reference to volume) of the underlying Shares during the five (5) trading days ending on the day before the ex rights date or ex entitlements date and otherwise, the market value per Share determined by the auditor of the Company at the time of any pro-rata issue;

S = the subscription price for a Share under the pro rata issue;

D = the dividend due but not yet paid on existing underlying Shares (except those to be issued under the pro rata issue); and

N = the number of Shares with rights or entitlements that must be held to receive a right to one new Share.

·     If there is a bonus issue to the holders of Shares in the Company, the number of Shares over which the Option is exercisable may be increased by the number of Shares which the Option holder would have received if the Option had been exercised before the record date for the bonus issue.

·     The terms of the Director Options shall only be changed if holders (whose votes are not to be disregarded) of Shares in the Company approve of such a change.  However, the terms of the Director Options shall not be changed to reduce the Exercise Price, increase the number of Director Options or change any period for exercise of the Director Options save as set out above.

·     In the event of any reconstruction (including consolidation, subdivision or reduction) of the issued share capital of the Company:

(a)          the number of Director Options, the Exercise Price of the Director Options, or both will be reconstructed (as appropriate) in a manner consistent with the relevant listing rules as applicable at the time of reconstruction, but with the intention that such reconstruction will not result in any benefits being conferred on the holders of the Director Options which are not conferred on Shareholders; and

(b)          subject to the provisions with respect to rounding of entitlements as sanctioned by a meeting of Shareholders approving a reconstruction of capital, in all other respects the terms for the exercise of the Director Options will remain unchanged.

·     In the event that as a requirement of admission or continued admission of the Company on AIM or any other recognised stock exchange (Exchange), the Company requires the terms of the Director Options to be amended to meet the reasonable requirements of the Exchange, the Option holder consents and agrees to the same and will do all acts and things and execute all such further documents as may be required to give effect to this term.

Appendix B

Summary of terms and conditions of Employee Share Option Plan

1.      Options to purchase Shares

Options (Option) under the Employee Share Option Plan (ESOP) will mean an option to purchase ordinary shares of 1 pence each in the Company (Shares).

2.      Eligible Persons

The directors of the Company or the directors of any designated affiliate are "Eligible Directors" under the ESOP.

Employees and officers, whether directors or not, and including full-time and part-time employees, of the Company or any designated affiliate are "Eligible Employees under the ESOP.

Any person engaged to provide ongoing management or consulting services for the Company or a designated affiliate, and any employee of such a person or corporation (other than an Eligible Director or an Eligible Employee) is an "Other Participant" under the ESOP.

Eligible Directors, Eligible Employees and Other Participants are "Participants" under the ESOP. The directors or, if the directors so determine, a committee of the directors authorised to administer the ESOP (together, the Committee) shall determine the Participants who may participate in the ESOP, and to whom Options may be granted.

3.      Limitation to number of Options offered under the ESOP

The maximum number of Shares made available for the ESOP and all other share compensation arrangements shall not exceed 10% of the Shares on issue immediately prior to the proposed grant on the applicable Option.

The maximum number of Shares issuable to Insiders, as defined in the Securities Act of the Province of Ontario (which includes directors and officers of reporting issuers) and their associates and affiliates, pursuant to the ESOP and any other share compensation arrangement is 10% of the total number of Shares on issue. The maximum number of Shares issued to Insiders, within any one year period, pursuant to the ESOP and any other share compensation arrangement is 10% of the total number of Shares on issue.

4.      Administration of ESOP

The ESOP will be administered by the Committee, who will have full authority to administer the ESOP.

The Committee determine:

a)    the Participants to whom Options may be granted

b)    the number of Shares to be made subject to and the expiry date of each Option granted to each Participant; and

c)     the other terms of each Option granted to each Participant including their exercise price and vesting schedule.

All such determinations are to be made in accordance with the provisions of the Plan.

5.      Vesting and exercise of Options

The Committee may determine a vesting schedule at the time of the granting of an Option.

Unless specifically provided for under the ESOP or any employment contract, Options may only be exercised in accordance with the vesting schedule. If no vesting schedule is determined by the Committee at the time of grant of a particular Option, that Option may be exercised at any time during the option period.

Further, unless specifically provided for under the ESOP or any employment contract, no Option maybe exercised unless at the time of exercise the holder of the option is:

·      for an Eligible Employee - an officer or in the employment of the Company or a designated affiliate and has been so since the grant of the Option;

·      for an Eligible Director - a director of the Company or a designated affiliate and has been so since the grant of the Option; and

·      for any Other Participant - engaged in providing ongoing services for the Company or a designated affiliate and has been so since the grant of the Option.

However, if a Participant ceases to be a director of, or employed by, the Company or a designated affiliate other than for cause, unless otherwise provided for the Participant may exercise their Options within 90 days of such cession.

If there is a change of control of the Company, Options will immediately vest and be exercisable if the Participant is not an Eligible Employee, and if the Participant is an Eligible Employee, if within 12 months of the change of control the Participant's employment is terminated.

6.      Rights of Option Holders

Holders of Options will not have any rights as a shareholder of the Company with respect to any Shares which are the subject of an Option. Holders of Options are not entitled to receive any dividends, distributions or other rights declared for shareholders prior to the date of issue of certificates representing Shares received on the exercise of their Options.

7.      Term and lapsing of Options

The option period for each Option will be determined by the Committee, but shall not exceed 10 years.

If Options granted under the ESOP are surrendered, terminate or expire without being exercised in whole or in part, new Options may be granted covering the Shares not purchased under such lapsed Options.

8.      Acceleration on take-over

If a take-over bid is made for all or a portion of the Shares, the Committee may by resolution permit all Options outstanding to become immediately exercisable, so they may participate in the bid.

9.      Transfer of Options

Except on the death of a Participant, rights under or Options granted pursuant to the ESOP are not assignable or transferable by any Participant.

10.    Amendment of the ESOP

The Committee has the right to make amendments to the ESOP, subject to the receipt of all required regulatory approval. Some amendments (particularly those of a housekeeping nature) may be made without the approval of shareholders, while other amendments require the approval of shareholders b an ordinary resolution.

11.    Termination or suspension of the ESOP

The Committee have the right to suspend or terminate (and to re-instate) the ESOP without the approval of shareholders.

12.    Governing law

The ESOP shall be governed by, and construed in accordance with, the laws of England and Wales.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

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 future development company with assets in Ecuador, Solomon Islands and Australia.  SolGold's primary objective is to discover and define world‐class copper‐gold deposits.  The Board and Management Team have substantial vested interests in the success of the Company as shareholders as well as strong track records in the areas of exploration, mine appraisal and development, investment, finance and law.  SolGold's experience is augmented by state of the art geophysical and modelling techniques and the guidance of porphyry copper and gold expert Dr Steve Garwin.

SolGold was shortlisted as a nominee for the Mining Journal Explorer Achievement Award for 2016. The Company announced USD54m in capital raisings in September 2016 involving Maxit Capital LP, Newcrest International Ltd and DGR Global Ltd, and a USD41.2m raising in June of 2017 largely from Newcrest International with USD1.2m raised from Ecuadorean investors.  All of these raisings were undertaken at substantial premiums to previous raisings, and SolGold has circa USD70 million in available cash to continue the exploration and development of its flagship Cascabel Project.

Mr Craig Jones joined the SolGold Board on 3 March 2017, nominated to the Board of SolGold by Newcrest Mining, now a 14.54% shareholder in SolGold.  Mr Jones is a Mechanical Engineer and is currently the Executive General Manager Wafi-Golpu (Newcrest-Harmony MMJV).  He has held various senior management and executive roles within the Newcrest Group, including General Manager Projects, General Manager Cadia Valley Operations, Executive General Manager Projects and Asset Management, Executive General Manager Australian and Indonesian Operations, Executive General Manager Australian Operations and Projects, and Executive General Manager Cadia and Morobe Mining Joint Venture.  Prior to joining Newcrest, Mr Jones worked for Rio Tinto.

Cascabel, SolGold's 85% owned "World Class" flagship copper‐gold porphyry project, is located in northern 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 ("Cornerstone"), which holds the remaining 15% of ENSA, the Ecuadorian registered company which holds 100% of the Cascabel concession.

The investments by Newcrest for 14.54% of SolGold, and the investments into SolGold by Guyana Goldfields, Maxit Capital and its clients, endorses Ecuador as an exploration and mining destination, the management team at SolGold, the dimension, size and scale of the growing Alpala, and the prospectivity of Cascabel and its multiple targets.  The gold endowment, location, infrastructure, logistics are important competitive advantages offered by the project.

To date SolGold has completed geological mapping, soil sampling, rock saw channel sampling, geochemical and spectral alteration mapping over 25km², along with an additional 9km² of Induced Polarisation and 14km² Magnetotelluric "Orion" surveys over the Alpala cluster and Aguinaga targets.

SolGold has completed over 39,000m of drilling and expended over USD45.6M on the program, which includes corporate costs and investments into Cornerstone.  This has been accomplished with a workforce of up to 176 Ecuadorean workers and geoscientists, and 6 expatriate Australian geoscientists.  The results of 26 holes drilled (including re-drilled holes) and assayed to date have produced some of the greatest drill hole intercepts in porphyry copper-gold exploration history, as indicated by Hole 12 (CSD-16-012) returning 1560m grading 0.59% copper and 0.54 g/t gold including, 1044m grading 0.74% copper and 0.54 g/t gold.  The average grade of all metres drilled to date on the project currently stands at 0.32% copper and 0.27 g/t gold.  Intensive diamond drilling is planned for the next 12 months with 10 drill rigs expected to be operational by early 2018, targeting over 90,000m of drilling per annum.

Cascabel is characterised by fifteen (15) identified targets, "World Class" drilling intersections over 1km in length at potentially economic grades, and high copper and gold grades in richer sections, as well as logistic advantages in location, elevation, water supply, proximity to roads, port and power services; and a progressive legislative approach to resource development in Ecuador. 

To date, SolGold has drill tested 4 of the 15 targets, being Alpala Northwest, Alpala Central, Hematite Hill, and Alpala Southeast.  Currently drill testing of Alpala Northwest, Alpala Central and Alpala Southeast targets is underway, with drill testing of the Aguinaga target to commence in August 2017.

The Alpala deposit is open in multiple directions and the mineralised corridor marked for drill testing of the greater Alpala cluster occurs over a 2.2km strike length from Trivinio in the northwest to Cristal in the southeast.  The mineralised corridor is known to be prospective over approximately 700m width. 

High priority targets within the Alpala cluster, at Moran approximately 700m to the north, and at Aguinaga approximately 2.3km north east, are closely modelled by 3D MVI magnetic signatures that currently encompass over 15Bt of magnetic rock.  Based on a strong spatial and genetic relationship between copper sulphides and magnetite, this body of magnetic rock is considered to be highly prospective for significant copper and gold mineralisation, and requires drill testing.

SolGold is focussing on extending the dimensions of the Alpala deposit including Hematite Hill, Alpala South East, Cristal, Alpala Northwest and Trivinio before completing a resource statement and drill testing of the other key targets within the Cascabel concession at Aguinaga, Tandayama-America, Alpala West, Carmen, Alpala East, Moran, Parambas, and Chinambicito.

The Company is currently planning further metallurgical testing and completion of an independent Pre-Feasibility Study at Cascabel.  SolGold is investigating both high tonnage open cut and underground block caving operations, as well as a high grade / low tonnage initial underground development towards the economic development of the copper gold deposit/s at Cascabel.

Drill hole intercepts have been updated to reflect current commodity prices, 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 0.63, determined using an updated copper price of USD3.00/pound and an updated gold price of USD1300/ounce.  True widths of down hole intersections are estimated to be approximately 25-50%.

Following a comprehensive review of the geology and prospectivity of Ecuador, SolGold and its subsidiaries have also applied for additional exploration licences in Ecuador over a number of promising porphyry copper gold targets throughout the Country.  SolGold is negotiating external funding options which will provide the Company with the ability to have some of these projects fully funded by a third party while focussing on Cascabel.

In Queensland, Australia the Company is evaluating the future exploration plans for the Mt Perry, Rannes and Normanby projects, with drill testing of the Normanby project planned for the coming quarter.  Joint venture agreements are being investigated for a joint venture partner to commit funds and carry out exploration to earn an interest in the tenements.

SolGold retains interests in its original theatre of operations, Solomon Islands in the South West Pacific, where the 100% owned, but as yet undrilled, Kuma prospect on the island of Guadalcanal exhibits surface lithocap characteristics which are traditionally indicative of a large metal rich copper gold intrusive porphyry system.  SolGold intends in the future to apply intellectual property and experience developed in Ecuador to target additional "World Class" copper gold porphyries at Kuma and other targets in Ecuador and Argentina.

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 1,511,195,685 ordinary shares issued, together with 33,975,884 options exercisable at 28p and 11,975,884 options exercisable at 14p.

 

END

 

 

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