Golden Prospect Precious Metals Ltd : Potential...

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2 May 2017

GOLDEN PROSPECT PRECIOUS METALS LIMITED
(THE "COMPANY")

Potential Bonus Issue of Subscription Shares

The Board of Golden Prospect Precious Metals Limited announces that it is reviewing, with its advisers, a potential bonus issue of subscription shares to existing shareholders on the basis of one subscription share for every two existing ordinary shares held on the record date for the bonus issue (the "Bonus Issue").

Each subscription share would confer the right (but not the obligation) to subscribe for one ordinary share upon exercise of that right (the "Subscription Share Right") and on payment of the relevant subscription price (the "Subscription Price").  It is expected that:

• the Subscription Share Right would be exercisable (at the option of the subscription shareholder) on or around the first, second or third anniversary of the Bonus Issue; and
• the Subscription Price would be equal to the published net asset value per ordinary share as at the date on or around the record date for the Bonus Issue, plus a premium depending upon the year in which they are exercised, as follows:

Subscription Date	Premium - Percentage of NAV
On or around first anniversary of bonus issue	5%
On or around second anniversary of bonus issue	10%
On or around third anniversary of bonus issue	20%

The percentage premia applying upon exercise of the Subscription Share Right and the resulting Subscription Price reflect the Board's confidence in the Company's medium to long term prospects and its hope that holders of subscription shares would be able to exercise their Subscription Share Rights and acquire ordinary shares on favourable terms in the future.  The subscription shares would be listed on The International Stock Exchange and tradeable via SETSqx, the London Stock Exchange's electronic trading service.

The Directors believe that the Bonus Issue would have the following advantages:

• subscription shares should represent an attractive way for investors to participate in any future NAV growth of the Company through conversion into ordinary shares at a predetermined price;
• ordinary shareholders on the register at the record date for the Bonus Issue would receive securities with a monetary value which may be traded in a similar fashion to their existing ordinary shares or, in due course, converted into ordinary shares;
• on any exercise of the Subscription Share Rights, the capital base of the Company would increase, allowing operating costs to be spread across a larger number of ordinary shares, and this may cause the ongoing charges as a percentage of net assets to fall;
• following the exercise of any Subscription Share Rights, the Company would have an increased number of ordinary shares in issue which may improve the liquidity in the market for its ordinary shares; and
• the Bonus Issue may broaden the Company's ordinary shareholder base as the subscription shares are dispersed in the market, attracting new investors and improving liquidity for ordinary shareholders.

Implementation of the Bonus Issue would require the Company to publish a listing document, amendments to the Company's articles of association to provide for the rights of the subscription shares and authority to be obtained from shareholders to proceed with the bonus issues and allot the subscription shares.

A further announcement will be made in due course.

Enquiries

New City Investment Managers Limited	Craig Cleland	T: [phone]
Cantor Fitzgerald Europe	Sue Inglis	T: [phone]
R&H Fund Services (Guernsey) Limited	Gareth Smith	T :[phone]

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Source: Golden Prospect Precious Metals Ltd via Globenewswire