Proposed Placing and Notice of General Meeting

RNS Number : 5550W

Sula Iron & Gold PLC

20 August 2015

 



Sula Iron & Gold plc / Index: AIM / Epic: SULA / Sector: Natural Resources

20 August 2015

Sula Iron & Gold plc

("Sula" or the "Company")

Proposed Placing to raise approximately £400,000 (gross)

 Share Capital Reorganisation

 Related Party Transactions and Directors' Dealings

Proposed Amendments to Articles of Association

Grant of Authority to Allot Shares and Disapplication of Pre-emption Rights

Appointment of Joint Broker

and

Notice of General Meeting

Sula (AIM: SULA), a multi-commodity exploration company focussed on Sierra Leone, is pleased to announce, inter alia, that it has raised approximately £400,000 (before expenses) via a placing of 66,666,666 new ordinary shares at a price of 0.6p per share (the "Placing Price") (the "Placing") conditional, inter alia, upon Shareholders' approval and completion of a share capital reorganisation.  

The net proceeds of the Placing will be used for general working capital purposes and to enable the Company to fund a scout drilling programme on its gold exploration target at the Company's Ferensola project (the "Exploration Target").  Details of the Exploration Target, which has been defined by SRK Consulting (UK) Ltd., were announced on 17 July 2015.  The scout drilling programme is currently expected to commence in October 2015 and will assist with the future generation of a maiden JORC compliant Mineral Resource Estimate (the "JORC MRE") for the Ferensola gold project. The generation of the JORC MRE will, however, require a further drilling programme which will be subject to the Company raising additional funds following successful completion of the scout drilling campaign.

In order for the Placing to proceed, it is necessary to undertake a share capital reorganisation since the Placing Price is less than the current nominal value of the Company's existing ordinary shares of 1p each (the "Existing Ordinary Shares").  Accordingly, it is proposed that each of the Existing Ordinary Shares be subdivided into one new ordinary share of 0.1p nominal value (the "New Ordinary Shares") and one new deferred share of 0.9p nominal value (the "Deferred Shares") (the "Share Capital Reorganisation").

The New Ordinary Shares will carry the same rights as the Existing Ordinary Shares.  The Deferred Shares will not entitle the holder thereof to receive notice of or attend and vote at any general meeting of the Company or to receive a dividend or other distribution.  On a return of capital on a winding up or dissolution of the Company, the holders of the Deferred Shares shall be entitled to participate in the distribution of the assets of the Company pari passu with the holders of the New Ordinary Shares but only in respect of any excess of those assets above £1,000,000,000,000. The holders of the Deferred Shares shall not be entitled to any further right of participation in the assets of the Company. The Company will have the right to purchase the Deferred Shares from any Shareholder for a consideration of one penny in aggregate for all of that Shareholder's Deferred Shares.  As such, the Deferred Shares effectively have no value.  Share certificates will not be issued in respect of the Deferred Shares and they will not be admitted to trading on AIM.

Certain amendments to the Company's articles of association will be required to reflect the Share Capital Reorganisation and completion of the Share Capital Reorganisation is a condition to completion of the Placing. The Placing Price represents a discount of approximately 29.4 per cent. to the closing middle market price of 0.85 pence per Existing Ordinary Share on 19 August 2015, being the last business day prior to this announcement. On completion of the Share Capital Reorganisation and the Placing, there will be 423,515,260 New Ordinary Shares and 356,848,594 Deferred Shares in issue.  Application will be made for the New Ordinary Shares (including the Placing Shares) to be admitted to trading on AIM and it is currently expected that admission to trading in the New Ordinary Shares (including the Placing Shares) will become effective and dealings commence at 8.00 a.m. on 8 September 2015 ("Admission").

In order to implement the proposed Share Capital Reorganisation, the Company requires the consent of its Shareholders.  Accordingly, a circular incorporating a formal notice of general meeting and a proxy form will be posted to Shareholders today.   The resolutions to be proposed in connection with the Share Capital Reorganisation comprise an ordinary resolution to subdivide the Existing Ordinary Shares into New Ordinary Shares and Deferred Shares and a special resolution to approve changes to the Company's articles of association necessitated by the Share Capital Reorganisation.  In addition, shareholder approval will be sought for revised share capital authorities.  Further details are set out in the Circular, being posted to Shareholders today, a copy of which will also be made available on the Company's website at www.sulaironandgold.com.

The General Meeting will be held at 10.00 a.m. on 7 September 2015 at the registered office of the Company at 201 Temple Chambers, 3-7 Temple Avenue, London, EC4Y 0DT.

The Placing is being arranged on behalf of the Company by Daniel Stewart & Company Plc ("Daniel Stewart").  Daniel Stewart will, conditional on Admission, receive commission from the Company pursuant to the Placing and the Company has also granted Daniel Stewart warrants to subscribe for up to 3,705,000 New Ordinary Shares at the Placing Price. The exercise period for these warrants is five years from the date of Admission. Conditional on and with effect from Admission, Daniel Stewart will also be appointed as joint broker to the Company.

Related Party Transactions

Nicholas Warrell and Howard Baker, being directors of the Company, have undertaken to subscribe £12,500 and £12,000 for 2,083,333 and 2,000,000 New Ordinary Shares respectively pursuant to the Placing.  Each director's participation in the Placing is considered to be a related party transaction for the purposes of Rule 13 of the AIM Rules.  Accordingly, the independent director of Sula (being Matthew Wood) considers, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms of each director's participation in the Placing are fair and reasonable insofar as Shareholders are concerned.

Following Admission, each of the aforementioned directors' interests in the ordinary share capital of the Company will be as follows:

Director	Current holding of Existing Ordinary Shares	Placing Shares	Holdingof New Ordinary Shares on Admission	% of enlarged issued share capital on Admission
Nicholas Warrell	47,729,677	2,083,333	49,813,010	11.8%
Howard Baker	0	2,000,000	2,000,000	0.5%

In addition, Des Congdon, a director of the Company's subsidiary, Blue Horizon (SL) Limited, has undertaken to subscribe for 833,333 New Ordinary Shares pursuant to the Placing representing approximately 0.2 per cent. of the Enlarged Share Capital.  Mr Congdon is not currently interested in any Existing Ordinary Shares. Mr Congdon's participation in the Placing also constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules. Accordingly, the independent director of Sula (being Matthew Wood) also considers, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms of Mr Congdon's participation in the Placing are fair and reasonable insofar as Shareholders are concerned.  

Recommendation

The Directors consider the proposals to be in the best interests of the Company and its Shareholders as a whole and, accordingly, unanimously recommend that Shareholders vote in favour of all of the Resolutions to be proposed at the General Meeting, as they intend so to do or procure to be done in respect of their own beneficial and other connected interests, amounting, in aggregate, to 48,391,985 Existing Ordinary Shares representing approximately 13.56 per cent. of the Company's existing issued ordinary share capital.

Shareholders should note that, in the event that the Share Capital Reorganisation Resolutions are not passed and the Placing does not proceed, the Company will not be able to complete its anticipated scout drilling programme on the Exploration Target on the currently planned timetable. Furthermore, the Board estimates that, if the Placing does not proceed, Sula will need to secure an alternative source of financing by no later than 30 September 2015, in order to satisfy the Company's working capital needs. There can be no guarantee that such alternative financing will be obtainable or will be available on similar commercial terms to the Placing.

Commenting on the Placing, Nick Warrell, CEO of Sula Iron & Gold Plc, said:

"We are delighted to have secured this funding which will enable us to commence the scout drilling programme on the Exploration Target. I have been most keen to drill on our gold project ever since we obtained the Ferensola licence and am confident that the assay results from the planned scout drilling programme will validate my belief that Ferensola is host to one of West Africa's major gold deposits."

For further information please visit www.sulaironandgold.com or contact:

Sula Iron & Gold plc Nick Warrell / Matt Wood		[phone]
Strand Hanson Limited (Financial and Nominated Adviser) Simon Raggett / James Harris / James Dance		[phone]
VSA Capital Limited (Broker) Andrew Raca / Richard Buckle		[phone]
Daniel Stewart & Company Plc (Joint Broker from Admission) Martin Lampshire / David Coffman		[phone]
Yellow Jersey PR (Financial PR) Dominic Barretto / Kelsey Traynor		[phone] [phone]

Capitalised terms used but not defined in this announcement have the meanings set out in the Circular dated 20 August 2015.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Publication of the Circular	20 August 2015
Latest time and date for return of Forms of Proxy	10.00 a.m. on 3 September 2015
General Meeting	10.00 a.m. on 7 September 2015
Record Time and date for the Share Capital Reorganisation and final date of trading for the Existing Ordinary Shares	5.00 p.m. on 7 September 2015
Admission effective and dealings in the New Ordinary Shares and the Placing Shares expected to commence on AIM	8.00 a.m. on 8 September 2015
Expected date for CREST members' accounts to be credited (where applicable) with Placing Shares in uncertificated form	8 September 2015
Expected date for despatch of definitive share certificates in respect of the Placing Shares in certificated form (where applicable)	by 22 September 2015

Notes:

1.     References to times and dates in this announcement are to times and dates in London (unless otherwise stated).

2.     The timing of the events set out in the above timetable and in the remainder of this announcement is indicative only. If any of the above times and/or dates should change, the revised times and/or dates will be notified via an announcement through a Regulatory Information Service.

3.     Temporary documents of title will not be issued.

**ENDS**

Notes to editors:

Sula Iron & Gold plc is a multi-commodity exploration company focused on West Africa. The Company's main objective is to explore and advance its 153 sq. km Ferensola Project in Northern Sierra Leone, which is highly prospective for iron, gold and coltan. In December 2014, the Company achieved a corporate milestone in delivering its JORC MRE for the BIF 1 iron ore project in which total resource of 514.5Mt @ 31.8% Fe was identified including a total oxide resource of 55.5Mt @ 45.26% Fe.

 

END

 

 

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