Placing

RNS Number : 1994K

Goldstone Resources Ltd

26 July 2013

 



GOLDSTONE RESOURCES LTD

("GoldStone" or "the Company")

PLACING

GoldStone (AIM: GRL), the AIM quoted exploration company focused on gold in West Africa, announces that it has conditionally raised £359,477 (approximately US$550,000) before expenses through a placing of new ordinary shares at a price of 1p per share (the "Placing").

Background

During 2013 GoldStone has made strong progress in developing its assets whilst seeking to conserve financial resources during the currently challenging market conditions.

In Senegal, the Company agreed a joint venture with Randgold Resources Limited ("Randgold") in April 2013 for the exploration of the Sangola licence.  Under the agreement, Randgold is funding all the costs of exploration up to and including the completion of a pre-feasibility study indicating that mining of at least 1M oz is economically feasible.  Randgold commenced a 6,000m reverse circulation drilling programme in June and first results are expected in the near future.  A further 4,000m reverse circulation drilling will have to be completed by Randgold before the end of March 2014 in order to comply with the minimum spend requirements of the joint venture agreement.

The Company has undertaken limited diamond drilling programmes at both Oyem and Ngoutou in Gabon.  At Oyem, high grade mineralisation was encountered along two lines 400m apart within a gold anomalous zone with a strike length of approximately 15km.  Similarly, at Ngoutou gold mineralisation was discovered in the first two drill holes covering 120m of strike, again within a gold in soil anomaly with a strike length in excess of 15km.

At Manso Amenfi in Ghana, GoldStone has undertaken a programme of soil sampling which yielded a number of encouraging gold in soil anomalies.  A trenching programme testing some of the most promising soil anomalies is planned for 2013.

GoldStone's most advanced project is Homase/Akrokerri in Ghana, where an increased resource of 602,000 oz Au at a grade of 1.77 g/t was reported in November 2012 following further drilling.  As a result of the financial constraints under which the Company is operating, which will be partially alleviated by the Placing, the Directors have decided that GoldStone should seek to sell its interests in Homase/Akrokerri.  The intention is that the sale proceeds would provide sufficient funds to advance significantly the remaining projects without further dilution of shareholders' interests.  There have been discussions with a number of parties, some of which are ongoing, but there can be no guarantee that a satisfactory sale will be achieved.

The Placing

The Company, through its broker, W H Ireland Limited, has conditionally placed 35,947,700 new ordinary shares (the "Placing Shares") at 1p per share, raising £359,477 (before expenses).

Unity Mining Limited ("Unity"), which holds 107,053,326 ordinary shares, representing 33.47% of the current issued share capital, has undertaken to subscribe for 12,078,400 ordinary shares in the Placing.  Following the Placing, Unity will hold 119,131,726 ordinary shares in GoldStone, which will represent 33.48% of the Company's issued share capital.  Unity is a substantial shareholder in the Company under the AIM Rules for Companies and its subscription in the Placing is classified as a related party transaction.  The Directors of GoldStone (excluding Andrew McIlwain and Bill Geier who are Chief Executive Officer and Chief Financial Officer of Unity respectively) consider, having consulted with W H Ireland Limited, that the terms of the subscription by Unity are fair and reasonable insofar as shareholders are concerned.

Application has been made for the Placing Shares to be admitted to trading on AIM which is expected to take place on 30 July 2013.

Following the Placing, there will be 355,804,438 ordinary shares of 1p each in issue.

In order to conserve cash resources, Jurie Wessels and Hendrik Schloemann, the Executive Directors of the Company, together with members of the operational management, agreed to defer 50% of their remuneration since 1 March 2013 and it is planned that this will remain the case until there is a significant change in the Company's financial position which, for the avoidance of doubt, does not include the Placing.  Following the announcement of the final results for the year ended 28 February 2013, which will be announced during August, the Company will no longer be subject to a close period and, subject to the agreement of the Remuneration Committee, the remuneration amounts outstanding, net of tax, may be converted into ordinary shares at a price of 1p per share.  However, there is no commitment that this will occur.

Jurie Wessels, Chief Executive Officer of GoldStone, commented:

"We are pleased with the response to the placing from investors.  The funds raised will enable us to undertake further work at Manso Amenfi and to progress our plans to monetise our interests in Homase/Akrokerri.  Further news flow is also expected from Sangola in the coming months."

Enquiries

GoldStone Resources Limited	[phone]
Jurie Wessels / Hendrik Schloemann
W H Ireland Limited	[phone]
Tim Feather

 

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