Open Offer

RNS Number : 7470H

SolGold PLC

18 March 2015

 



18 March, 2015

SolGold plc

("SolGold" or the "Company")

Open Offer

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, ANY OFFER FOR SALE OR SUBSCRIPTION OF, OR SOLICITATION OF ANY OFFER TO BUY OR SUBSCRIBE FOR, ANY SHARES IN SOLGOLD OR SECURITIES IN ANY OTHER ENTITY, IN ANY JURISDICTION, INCLUDING THE UNITED STATES, NOR SHALL IT, OR ANY PART OF IT, OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR INVESTMENT DECISION WHATSOEVER, IN ANY JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION REGARDING ANY SECURITIES.

ANY INVESTMENT DECISION MUST BE MADE EXCLUSIVELY ON THE BASIS OF THE CIRCULAR TO BE PUBLISHED BY THE COMPANY AND ANY SUPPLEMENT THERETO IN CONNECTION WITH ADMISSION.

The Board of SolGold (AIM code: SOLG) is pleased to announce that it is proposing to raise up to approximately £3.428 million (approximately £3.288 million net of expenses) through the issue of up to 114,290,838 Open Offer Shares through an Open Offer at an issue price of 3 pence per Open Offer Share.

The proceeds of the Open Offer of up to a maximum of approximately £3.288 million (net of expenses) will be utilised by the Company principally for further development of the Company's Cascabel project in Ecuador and for general working capital purposes. The Open Offer is on the basis of 1 new Ordinary Share for every 6 Existing Ordinary Shares.

Alan Martin, Managing Director and Chief Executive Officer of SolGold commented: "The SolGold Board would like to thank the shareholders for their continued support. As an exploration and development company, SolGold relies on external financing for the development of our projects and we felt it compelling to offer shareholders, whom have not been offered participation in previous placings, to participate in a new issue of equity. It is important to note that certain major shareholders have committed to their full Open Offer Entitlement and intend to apply for Excess Shares, with the total demand amounting to approximately £1.95 million of combined subscriptions. The Board is appreciative of this strong endorsement of the Cascabel Project in Ecuador. 2014 saw another year of solid progress at our flagship copper-gold porphyry project in Ecuador; Cascabel continues to deliver exceptional results, and the majority of these proceeds will be used to accelerate progress at the Cascabel project".

1.            Introduction

Earlier today, the Company announced that it proposes to raise up to approximately £3.428 million (approximately £3.288 million net of expenses) through the issue of up to 114,290,838 Open Offer Shares through the Open Offer at the Issue Price. The Board recognises and is grateful for the continued support it has received from Shareholders and is therefore pleased to give Qualifying Shareholders the opportunity to participate in the Open Offer.

The Open Offer provides Qualifying Shareholders with the opportunity to subscribe for Open Offer Shares at the Issue Price pro rata to their holdings of Existing Ordinary Shares as at the Record Date. The Open Offer is being made in accordance with the statutory pre-emption provisions contained in sections 561 and 562 of the Act.

Qualifying Shareholders may subscribe for Open Offer Shares on the basis of:

1 Open Offer Share for every 6 Ordinary Shares held on the Record Date.

Shareholders subscribing for their full Open Offer Entitlement under the Open Offer may also apply for Excess Shares through the Excess Application Facility subject to the terms and conditions set out in the Circular. Assuming full take-up under the Open Offer, the issue of the Open Offer Shares will raise gross proceeds of up to approximately £3.428 million for the Company.

A large proportion of the Company's Shareholders (approximately 45 per cent by number) are resident in Australia. Due to the legal restrictions on foreign companies making offers of securities in Australia the Company cannot make the Open Offer to all Australian Shareholders (other than Exempt Australian Shareholders) without either:

(a)          having to comply with the disclosure requirements under the Corporations Act; or

(b)          obtaining relief from ASIC to allow the Company to make the Open Offer to all Australian Shareholders (without having to comply with the disclosure requirements of the Corporations Act).

The costs and timing delays to comply with the disclosure requirements of the Corporations Act would be very onerous on the Company and would not be commensurate with the benefits of such an approach. In addition, the Company has applied to the ASIC for the ASIC Relief to make the Open Offer to all Australian Shareholders without having to comply with the disclosure requirements of the Corporations Act. However, ASIC has not granted the ASIC Relief.

Under the Corporations Act, the Company is able to make the Open Offer to those Australian Shareholders who qualify as Exempt Australian Shareholders. The Exempt Australian Shareholders are able to participate in the Open Offer on the same terms as applicable to UK Shareholders. Exempt Australian Shareholders who participate in the Open Offer can pay the Issue Price in Australian dollars.

The ability of Overseas Shareholders to accept the Open Offer is restricted in certain jurisdictions. Pursuant to section 562 of the Act, the Open Offer to Qualifying Shareholders who have no registered address within a member state of the European Economic Area and who have not supplied the Company with an address within a member state of the European Economic Area for the service of notices will be made by the Company publishing a notice in the London Gazette on 18 March 2015 stating where copies of the Circular and the Application Form may be inspected or obtained on personal application by or on behalf of Qualifying Shareholders.

The Open Offer Shares to be issued pursuant to the Open Offer are to be admitted to trading on AIM and Admission is expected to become effective and trading expected to commence at 8.00 a.m. on 10 April 2015.

The Issue Price represents a discount of approximately 18 per cent to the 30 day average VWAP of 3.66 pence per Existing Ordinary Share on 17 March 2015 (being the latest practicable date prior to this announcement). The Open Offer is not being underwritten and, accordingly, as set out below, the maximum proceeds under the Open Offer will be approximately £3.288 million (after expenses).

The net proceeds of the Open Offer (after commission and expenses) will be used principally for the further development of the Company's Cascabel project in Ecuador and for general working capital purposes.

2.            Reasons for the Open Offer

Background

The Company has continued to focus the majority of its efforts on the exploration of Cascabel, its flagship copper gold porphyry project in Ecuador. After securing the necessary environmental licence, SolGold has been able to carry out an active drilling programme and now holds an 85 per cent equity interest in Exploraciones Novomining S.A. ("ENSA"), an Ecuadorean registered company, which holds 100 per cent of the Cascabel concession in north-western Ecuador. Cornerstone Capital Resources Inc. ("Cornerstone") currently holds the remaining 15 per cent of ENSA.

The Cascabel project is located in north-western Ecuador in an under-explored northern section of the richly endowed Andean Copper Belt. The Alpala Prospect exhibits surface mineralisation and alteration patterns indicative of a porphyry copper gold system, and has a similar footprint to large porphyry systems around the world.

Since drilling commenced in September 2013, 9 holes have been completed. Drilling results from the Alpala Prospect to date have been highly encouraging and indicate the widespread nature of the mineralisation. Hole 10 commenced in January 2015 and on 11 March 2015 was at a depth of 954.90 metres encountering visible copper mineralisation from 765 metres to the current depth. Drilling to-date at Alpala covers approximately 15 per cent of the T1 Target area defined by geophysics from North West Alpala to South East Alpala.

The Company commissioned an Orion 3D Induced Polarisation ("3DIP") and magnetotelluric ("MT") survey on the Alpala grid which commenced in August 2014 and now completed in early September 2014. Final Orion 3DIP chargeability models and conductivity models were received in November 2014 from Quantec Geoscience for both the Alpala and the Aguinaga survey areas. First-pass integration of the Orion 3DIP geophysical data with surface soil geochemistry, alteration, the current mineralisation model at Central Alpala and recent surface geological mapping has validated and refined existing targets, and defined new targets.

The Orion 3DIP and MT, Magnetic Vector Inversion, geochemical and geological data collectively define a robust and high priority porphyry copper-gold target under the Southeast Alpala lithocap. The work undertaken during 2014 has reinforced our view that significant targets exist at Central Alpala, North West Alpala and South East Alpala. Other targets, including the Aguinaga and Rio Cachao area, have also been identified and the work undertaken to date suggests that the mineralisation encountered in holes 5, 7, 8 and 9 is only a small part of the broader Alpala target complex.

SolGold has a number of other projects in its portfolio, located in Australia and Solomon Islands. In Solomon Islands, a soil geochemical survey was completed at Kuma. The Australian and Solomon Islands projects will either be advanced or joint ventured.

December 2014 placing

The Company raised gross funds of £1 million in December 2014 by the issue of 33,591,828 new Ordinary Shares at a placing price of 3 pence per Ordinary Share. The proceeds of the Placing have been utilised for the continued exploration of the Company's Cascabel project in Ecuador including continuation of the drilling programme at the Alpala Prospect and related exploration costs, costs associated with the maintenance of the Company's tenements in Australia and Solomon Islands, and for working capital and general corporate purposes.

Structure of the Open Offer

The Directors considered the best way to structure the Company's proposed Open Offer, having regard to, inter alia, current market conditions and access to capital, the level of the Company's share price and the importance of allowing Shareholders to participate in further issues of equity. The Directors were keen to enable Qualifying Shareholders, who were not offered participation in previous placings, the right to participate in the Open Offer should they so wish. After considering these factors, the Directors concluded that the Open Offer was the most suitable option for the Company and its Shareholders as a whole.

The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising by acquiring Open Offer Shares pro rata to their current holdings of Ordinary Shares with the option for subscribing for Excess Shares pursuant to the Excess Application Facility. Subject to Qualifying Shareholders applying for their full Open Offer Entitlements, the maximum allocation of Excess Shares that a Qualifying Shareholder may then receive will be determined in accordance with the Excess Open Offer Formula.

The Issue Price represents a discount of approximately 18 per cent to the 30 day average VWAP of 3.66 pence per Existing Ordinary Share on 17 March 2015 (the latest practicable date prior to this announcement).

As at 17 March 2015 (being the latest practicable date prior to this announcement), the Company's Australian Shareholders constitute approximately 45 per cent of the total number of Shareholders in the Company and hold approximately 5.62 per cent of the total issued share capital of the Company. The Company applied to the ASIC for the ASIC Relief which would have allowed the Company to make the Open Offer to all of its Australian Shareholders without having to comply with the requirement under the Corporations Act in Australia to issue a prospectus. However ASIC has not granted the Company the ASIC Relief.

Without the ASIC Relief and under the Corporations Act, the Company is only able to make the Open Offer to those Australian Shareholders who qualify as Exempt Australian Shareholders. The Exempt Australian Shareholders are able to participate in the Open Offer on the same terms as applicable to Shareholders resident in the UK.

Reasons for the Open Offer and Use of Proceeds

As a mineral exploration company, SolGold, like many other natural resource exploration and development companies, does not generate cash flow. As such, it relies on external financing for the development of its projects in order to deliver its stated strategy.

The Directors are proposing the Open Offer to provide further capital for the Company in order to meet the costs of the work as set out in the table below. It is anticipated that the net proceeds of the Open Offer (assuming full take up under the Open Offer) of up to approximately £3.288 million (approximately A$6.362 million) would be utilised by the Company as follows:

Use of Proceeds	Sterling (million)	AUD (million)
SolGold general and administrative costs	0.731	1.414
Ecuador exploration & local corporate costs	2.517	4.868
Australia/Solomon Islands tenement management	0.04	0.08
Net Open Offer Proceeds	3.288	6.362

Future Funding Requirements & Working Capital

The gross proceeds of the Open Offer, assuming that the Open Offer is subscribed in full, are anticipated to amount to approximately £3.428 million. The Board believe that the net proceeds of the Open Offer will provide the necessary funding to enable the Company to continue with the development of its Cascabel project. However, the net proceeds of the Open Offer are insufficient to fully fund the entire development of the Company's projects. Accordingly, the Directors will continue to ensure that the Company remains appropriately funded, having identified and evaluated financing options, to fulfil its stated strategy.

3.            Australian Shareholders

Under Australian law, an entity which is listed on an "approved foreign market" such as the Official List of the London Stock Exchange can extend an entitlement offer by the entity to its Australian shareholders without having to comply with the disclosure requirements under the Corporations Act. AIM, while wholly owned and operated by the London Stock Exchange, is not an approved foreign market under Australian law.

A large proportion of the Company's Shareholders are resident in Australia. Due to the legal restrictions on foreign companies making offers of securities in Australia the Company cannot make the Open Offer to all Australian Shareholders (other than Exempt Australian Shareholders) without either:

(a)          having to comply with the disclosure requirements under the Corporations Act; or

(b)          obtaining relief from ASIC to allow the Company to make the Open Offer to all Australian Shareholders (without having to comply with the disclosure requirements of the Corporations Act).

The costs and timing delays to comply with the disclosure requirements of the Corporations Act would be very onerous on the Company and would not be commensurate with the benefits of such an approach. In addition, the Company applied to the ASIC for the ASIC Relief which would have allowed the Company to make the Open Offer to all Australian Shareholders without having to comply with the disclosure requirements of the Corporations Act. ASIC has not granted the Company the ASIC Relief.

Without the ASIC Relief, under the Corporations Act, the Company is only able to make the Open Offer to those Australian Shareholders who are Exempt Australian Shareholders. The Exempt Australian Shareholders are able to participate in the Open Offer which will be on the same terms as applicable to Shareholders resident in the UK.

Australian Shareholders who wish to participate in the Open Offer should ensure that they are Exempt Australian Shareholders by seeking financial or legal advice if they require assistance. Any Australian Shareholders who hold their Existing Ordinary Shares in a nominee account with a broker should contact their broker for advice and assistance.

4.            Related Parties and Open Offer Agreement

The Company has received irrevocable commitments from the Related Parties that they will take up their full Open Offer Entitlement as detailed in the table below. In addition, Nicholas Mather and DGR Global Limited have each confirmed that they intend to apply for Excess Shares of 9,080,072 and 10,913,760 respectively (subject to restrictions on allocations pursuant to the Excess Open Offer Formula).  Furthermore, the Directors have been advised by Tenstar Trading Limited ("Tenstar") that it intends to apply for 10,889,265 Excess Shares (subject to restrictions on allocations pursuant to the Excess Open Offer Formula).  The Directors believe that the above commitments to participate in the Open Offer demonstrate strong support for the Company's development of its projects as set out in this announcement.

Related Party Transaction

The participation of the Related Parties in the Open Offer constitutes in each case a related party transaction under the AIM Rules.

Tenstar is a related party by virtue of being a substantial shareholder in the Company holding 84,664,411 Existing Ordinary Shares representing 12.3 per cent of the issued share capital of the Company as at the date of this announcement.

Separately, Nicholas Mather is a director of the Company and is also a director of DGR Global Limited. Nicholas Mather and DGR Global Limited hold 65,519,570 Existing Ordinary Shares and 54,517,440 representing 9.6 per cent and 8.0 per cent of SolGold respectively.

The Independent Directors consider, having consulted with SP Angel, its nominated adviser, that the terms of the transaction are fair and reasonable insofar as its Shareholders are concerned.

The expected shareholdings of the Related Parties as at the date of this announcement and following the Open Offer are as follows:

Related Party	Number of Existing Ordinary Shares	Percentage of Existing Ordinary Shares	Number of Open Offer Shares to be applied for under Open Offer Entitlement	Number of Ordinary Shares held following Open Offer*
Tenstar Trading Limited	84,664,411	12.2	14,110,735	98,775,146
Nicholas Mather	65,519,570	9.6	10,919,928	76,439,498
DGR Global Limited	54,517,440	8.0	9,086,240	63,603,680

*              Assuming full take up by each Related Party of its Open Offer Entitlement but excluding any Excess Shares.

Open Offer Agreement

The Company and SP Angel have entered into the Open Offer Agreement in respect of the Open Offer. Under the terms of the Open Offer Agreement SP Angel has been appointed as agent of the Company to effect the Open Offer. Pursuant to the Open Offer Agreement, the Company has given certain warranties to SP Angel regarding, inter alia, the accuracy of information in the Circular and an indemnity in favour of SP Angel in respect of, inter alia, losses arising directly or indirectly out of the Open Offer.

The Open Offer Agreement is conditional, inter alia, on the Company complying with all of its obligations under the Open Offer Agreement. Under the Open Offer Agreement, the Company has agreed to pay a customary corporate finance fee and a commission to SP Angel in line with market practice, together with all costs and expenses and VAT thereon, where appropriate. SP Angel is entitled, in certain limited circumstances, to terminate the Open Offer Agreement prior to Admission and to the payment of outstanding expenses on such termination.

The Open Offer is conditional, inter alia, upon:

(i)           the Open Offer Agreement becoming or being declared unconditional in all respects and not having been terminated in accordance with its terms prior to Admission; and

(ii)          Admission becoming effective by no later than 8.00 a.m. on 10 April 2015 or such later time and/or date (being no later than 8.00 a.m. on 30 April 2015) as SP Angel and the Company may agree.

If any of the conditions are not satisfied, the Open Offer Shares will not be issued and all monies received pursuant to the Open Offer will be returned to Qualifying Shareholders as soon as possible thereafter.

5.            Director's Shareholdings

As at 17 March 2015 (being the latest practicable date prior to the date of this announcement), the Directors were or will immediately following completion of the Open Offer be interested, directly or indirectly, in the Company's issued share capital:

Director	Number of Existing Ordinary Shares	Percentage of Existing Ordinary Shares	Number of Open Offer Shares to be applied for under Open Offer Entitlement	Number of Ordinary Shares held following Open Offer*
Nicholas Mather	65,519,570	9.6	10,919,928	76,439,498
Alan Martin	9,288,324	1.4	0	9,288,324
Dr Robert Weinberg	2,672,986	0.4	445,498	3,118,484
Brian Moller	2,645,950	0.4	440,991	3,086,941
John Bovard	3,307,553	0.5	551,259	3,858,812

*              Assuming full take up by each Director of his Open Offer Entitlement but excluding any Excess Shares.

6.            The Open Offer

The Company is proposing to raise up to approximately £3.428 million (before expenses) pursuant to the Open Offer. The Open Offer is being made on a pre-emptive basis to Qualifying Shareholders, allowing all Qualifying Shareholders the opportunity to participate. The Open Offer is not being underwritten. The Open Offer is not conditional upon the level of applications made to subscribe under the Open Offer.

Subject to the fulfilment of the conditions set out below and in Part III of the Circular, Qualifying Shareholders are being given the opportunity to subscribe for up to 114,290,838 Open Offer Shares at a price of 3 pence/5.8 cents per Open Offer Share payable in full on application and free of expenses, pro rata to their holdings of Existing Ordinary Shares on the Record Date on the basis of:

1 Open Offer Share for every 6 Ordinary Shares

Qualifying Shareholders are also being given the opportunity, provided that they take up their Open Offer Entitlement in full, to apply for Excess Shares through the Excess Application Facility. The Open Offer Shares will be unconditionally allotted and issued on Admission. Exempt Australian Shareholders who take up their Open Offer Entitlement will also have the ability to subscribe for Excess Shares. The issue of Excess Shares is subject to availability and the maximum allocation of Excess Shares that Qualifying Shareholders may receive will be determined in accordance with the Excess Open Offer Formula.

Assuming full take-up under the Open Offer, the issue of the Open Offer Shares will raise gross proceeds of approximately £3.428 million for the Company. The Open Offer Shares will, upon issue, rank pari passu in all respects with the Existing Ordinary Shares.

Fractions of Open Offer Shares will not be allotted; instead, each Qualifying Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number. The fractional entitlements will be aggregated and used to satisfy applications under the Excess Application Facility. Applications under the Excess Application Facility will be rejected if, and to the extent that, the Company believes that acceptance would result in any Qualifying Shareholder, together with those acting in concert with it for the purposes of the City Code, holding 30 per cent or more of the issued share capital immediately following Admission.

Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating the Open Offer Entitlements.

It should be noted that the Open Offer is not a rights issue and the Application Form is not a document of title and cannot be traded. Unlike a rights issue, any Open Offer Shares not applied for under the Open Offer will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not take up their rights to subscribe under the Open Offer.

Excess Application Facility

The Excess Application Facility will enable Qualifying Shareholders, provided that they take up their Open Offer Entitlement in full, to apply for Excess Open Offer Entitlements.

Qualifying Non-CREST Shareholders who wish to apply for more than their Open Offer Entitlement should complete the relevant sections on the Application Form. Qualifying CREST Shareholders will have Excess CREST Open Offer Entitlements credited to their stock account in CREST and should refer to paragraph 4.2 of Part III of the Circular for information on how to apply for Excess Shares pursuant to the Excess Application Facility. Applications for Excess Open Offer Entitlements will be satisfied only and to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their Open Offer Entitlements.

The maximum allocation of Excess Shares that Qualifying Shareholders may receive will be determined in accordance with the Excess Open Offer Formula.

CREST

Application will be made for the Open Offer Entitlements and Excess Open Offer Entitlements in respect of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST at 8.00 a.m. on 19 March 2015. Applications through the means of the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

Applications

Qualifying Non-CREST Shareholders

Qualifying Non-CREST Shareholders will receive an Application Form with the Circular which sets out their entitlement to Open Offer Shares as shown by the number of Open Offer Entitlements allocated to them. Qualifying Non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded.

For Qualifying Non-CREST Shareholders (other than Exempt Australian Shareholders), completed Application Forms, accompanied by full payment, in the form of a cheque made payable to Computershare Investor Services PLC "A/C Payee Only", should be returned by post to:

The Receiving Agent: Computershare Investor Services PLC The Pavilions, Bridgwater Road, Bristol BS99 6AH United Kingdom or by hand (during normal business hours only) to Computershare Investor Services PLC The Pavilions, Bridgwater Road, Bristol BS13 8AE United Kingdom so as to arrive as soon as possible and in any event so as to be received no later than 11.00 a.m. on 8 April 2015.

For Exempt Australian Shareholders, completed Application Forms, accompanies by full payment, in the form of a cheque or banker's draft drawn in Australian currency on a branch of a bank or building society in Australia made payable to SolGold plc, should be returned to :

Karl Schlobohm, the Company Secretary, SolGold PLC, Open Offer, GPO Box 5621, Brisbane Qld 4001, Australia or by hand (during normal business hours only) to SolGold plc, Level 27, 111 Eagle Street, Brisbane Qld 4001, Australia so as to arrive no later than 11.00 a.m. Brisbane, Australia time on 8 April 2015.

Third party cheques, building society cheques and banker's drafts (other than from Exempt Australian Shareholders) will not be accepted.

Qualifying CREST Shareholders

Qualifying CREST Shareholders should note that although the Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. For Qualifying CREST Shareholders the relevant CREST instructions must have been settled by no later than 11.00 a.m. on 8 April 2015.

If applications are made for less than all of the Open Offer Shares available, then less than 114,290,838 Open Offer Shares will be issued and any outstanding Open Offer Entitlements will lapse.

Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in Part III of the Circular.

7.            Other information relating to the Open Offer

The Open Offer is conditional, inter alia, upon the Open Offer Agreement becoming or being declared unconditional in all respects and not having been terminated prior to Admission and Admission of the Open Offer Shares becoming effective by not later than 8.00 a.m. on 10 April 2015 or such later time and/or date (being no later than 8.00 a.m. on 30 April 2015) as the Company and SP Angel may agree.

Accordingly, if any of these conditions are not satisfied, or, if applicable, waived, then the Open Offer will not proceed.

The Open Offer will result in the issue of in total 114,290,838 Open Offer Shares, assuming full take up under the Open Offer (representing, in aggregate, approximately 14.29 per cent. of the Enlarged Share Capital assuming full take up under the Open Offer). The Open Offer Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares and therefore rank equally for all dividends or other distributions declared, made or paid after the date of issue of the Open Offer Shares. No temporary documents of title will be issued.

Qualifying Shareholders who do not take up any of their entitlements in respect of the Open Offer will experience dilution to their interests in the Company, dependent on the number of Open Offer Shares taken up by Qualifying Shareholders.

Qualifying Non-CREST Shareholders

If you are a Qualifying Non-CREST Shareholder you will receive an Application Form which gives details of your maximum entitlement under the Open Offer (as shown by the number of Open Offer Entitlements and Excess Open Offer Entitlements for which you may apply). If you wish to apply for Open Offer Shares (whether in respect of your Open Offer Entitlement or both your Open Offer Entitlement and any Excess Open Offer Entitlements), you should complete the Application Form in accordance with the procedure for application set out in paragraph 4.1 of Part III of the Circular and on the Application Form itself. The maximum allocation of Excess Shares that Qualifying Shareholders may receive will be determined in accordance with the Excess Open Offer Formula.

Qualifying CREST Shareholders

If you are a Qualifying CREST Shareholder, no Application Form accompanies the Circular and you will receive a credit to your appropriate stock account in CREST in respect of the Open Offer Entitlements representing your maximum entitlement under the Open Offer including your Open Offer Entitlements and your Excess CREST Open Offer Entitlements except (subject to certain exceptions) if you are an Overseas Shareholder who has a registered address in, or is a resident in or a citizen of a Restricted Jurisdiction. Applications by Qualifying CREST Shareholders for Excess Open Offer Entitlements in excess of their Open Offer Entitlements should be made in accordance with the procedures set out in paragraph 4.2 of Part III of the Circular, unless you are an Overseas Shareholder in which event, applications should be made in accordance with the procedures set out in paragraph 6 of Part III of the Circular. The maximum allocation of Excess Shares that Qualifying Shareholders may receive will be determined in accordance with the Excess Open Offer Formula.

The latest time for applications under the Open Offer to be received is 11.00 a.m. on 8 April 2015. The procedure for application and payment depends on whether, at the time at which application and payment is made, you have an Application Form in respect of your entitlement under the Open Offer or have Open Offer Entitlements credited to your stock account in CREST in respect of such entitlement. The procedures for application and payment are set out in Part III of the Circular.

Further details also appear in the Application Form which will be sent to Qualifying Non-CREST Shareholders. Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST Sponsors regarding the action to be taken in connection with the Circular and the Open Offer.

Exempt Australian Shareholders who wish to participate in the Open Offer should refer to the Application Form regarding the action to be taken in connection with the Circular and the Open Offer.

8.            Overseas Shareholders

In order to comply with the provisions of the Act, the offer of Open Offer Shares to Overseas Shareholders who are resident in a Restricted Jurisdiction will be made pursuant to section 562(3) of the Act by way of an appropriate notice in the London Gazette. The Open Offer is not being made to such Overseas Shareholders by means of sending the Circular or the Application Form to them, and nor will the stock accounts of such Overseas Shareholders who hold existing Ordinary Shares in CREST be credited with Open Offer Entitlement or Excess Open Offer Entitlement.

Information for Overseas Shareholders who have registered addresses outside the United Kingdom or who are citizens or residents of countries other than the United Kingdom appears in paragraph 6 of Part III of the Circular, which sets out the restrictions applicable to such persons. If you are an Overseas Shareholder, it is important that you pay particular attention to that section of the Circular.

9.            Additional Information

Your attention is drawn to the additional information set out in Parts II to IV (inclusive) of the Circular. The Circular will be posted to Qualifying Shareholders today, and will be available shortly and for a period of at least twelve months from the date on which it is issued on the Company's website http://www.solgold.com.au free of charge in accordance with the requirements of Rule 26 of the AIM Rules.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Record Date for entitlement to participate in the Open Offer	5.00 p.m. on 17 March 2015
Announcement of the Open Offer	7.30 a.m. on 18 March 2015
Publication and posting date of the Circular and the Application  Forms, to Qualifying Non-CREST Shareholders in the United Kingdom and the Exempt Australian Shareholders	18 March 2015
Posting of the London Gazette Notice	18 March 2015
Ex-Entitlement Date for the Open Offer	8.00 a.m. on 18 March 2015
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts in CREST of Qualifying CREST  Shareholders	As soon as possible after 8.00 a.m. on 19 March 2015
Recommended latest time for requesting withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST	4.30 p.m. on 26 March 2015
Latest time for depositing Open Offer Entitlements and Excess CREST Open Offer Entitlements into CREST	3.00 p.m. on 30 March 2015
Latest time and date for splitting of Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 2 April 2015
Latest time and date for receipt of completed Application Forms, and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)	11.00 a.m. on 8 April 2015
Expected date of announcement of results of the Open Offer	8.00 a.m. on 9 April 2015
Admission effective and trading expected to commence in the Open Offer Shares	8.00 a.m. on 10 April 2015
CREST members' accounts credited in respect of the Open Offer Shares in uncertificated form	As soon as possible after 8.00 a.m. on 10 April 2015
Share certificates in respect of the Open Offer Shares expected to be despatched by no later than	24 April 2015

Notes

1.             If you have any queries on the procedures for application under the Open Offer, you should contact either (i) in the UK, the Receiving Agent, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6AH United Kingdom or telephone Computershare Investor Services PLC on [phone] or (ii) in Australia, the Company Secretary, Karl Schlobohm, GPO Box 5261, Brisbane, QLD 4001, Australia on [phone] (if calling within Australia). Calls to such numbers are charged at your service provider's standard rate. Calls from overseas or via mobile phones will cost considerably more. Lines are open in the UK from 8.00 a.m. to 4.30 p.m. Monday to Friday and in Australia from 8.30 a.m. to 4.30 p.m. Neither the Computershare helpline nor the Company Secretary can provide advice on the merits of the Open Offer nor give any financial, legal or tax advice.

2.             The above timetable is subject to change and the Company reserves the right to vary the timetable. If any of the details contained in the timetable above should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service.

3.             Unless otherwise specified, all times are London times.

OPEN OFFER STATISTICS

Number of Ordinary Shares in issue on the Record Date	685,745,030
Maximum number of Open Offer Shares to be issued under the Open Offer*	114,290,838
Number of Ordinary Shares in issue following the Open Offer*	800,035,868
Percentage of Enlarged Share Capital represented by the Open Offer Shares to be issued pursuant to the Open Offer*	14.29
Basis of the Open Offer	1 Open Offer Share for every 6 Ordinary Shares held on the Record Date
Issue Price**	3 pence/5.8 cents
Gross proceeds of the Open Offer*	£3.428 million
Approximate market capitalisation of the Company at the Issue Price following Admission*	£24 million
ISIN of the Existing Ordinary Shares	GB00B0WD0R35
ISIN of the Open Offer Entitlements	GB00BW9PBN96
ISIN of the Excess Open Offer Entitlements	GB00BW9PBP11
Tradeable Instrument Display Mnemonic	SOLG

*On the assumption that the Open Offer is taken up in full by Qualifying Shareholders.

**Based on the Exchange Rate.

DEFINITIONS

The following definitions apply throughout this announcement, unless the context otherwise requires:

"Access Agreements"	the agreements with tribal chiefs and landowners in Solomon Islands necessary to enable the Company to gain access to the Tenements;
"Act"	the Companies Act 2006 (as amended from time to time);
"Admission"	the admission of the Open Offer Shares to trading on AIM becoming effective in accordance with the AIM Rules;
"AIM"	the AIM Market of London Stock Exchange plc;
"AIM Rules" or "AIM Rules for Companies"	the rules applicable to companies whose securities are traded on AIM, together with the guidance note for mining and oil and gas companies, as published and amended by the London Stock Exchange from time to time;
"AIM Rules for Nominated Advisers"	the rules for nominated advisers to AIM companies, as published and amended from time to time by the London Stock Exchange;
"Applicant"	a Qualifying Shareholder or a person entitled by virtue of a bona fide market claim who lodges an Application Form or delivers a relevant CREST instruction under the Open Offer;
"Application Form"	an application form enclosed with the Circular for use by Qualifying Non-CREST Shareholders in connection with the Open Offer;
"Articles"	the articles of association of the Company as at the date of this announcement;
"ASIC"	Australian Securities and Investments Commission;
"ASIC Relief"	the application by the Company to ASIC for approval of AIM as an approved foreign market as described in paragraph 3 of Part I of the Circular;
"Australian Shareholders"	Shareholders with registered addresses in Australia on the Record Date;
"Business Day"	any day on which banks in the City of London are normally open for ordinary business;
"Certificated" or "certificated form"	in relation to an Ordinary Share, title to which is recorded in the relevant register of Ordinary Shares as being held in certificated from (that is, not in CREST);
"City Code"	the City Code on Takeovers and Mergers in the United Kingdom;
"Circular"	the circular detailing the terms and conditions of the Open Offer dated 18 March 2015;
"Company" or "SolGold"	SolGold plc, a company registered in England and Wales under the Companies Act 1985 with registered number 05449516;
"Corporations Act"	the Corporations Act 2001 (Cth) of Australia;
"CREST"	the relevant system (as defined in the CREST Regulations) for the paperless settlement of trades and the holding of uncertificated securities operated by Euroclear UK & Ireland in accordance with the CREST Regulations;
"CREST Manual"	the rules governing the operation of CREST, consisting of the CREST reference manual, CREST international manual, CREST central counterparty service manual, CREST rules, Registrars service standards, settlement discipline rules, CREST courier and sorting services manual, daily timetable, CREST application Procedures and CREST glossary of terms (all as defined in the CREST glossary of terms promulgated by Euroclear on 15 July 1996, as amended) as published by Euroclear;
"CREST member"	a person who has been admitted by Euroclear UK & Ireland as a system-member (as defined in the CREST Regulations);
"CREST member account ID"	the identification code or number attached to a member account in CREST;
"CREST participant"	a person who is, in relation to CREST, a system-participant (as defined in the CREST Regulations);
"CREST payment"	has the meaning given in the CREST Manual issued by Euroclear UK & Ireland;
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001/3755) (as amended);
"CREST Sponsor"	a CREST participant admitted to CREST as a CREST sponsor;
"CREST sponsored member"	a CREST member admitted to CREST as a sponsored member (which includes all CREST personal members);
"Director of Mines"	the Chief Geologist who is appointed director pursuant to Section 5 of the Mining Act;
"Directors" or "Board"	the directors of the Company as at the date of this announcement;
"Disclosure and Transparency Rules"	the disclosure and transparency rules of the FCA;
"Enlarged Share Capital"	the issued ordinary share capital of the Company immediately following Admission comprising the Existing Ordinary Shares and the Open Offer Shares;
"Euroclear UK & Ireland"	Euroclear UK & Ireland Limited, the operator of CREST;
"Excess Application Facility"	the arrangement pursuant to which Qualifying Shareholders may apply for any number of Open Offer Shares in excess of their Open Offer Entitlement, provided that they have agreed to take up their Open Offer Entitlement in full;
"Excess CREST Open Offer Entitlements"	in respect of each Qualifying CREST Shareholder, the entitlement to apply for Open Offer Shares in addition to his Open Offer Entitlement credited to his stock account in CREST, pursuant to the Excess Application Facility which is conditional on him taking up his Open Offer Entitlement in full and which may be subject to scaling back in accordance with the Excess Open Offer Formula;
"Excess Open Offer Entitlements"	an entitlement for each Qualifying non-CREST Shareholder to apply to subscribe for Open Offer Shares in addition to his Open Offer Entitlement pursuant to the Excess Application Facility which is conditional on him taking up his Open Offer Entitlement in full and which may be subject to scaling back in accordance with the Excess Open Offer Formula;
"Excess Open Offer Formula"	the formula to be used by the Company to determine the maximum number of Excess Shares that can be applied for by a Qualifying Shareholder pursuant to the Excess Application Facility and under the terms of the Open Offer which is as follows: A ------- x C B where: A = the number of Open Offer Shares comprising the relevant Qualifying Shareholder's Open Offer Entitlement; B = the aggregate number of Open Offer Shares applied for under the Open Offer Entitlement (excluding the Excess Open Offer Entitlements); C = the aggregate number of Excess Shares;
"Excess Shares"	the Open Offer Shares in addition to their Open Offer Entitlement for which Qualifying Shareholders may apply under the Excess Application Facility;
"Exchange Rate"	GBP 1: AUD 1.934;
"Exempt Australian Shareholders"	those Shareholders with registered addresses in Australia to whom the Open Offer can be made under an exemption in Sections 708(8), (10), (11) and (12) of the Corporations Act (further details of which are set out in paragraph 6.5 of Part III);
"Ex-Entitlement Date"	the date on which the Existing Ordinary Shares are marked "ex" for entitlement under the Open Offer by the London Stock Exchange;
"Existing Ordinary Shares"	the 685,745,030 Ordinary Shares in issue at the date of this announcement;
"FCA"	the Financial Conduct Authority of the United Kingdom;
"FSMA"	the Financial Services and Markets Act 2000, as amended;
"Group"	the Company, its subsidiaries and subsidiary undertakings;
"Independent Directors"	those directors of the Company being Alan Martin, Dr Robert Weinberg and John Bovard who for the purposes of AIM Rule 13 are considered independent and who are eligible to provide a fair and reasonable statement in respect of the terms of the Open Offer in which the Related Parties will be participating alongside other Shareholders;
"ISIN"	International Securities Identification Number;
"Issue Price"	3 pence or 5.8 cents per Open Offer Share;
"London Stock Exchange"	London Stock Exchange plc;
"Member Account ID"	the identification code or number attached to any member account in CREST;
"Mining Act"	the 1996 Mines and Minerals Act (Cap. 42) of Solomon Islands (as amended from time to time);
"Money Laundering Regulations"	the Money Laundering Regulations 2007, as amended;
"Official List"	the Official List of the United Kingdom Listing Authority;
"Open Offer"	the offer to Qualifying Shareholders, constituting an invitation to apply for the Open Offer Shares at the Issue Price on the terms and subject to the conditions set out in the Circular and, in the case of Qualifying Non-CREST Shareholders, in the Application Form;
"Open Offer Agreement"	the open offer agreement dated 18 March 2015 between the Company and SP Angel relating to the Open Offer;
"Open Offer Entitlement"	the pro rata basic entitlement under the Open Offer for Qualifying Shareholders to apply for 1 Open Offer Share for every 6 Ordinary Shares held by them on the Record Date;
"Open Offer Shares"	up to 114,290,838 new Ordinary Shares to be issued pursuant to the Open Offer;
"Ordinary Shares"	ordinary shares of 1p each in the capital of the Company;
"Overseas Shareholders"	Shareholders who are resident in or a citizen or national of any country outside the United Kingdom;
"PL"	Solomon Islands Prospecting Licence, the terms of which are governed by the Mining Act;
"Prospectus Rules"	the rules made by the FCA under Part VI of FSMA in relation to offers of transferable securities to the public and admission of transferable securities to trading on a regulated market;
"Qualifying CREST Shareholders"	Qualifying Shareholders holding Ordinary Shares in uncertificated form at the close of business on the Record Date;
"Qualifying Non-CREST Qualifying Shareholders"	Shareholders holding Ordinary Shares in certificated form at the close of business on the Record Date;
"Qualifying Shareholders"	Shareholders whose Ordinary Shares are on the register of members of the Company on the Record Date with the exclusion (subject to certain exemptions) of persons with a registered address or located or resident in the Restricted Jurisdictions;
"Receiving Agent"	Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6AH, United Kingdom;
"Record Date"	17 March 2015;
"Registrars"	Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6AH, United Kingdom;
"Related Parties"	each of Tenstar Trading Limited, DGR Global Limited and Nicholas Mather for the purposes of AIM Rule 13;
"Regulatory Information Service" or "RIS"	a regulatory information service as defined by the AIM Rules;
"Relevant Jurisdictions"	the United Kingdom and Australia;
"Restricted Jurisdiction"	each and any of Australia (to the extent Shareholders are not Exempt Australian Shareholders), Canada, France, Japan, the Republic of Ireland, United States and the Republic of South Africa and any other jurisdiction where the extension or availability of the Open Offer would breach any applicable law or regulations;
"SEC"	the US Securities Exchange Commission;
"Securities Act"	the US Securities Act of 1933, as amended;
"Shareholders"	holders of Ordinary Shares;
"SP Angel"	SP Angel Corporate Finance LLP, authorised and regulated by the Financial Conduct Authority, engaged to act as nominated adviser and joint broker to the Company;
"stock account"	an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited;
"subsidiary"	a subsidiary as defined in section 1159 of the Act and a subsidiary undertaking as defined in section 1162 of the Act;
"Tenements"	the interests in mining tenements held by the Company located in Ecuador, Solomon Islands and Australia;
"Uncertificated" or "uncertificated form"	recorded on the relevant register or other record of the share or other security confirmed as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by way of CREST;
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland;
"UK Listing Authority" or "UKLA"	the UK Listing Authority, being the FCA acting as competent authority for the purposes of Part V of the FSMA;
"USE"	unmatched stock event;
"United States" or "US"	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia;
"USD"	the lawful currency of the US;
"US Securities Act"	the US Securities Act of 1933 (as amended);
"VWAP"	volume weighted average price;
"£" or "GBP"	Pounds sterling, the lawful currency of the United Kingdom; and
"AUD" or "A$"	Australian dollars, the lawful currency of Australia.

About Cascabel

SolGold owns 85% of Exploraciones Novomining S.A. ("ENSA") and 21.1m shares (approximately 11%) in TSX-V-listed Cornerstone Capital Resources (Cornerstone).  ENSA is an Ecuadorean registered company, which holds 100% of the Cascabel concession in northern Ecuador.  Cornerstone holds the remaining 15% of ENSA.

The Cascabel project is located in northwestern Ecuador in an under-explored northern section of the richly endowed Andean Copper Belt.  World class deposits located within this belt include the 982 million tonnes at 0.89% Cu Junin copper project located some 60km to the southwest of Cascabel, the 3.3 billion tonnes at 0.36% Cu Cobre Panama deposit located to the north in Panama and the 905 million tonnes at 0.92 g/t Au La Colosa porphyry deposit located to the north in Colombia, containing 26 million ounces of gold.  The Alpala Prospect exhibits surface mineralisation and alteration patterns indicative of a porphyry copper gold system and has a similar footprint to large porphyry systems around the world.

Qualified Person:

Information in this report relating to the exploration results is based on data reviewed by Dr Bruce Rohrlach (BSc (Hons), PhD), the GM Exploration of the Company. Dr Rohrlach is a Member of the Australasian Institute of Mining and Metallurgy who has 27 years' experience in mineral exploration and is a Qualified Person under the AIM Rules. Dr Rohrlach consents to the inclusion of the information in the form and context in which it appears.

By order of the Board

Karl Schlobohm

Company Secretary

Contacts:

Mr Alan Martin

SolGold Plc (CEO and Managing Director)                                                    Tel: [phone]

[e-mail]

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/Ms Katy Birkin                                                                  Tel: [phone]

SP Angel Corporate Finance LLP (NOMAD and Broker)

[e-mail]  

Richard Greenfield/ Alexandra Carse                                                         Tel: [phone]

GMP Securities Europe LLP (Joint Broker)

[e-mail]

Mr Dominic Barretto / Ms Anna Legge                                                     Tel: [phone]

Yellow Jersey PR Limited (Financial PR)

[e-mail]  

NOTES TO EDITORS

SolGold's exploration projects are located in northern Ecuador, Australia, and the Solomon Islands. In Ecuador, they consist of a joint venture with Cornerstone Capital Resources Inc. on the Cascabel copper-gold project.  In Australia, SolGold holds 100% of the Rannes, Mt Perry, Cracow West and Normanby Projects, all in southeast Queensland. In the Solomon Islands they comprise the Fauro Project (located on Fauro Island), and the Lower Koloula, Malukuna and Kuma licenses, which are located on Guadalcanal. 

The Cascabel copper-gold project is located approximately 180 km by sealed road north of Ecuador's capital, Quito, 20 km south of the Colombian border, and 75 km inland from the coastal city of San Lorenzo. At the Rannes project SolGold has announced indicated and inferred resources of 18.7 million tonnes at 0.9 g/t gold equivalent (gold + silver) for 550,146 ounces of gold equivalent (296,657 ounces of gold and 10,137,736 ounces of silver; see announcement dated 23 May 2012 for details of the resource statement and gold equivalent ratios).  The Rannes project is currently under review.

In the Solomon Islands, a soil geochemical survey and 3D modelling of magnetic data has been approved at Kuma.

SolGold's objective is to create substantial shareholder value by discovering and defining world-class copper-gold deposits.

SolGold's Board includes accomplished professionals with strong track records in the areas of exploration, mine development, investment, finance and law.  Board and Management have significantly vested interests in the Company, holding approximately 14% of its issued share capital.

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 685,745,030 fully paid ordinary shares, 12,820,000 options exercisable at 50p, 12,730,000 options exercisable at 28p and 9,730,000 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.

 

END

 

 

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