Proposed disposal, capital reorganisation & GM

RNS Number : 6281P

Rose Petroleum PLC

01 September 2017

 

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

1 September 2017

Rose Petroleum plc

("Rose", the "Company" or the "Group")

Proposed disposal, capital reorganisation and notice of general meeting

Rose (AIM: ROSE), the AIM quoted natural resources business, announces that the Company is today publishing and posting to Shareholders a circular to convene a General Meeting.

The Company is seeking shareholder approval for the proposed disposal of the Company's mineral processing mill operation in San Dieguito de Arriba, Mexico and its associated assets, licenses and agreements (together, the "SDA Mill") to Magellan Gold Corporation (OTCQB: MAGE) ("Magellan") for a total consideration of US$1.5 million, payable as US$1.0 million in cash (less a US$100,000 option payment already received) and US$500,000 in restricted common stock (shares) in Magellan. The Disposal will constitute a fundamental change of business under the AIM Rules and is therefore subject to the approval of Shareholders at the General Meeting. The Disposal is also subject, inter alia, to the relevant parties entering into a stock purchase agreement (the "SPA"). The SPA is expected to be entered into imminently and in any event ahead of the General Meeting. A further announcement will be made when appropriate.

Further, the Company announced on 22 August 2017 that it had received all necessary final approvals in the permitting process for its proposed 3D seismic survey on its oil and gas exploration acreage in the Paradox Basin, Utah (the "Paradox Acreage"). The Company has subsequently announced the completion of the seismic shoot design optimisation and the commencement of field work in the Paradox Basin. As previously announced, the Company is in dialogue with a number of third parties regarding additional potential funding options for both the 3D seismic survey and the subsequent drilling programme. This may involve an equity fundraise and so the Company is seeking shareholder authority to increase the Company's share authorities in order to provide the Company with the flexibility to act quickly in the case of an opportunity to conduct an equity fundraising, should this be required.

The Company is also proposing to undertake a capital reorganisation, further details of which are set out below.

The general meeting will be held at 11.00 a.m. on 18 September 2017 at the offices of Allenby Capital Limited, 5 St. Helen's Place, London EC3A 6AB. 

The above summary should be read in conjunction with the full text of this announcement and the circular (which includes a notice convening the General Meeting), which is being posted to Shareholders today and will also be made available to view later today on the Company's website, www.rosepetroleum.com.  Extracts from the circular are set out below.

Defined terms used in this announcement have the meaning as set out at the end of this announcement and as in the circular.

Change of registered office

The Company also confirms that on 26 November 2016 its registered office was changed to 20-22 Wenlock Road, London, N1 7GU.

Enquiries:

Matthew Idiens (CEO) Chris Eadie (CFO)	Rose Petroleum plc	Tel: [phone] Tel: [phone]
Jeremy Porter / James Reeve / Liz	Allenby Capital Limited	Tel: [phone]
Kirchner
James Pope / Ben Turner	Turner Pope Investments	Tel: [phone]

Extracts from the Circular

(References to pages or paragraphs below refer to the relevant pages or paragraphs of the circular. References to 'this document' refer to the circular)

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Publication and posting to Shareholders of this document	1 September 2017
Latest time and date for receipt of Forms of Proxy	11.00 a.m. on 16 September 2017
General Meeting	11.00 a.m. on 18 September 2017
Latest time and date for dealings in Existing Ordinary Shares	4.30 p.m. on 18 September 2017
Record Date	6.00 p.m. on 18 September 2017
Admission effective and commencement of dealings in the New Ordinary Shares	8.00 a.m. on 19 September 2017
CREST accounts credited with the New Ordinary Shares in uncertificated form	19 September 2017
Despatch of definitive certificates for New Ordinary Shares (in certificated form)	On or around 3 October 2017

Notes:

(1)  References to times in this document are to London time (unless otherwise stated).

(2)  The dates set out in the timetable above may be subject to change.

(3)  If any of the above times or dates should change, the revised times and/or dates will be notified by an announcement to a regulatory information service.

STATISTICS RELATING TO THE CAPITAL REORGANISATION

Existing Ordinary Shares in issue at the date of this document	3,764,470,841
Existing Deferred Shares in issue at the date of this document	190,108,108
Conversion ratio of Existing Ordinary Shares to Consolidated Shares	100 Existing Ordinary Shares: one Consolidated Share
Total expected number of New Ordinary Shares in issue following the Capital Reorganisation	37,644,709
Total expected number of New Deferred Shares in issue following the Capital Reorganisation	227,752,817
ISIN code for the New Ordinary Shares	GB00BF44KY60
SEDOL for the New Ordinary Shares	BF44KY6

Proposed disposal of the SDA Mill, Capital Reorganisation and Notice of General Meeting

1.             Introduction

The Company announced on 16 August 2017 that it had received from Magellan the irrevocable commitment letters for funding in respect of the proposed disposal of the SDA Mill in Mexico. Total proceeds from the disposal of the SDA Mill will be US$1.5m, to be paid US$1.0m in cash and US$500,000 in restricted common stock (shares) in Magellan. The Disposal is deemed (under AIM Rule 15) to be a disposal resulting in a fundamental change of business and is therefore conditional on the approval of Shareholders at the General Meeting. In addition to be being conditional on approval by Shareholders, the Disposal is subject to the Company, Vane UK and Magellan Acquisition Corp entering into the SPA and all conditions of the SPA being satisfied or waived. The SPA is anticipated to be entered into on substantially the same terms as set out in this document and the MOU. The SPA is expected to be entered into imminently and in any event ahead of the GM. A further announcement will be made when appropriate.

Further, the Company announced on 22 August 2017 that it had received all necessary final approvals in the permitting process for its proposed 3D seismic survey on its oil and gas exploration acreage on its Paradox Acreage. The Company can earn a 75% interest in circa. 90,000 gross acres in the Paradox Basin, within which there is the potential for 1.1 billion barrels of oil and 2.2 TCF of gas, according to the Ryder Scott Company, LP report dated 30^th April 2014. The Paradox Basin is an unconventional oil and gas basin that targets the Paradox Clastics and the leadville Limestone, a conventional play directly below the Paradox Clastics. The Group has an agreement with Rockies Standard Oil Company LLC ("RSOC") to earn a 75% working interest in the leasehold of the Paradox Acreage for a carry of US$5.5 million. The proceeds of the Disposal will be used for the 3D seismic shoot in the Paradox Acreage, as this is now the main focus of the Company.

As previously announced, and further to the Disposal, the Company is in dialogue with a number of third parties regarding additional potential funding options for both the 3D seismic survey and the subsequent drilling programme. This may involve a fundraise via the issue of Ordinary Shares and so the Company is seeking the Board Authority in order to provide the Company with the flexibility to act quickly in the case of an opportunity to conduct an equity fundraising, should this be required.

The Company is also proposing to conduct the Capital Reorganisation in conjunction with the proposals to increase the Company's share authorities and approve the Disposal. The Company currently has 3,764,470,841 Ordinary Shares in issue and as at 31 August 2017, being the last date prior to the publication of this document, the closing price of the Existing Ordinary Shares was 0.105p.  As the Company's current share price is close to the nominal value, the Directors consider it prudent to undertake the Capital Reorganisation. 

The purpose of this document is to explain the background to and reasons for the Proposals, to explain why the Board considers the Proposals to be in the best interests of the Company and the Shareholders as a whole and why the Directors recommend that you vote in favour of the Resolutions to be proposed at the GM, notice of which is set out at the end of this document.

2.             Background to and reasons for the Disposal

Rose initially announced a potential disposal of its mineral processing mill operation in San Dieguito de Arriba, State of Nayarit, Mexico and its associated assets, licenses and agreements to Magellan on 6 March 2017. 

The Group has operated the SDA Mill for ten years and it had previously carried out mill production for the Group's previous gold and silver mining operations at the Mina Charay mine in Mexico ("Mina Charay"). A decision was taken to cease operations at Mina Charay in December 2015 due to high transportation costs and depressed commodity prices. As a result, the SDA Mill was instead utilised for custom milling of third party ore whilst the Company aimed to identify joint-venture opportunities for the SDA Mill that would generate better returns than custom milling. The focus of these efforts was to identify advanced-stage projects located in the vicinity of the SDA Mill and which met several criteria including minimum production levels.  With the focus now back on the Paradox Acreage, the Board has determined that the proposed disposal of the SDA Mill is the best course of action for the asset.  Operations at the mill remain on hold pending completion of the Disposal.

The Board believes that the current outlook for US energy is extremely encouraging, and therefore a strategic focus on the Paradox Acreage is currently the optimal way to deliver near-term value to Shareholders. As such, the Board intends to allocate funds from the proposed disposal of the SDA Mill operation towards the cost of the 3D seismic survey on the Paradox Acreage.

Summary terms of the MOU

The total consideration payable by Magellan for the SDA Mill operation under the MOU is US$1.5 million, payable as US$1.0 million in cash (less a US$100,000 option payment already received) and US$500,000 in restricted common stock (shares) in Magellan. The Company announced on 16 August 2017 that it had received from Magellan the irrevocable commitment letters totalling US$900,000 required to fund the purchase. Magellan has also reimbursed Rose for the employee and maintenance costs of the SDA mill of approximately US$25,000 per month for August and September 2017. As announced on 6March 2017, the Company also received from Magellan a non-refundable payment of US$50,000 for entering into the original MOU.

Should the proposed disposal not complete due to it not being approved by the Company's Shareholders, Rose will be required to reimburse Magellan the US$100,000 option payment already received. This payment would be payable in cash or Ordinary Shares at the Company's discretion.

In addition to be being conditional on approval by the Shareholders, the Disposal is subject to the Company, Vane UK and Magellan Acquisition Corp entering into the SPA. The SPA is anticipated to be entered into on substantially the same terms as set out in the MOU as described above. The SPA is

expected to be subject to a number of conditions, including, in addition to usual completion actions, the completion of satisfactory due diligence, Magellan completing an audit of the SDA Mill's financial

statements, and the finalisation of the Mexican corporate restructuring to facilitate the Disposal. Subject to Shareholder approval, the Disposal is expected to be completed by the end of November 2017. The SPA is expected to be entered into imminently and in any event ahead of the GM. A further announcement will be made as appropriate.

Fundamental Change of Business under AIM Rule 15

The Disposal will constitute a fundamental change of business under the AIM Rules and is therefore subject to the approval of Shareholders at the General Meeting. As the Disposal will not result in the Company divesting of all, or substantially all, of its trading business, activities or assets, the Company will not, following the completion of the Disposal, be deemed to become an AIM Rule 15 Cash Shell under the AIM Rules.

3.             Strategy of the Group following the Disposal

The Board is committed to unlocking shareholder value from the Paradox Acreage and so its current strategy is to focus on completing the planned 3D seismic survey to identify drill targets through Q4 2017/Q1 2018 and then progressing the drill programme permitting process and the subsequent drilling programme in H2 2018.  

The permits and approvals for the seismic survey cover an area of 61 square miles within the Paradox Acreage. The Company announced on 31 August 2017 that surveying contractors have been engaged for the initial work programme on the 3D seismic survey and are expected to commence work within days. The completion of the optimisation and design of the state of the art 3D seismic shoot has resulted in the shoot being focussed on a 40 square mile area encompassing Rose's acreage within the permitted area, thus reducing costs and maximising the efficiency of the shoot. The Paradox Basin is a natural fracture driven basin, meaning that the drilling process targets "fracture swarms" to enable the natural fracturing to provide the commercial flow rates so "hydraulic fracking" is not usually required. The 3D seismic survey is an essential part of identifying these fracture swarms and therefore an essential path to unlocking the value of the Paradox Acreage. The Company has assembled a highly experienced technical and operational team with specific Paradox Basin seismic and drilling experience to assist in the completion of the seismic survey and the subsequent drilling programmes. The team consists of two geophysicists who have both previously worked for Fidelity Exploration and Production Company on their Paradox seismic shoots and subsequent drilling programmes. Dawson Geophysical Inc. has been contracted to deliver the turn key Seismic shoot and has been pre-paid and instructed to commence the initial survey work segment which is expected to commence imminently. It is anticipated that it will take a period of six weeks to lay out the various mapping points ahead of drilling the shot holes.   

The Paradox Basin has been actively exploited by Fidelity Exploration and Production ("Fidelity"), mainly in the Cane Creek Formation, southeast of the Group's main group Paradox lease blocks. Fidelity has been the most active operator in the Paradox Basin over the past two years with average Q1 2015 production of 2,100 barrels of oil equivalent per day ("boepd"). In addition to Fidelity's success, multiple wells in the area of the Group's leases have produced oil and gas to surface from various formations, and it is a combination of all these factors that led the Board to the conclusion that it should focus on the Group's Paradox Basin acreage. Consistent with Fidelity, the strategy is to shoot the seismic lines that will assist in identifying drilling targets for the Group's first wells in the Paradox.

Should the Disposal be approved by Shareholders at the GM, the Company will retain a number of other assets and interests in Mexico, Cuba and the USA, the details and status of which are contained in the Company's annual report for the year ended 31 December 2016.

4.             Proposed renewal of share authorities

As previously announced, the Company is in dialogue with a number of third parties regarding potential funding options for both the 3D seismic survey and the subsequent drilling programme. This may involve a fundraise via the issue of Ordinary Shares in the Company and so the Company is seeking the Board Authority in order to provide the Company with the flexibility to act quickly in the case of an opportunity to conduct an equity fundraising. The Board Authority comprises:

i.  an ordinary resolution to grant authority to the Directors pursuant to and for the purposes of Section 551 of the Act, to allot shares or grant rights to subscribe for or to convert any security into shares in the Company with an aggregate nominal amount of up to £80,000.00, representing 212% of the Consolidated Shares; and

ii.                a special resolution to empower the Directors pursuant to Section 570 of the Act to allot equity securities (as defined in Section 560 of the Act) pursuant to the authority conferred by paragraph (i) above as if Section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities up to an aggregate nominal amount of up to £60,000.00, representing 159% of the Consolidated Shares.

5.             Background to and reasons for the proposed Capital Reorganisation

The Company currently has in issue 3,764,470,841 Ordinary Shares and as at 31 August 2017, being the last date prior to the publication of this document, the closing price of the Company's Existing Ordinary Shares was 0.105p.  As the Company's current share price is close to the nominal value, the Directors consider it prudent to undertake the Capital Reorganisation.  The Directors also consider that it would be more appropriate for the Company to have a smaller number of Ordinary Shares in issue and a higher share price, in line with other comparable AIM companies. The Board also believes that the Capital Reorganisation should improve the liquidity and marketability of the Company's shares to a range of investors, including institutional investors.

The proposed Capital Reorganisation will comprise:

·      the consolidation of every 100 Existing Ordinary Shares of 0.1p each into one Consolidated Share of 10p each; and

·      the immediate sub-division of each Consolidated Share into one New Ordinary Share of 0.1p each and one New Deferred Share of 9.9p each.

Consolidation

Every 100 Existing Ordinary Shares will be consolidated into one Consolidated Share.

In anticipation of the Resolutions being passed by the Shareholders, the Company will immediately prior to the GM, issue such number of additional Ordinary Shares as will result in the total number of Ordinary Shares in issue being exactly divisible by 100.

Assuming no Ordinary Shares are issued between the date of this document and immediately before the GM, this will result in 59 additional Ordinary Shares being issued and will create 37,644,709 Consolidated Shares (subject to any revision to the Company's issued share capital between the date of this document and the Record Date).

These 59 additional Ordinary Shares would be issued to the Company Secretary. Since these additional shares would only represent a fraction of a New Ordinary Share, this fraction would be sold pursuant to the arrangements for fractional entitlements described below.

As all of the Existing Ordinary Shares are proposed to be consolidated, the proportion of issued ordinary shareholdings in the Company held by each Shareholder immediately before and immediately after the Consolidation will, save for fractional entitlements, remain unchanged.

In the event the number of Existing Ordinary Shares attributed to a Shareholder is not exactly divisible by 100, the Consolidation will generate an entitlement to a fraction of a Consolidated Share. On the Subdivision, such fractional entitlements will be carried over to the relevant New Ordinary Shares but not the New Deferred Shares, and the New Ordinary Shares which comprise fractional entitlements will then be aggregated and sold on the open market (see further explanation regarding fractional entitlements below).

Accordingly, following the implementation of the Capital Reorganisation, any Shareholder who as a result of the Consolidation has a fractional entitlement to any New Ordinary Shares, will not have a proportionate shareholding of New Ordinary Shares exactly equal to their proportionate holding of Existing Ordinary Shares.

Furthermore, any Shareholders holding fewer than 100 Existing Ordinary Shares as at the Record Date will cease to be a Shareholder. The minimum threshold to receive Consolidated Shares will be 100 Existing Ordinary Shares.

Sub-division

Immediately following the Consolidation, each Consolidated Share will be sub-divided into one New Ordinary Share and one New Deferred Share.  The Subdivision has been structured in such a way so that each of the New Ordinary Shares will thereafter retain the nominal value of 0.1 pence each which is the current nominal value of the Existing Ordinary Shares.

Where there are fractional entitlements to a Consolidated Share, the Board considers it fair that upon Subdivision, the same fractional entitlements to a Consolidated Share will apply to each New Ordinary Share but not a New Deferred Share.

The Record Date for the Subdivision will be the same as for the Consolidation, which is 6.00 p.m. on 18 September 2017.

Effects of the Capital Reorganisation

For purely illustrative purposes, examples of the effects of the Capital Reorganisation (should it be approved by shareholders) are set out below:

Number of Existing Ordinary Shares held	New Ordinary Shares following the Capital Reorganisation	New Deferred Shares following the Capital Reorganisation
99	0	0
100	1	1
1,100	11	11

The example below shows a fractional entitlement, the value of which will depend on the market value of the New Ordinary Shares at the time of sale.

Number of Existing Ordinary Shares held	New Ordinary Shares following the Capital Reorganisation	New Deferred Shares following the Capital Reorganisation	Fractional entitlement following the Capital Reorganisation
2,050	20	20	0.5

Application will be made for the New Ordinary Shares to be admitted to trading on AIM and dealings in the New Ordinary Shares are expected to commence on 19 September 2017.

Fractional entitlements to Consolidated Shares

As set out above, the Consolidation will give rise to fractional entitlements to a Consolidated Share where any holding is not precisely divisible by 100.  On Subdivision of any such Consolidated Share which occurs immediately thereafter, the same fractional entitlement will apply to each New Ordinary Share but not a New Deferred Share then arising. As regards the New Ordinary Shares, no certificates regarding fractional entitlements will be issued. Instead any New Ordinary Shares in respect of which there are fractional entitlements will be aggregated and sold in the market for the best price reasonably obtainable on behalf of Shareholders entitled to fractions (the "Fractional Shareholders").

The Company will distribute the proceeds of sale in due proportion to any such Fractional Shareholders in accordance with article 4.2 of the Articles. In the event that the net proceeds of sale amount to £3.00 or less, the Board is of the view that, as a result of the disproportionate costs, it would not be in the best interests of the Company to distribute such proceeds of sale, which instead shall be retained for the benefit of the Company in accordance with article 4.2 of the Articles.

For the avoidance of doubt, the Company is only responsible for dealing with fractions arising on registered holdings. For Shareholders whose shares are held in the nominee accounts of UK stockbrokers, the effect of the Capital Reorganisation on their individual shareholdings will be administered by the stockbroker or nominee in whose account the relevant shares are held. The effect is expected to be the same as for shareholdings registered in beneficial names, however it is the stockbroker's or nominee's responsibility to deal with fractions arising within their customer accounts, and not the Company's.

Resulting Share Capital

The issued share capital of the Company immediately following the Capital Reorganisation (assuming it is approved by the Shareholders), is expected to comprise 37,644,709 New Ordinary Shares, 37,644,709 New Deferred Shares and 190,108,108 Existing Deferred Shares.

Rights attaching to New Ordinary Shares and the New Deferred Shares

The New Ordinary Shares arising upon implementation of the Capital Reorganisation will have the same rights as the Existing Ordinary Shares including voting, dividend and other rights.

The New Deferred Shares will have the same rights as the Existing Deferred Shares. They will be non-transferable and have no dividend/distribution or voting rights.

Effects on Options and Other Instruments

The entitlements to Ordinary Shares of holders of securities or instruments convertible into Ordinary Shares (such as share options and warrants) will be adjusted to reflect the Capital Reorganisation. The Company will issue new documents to holders of such instruments in due course. 

All warrants and options remain subject to relevant vesting conditions.

United Kingdom taxation in relation to the Capital Reorganisation

For the purposes of UK taxation of chargeable gains, a Shareholder should not be treated as making a disposal of all or part of his holding of Existing Ordinary Shares by reason of the Consolidation. The New Ordinary Shares should be treated as the same asset, and as having been acquired at the same time and at the same aggregate cost as, the holding of Existing Ordinary Shares from which they derive. On a subsequent disposal of the whole or part of the New Ordinary Shares comprised in the new holding, a shareholder may, depending on his or her circumstances, be subject to tax on the amount of any chargeable gain realised.

6.             Admission of the New Ordinary Shares

Application will be made for the New Ordinary Shares to be admitted to trading on AIM in place of the Existing Ordinary Shares. Subject to Shareholder approval of Resolution 2, it is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence on 19 September 2017. Following the Capital Reorganisation, the Company's new ISIN Code will be GB00BF44KY60 and its new SEDOL Code will be BF44KY6.

Shareholders who hold Existing Ordinary Shares in uncertificated form will have such shares disabled in their CREST accounts on the Record Date, and their CREST accounts will be credited with the New Ordinary Shares following Admission, which is expected to take place on 19 September 2017.

Following the Capital Reorganisation, existing share certificates will cease to be valid and new share certificates are expected to be despatched to those Shareholders who hold their Existing Ordinary Shares in certificated form, on or around 3 October 2017. No share certificates will be issued in respect of Consolidated Shares or New Deferred Shares.

7.             General Meeting

Set out at the end of this document is the notice convening the GM to be held on 18 September 2017 at Allenby Capital Limited, 5 St. Helen's Place, London EC3A 6AB at 11.00 a.m. at which the Resolutions will be proposed.

8.             Action to be taken

Shareholders will find enclosed with this document a reply-paid Form of Proxy for use at the GM. Whether or not you intend to be present at the GM, you are requested to complete and sign the Form of Proxy and return it to the Company's Registrars, Capita Asset Services, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible and, in any event, so as to arrive no later than 11.00 a.m. on 16 September 2017. Unless the Form of Proxy is received by this date and time, it will be invalid. The completion and return of a Form of Proxy will not preclude you from attending the GM and voting in person if you so wish.

Shareholders are reminded that, if their Ordinary Shares are held in the name of a nominee, only that nominee or its duly appointed proxy can be counted in the quorum at the General Meeting.

If you are in any doubt as to what action you should take, you are recommended to seek your own personal financial advice from your broker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser, immediately.

9.             Recommendation

The Directors consider that the Proposals are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the GM, as they intend to do in respect of their aggregate interests of 42,953,479 Existing Ordinary Shares (representing approximately 1.14 per cent. of the Existing Ordinary Shares).

DEFINITIONS

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

"Act"	the Companies Act 2006 (as amended);
"AIM"	the market of that name operated by the London Stock Exchange;
"AIM Rules"	the AIM Rules for Companies and the AIM Rules for Nominated Advisers (as amended from time to time);
"Allenby Capital"	Allenby Capital Limited, a private limited company incorporated in England & Wales under registered number 6706681 and having its registered office at 5 St Helen's Place, London, EC3A 6AB, the Company's nominated adviser and broker;
"Articles"	the articles of association of the Company as at the date of this document;
"Board" or "Directors"	the directors of the Company as at the date of this document, whose names are set out on page 5 of this document;
"Board Authority"	the proposed Resolution to approve the allotment of up to 80,000,000 Ordinary Shares and disapplication of pre-emption rights over 60,000,000 of those shares.
"Capital Reorganisation"	the proposed Consolidation and Subdivision of the Existing Ordinary Shares;
"Certificated" or in "Certificated Form"	a share or security which is not in uncertificated form (that is, not in CREST);
"Company" or "Rose"	Rose Petroleum plc, a public limited company incorporated in England & Wales under registered number 04573663 and having its registered office at 20-22 Wenlock Road, London, N1 7GU;
"Consolidated Shares"	the ordinary shares of 10 pence each in the Company to be created following the Consolidation;
"Consolidation"	the consolidation of 100 Existing Ordinary Shares into one Consolidated Share;
"CREST"	the computerised settlement system (as defined in the CREST Regulations) operated by Euroclear UK & Ireland Limited which facilitates the transfer of title to shares in uncertificated form;
"Disposal"	the proposed disposal of the SDA Mill pursuant to the terms of the MOU, conditional on Shareholder approval at the GM and subject to entering into the SPA;
"Existing Deferred Shares"	the 190,108,108 existing deferred shares of 9.9 pence each in the capital of the Company in issue at the date of this document;
"Existing Ordinary Shares"	the 3,764,470,841 Ordinary Shares in issue at the date of this document;
"Form of Proxy"	the form of proxy enclosed with this document for use by Shareholders in connection with the General Meeting;
"General Meeting" or "GM"	the general meeting of the Company convened for 11.00 a.m. on 18 September 2017, notice of which is set out at the end of this document;
"Group"	the Company together with its Subsidiaries (as defined in the Act) as at the date of this document;
"London Stock Exchange"	London Stock Exchange plc;
"Magellan"	Magellan Gold Corporation (OTCQB: MAGE);
"Magellan Acquisition Corp"	Magellan Acquisition Corporation, a wholly owned subsidiary of Magellan;
"MOU"	the memorandum of understanding entered into by Rose and Magellan;
"New Deferred Shares"	the 37,644,709 deferred shares of 9.9 pence each to be created pursuant to the Capital Reorganisation;
"New Ordinary Shares"	the new ordinary shares of 0.1 pence each in the capital of the Company to be created pursuant to the Capital Reorganisation;
"Notice of GM"	the notice convening the GM, which is set out at the end of this document;
"Ordinary Shares"	the ordinary shares of 0.1 pence each in the capital of the Company from time to time;
"Paradox Acreage"	the Company's oil and gas exploration acreage in the Paradox Basin, Utah;
"Proposals"	(i) The Disposal; (ii) the Capital Reorganisation; and (iii) the Board Authority;
"Resolutions"	the resolutions set out in the Notice of GM to effect the Proposals and 'Resolution' shall mean any one of them;
"Shareholders"	holders of Ordinary Shares from time to time and the term "Shareholder" shall be construed accordingly;
"SDA Mill"	the Group's mineral processing mill operation in San Dieguito de Arriba, State of Nayarit, Mexico and its associated assets, licenses and agreements;
"SPA"	the stock purchase agreement to be entered into between the Company, Vane UK and Magellan Acquisition Corp to effect the Disposal;
"Subdivision"	the subdivision of each Consolidated Share into one New Ordinary Share and one New Deferred Share;
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland;
"Vane UK"	Vane Minerals (UK) Limited, a wholly owned subsidiary of the Company;
"£"	pounds sterling, the lawful currency of the United Kingdom; and
"US$"	United States dollar, the lawful currency of the United States of America.

 

END

 

 

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