Working Capital Facility Secured

RNS Number : 0597O

Shanta Gold Limited

05 October 2012

 



5 October 2012

Shanta Gold Limited

("Shanta Gold" or the "Company")

Working Capital Facility Secured

Shanta Gold, the East African focused gold mining company, is pleased to announce it has agreed a US$4 million unsecured, short term loan facility with ETC Farming (Mauritius) Limited ("ETC").  ETC is a company in which Ketan Patel, a Director of Shanta Gold, has a beneficial interest.

The loan facility was made available on 4 October 2012 and is repayable within three months of draw down. The loan bears interest at a rate of 8 per cent. per annum and ETC is also entitled to an option over new ordinary shares of Shanta Gold equal to 3 per cent. of the value of the drawn down loan amount.  These options are to be exercisable at the volume weighted average price of ordinary shares of the Company for the ten days preceding the loan draw down. The share options are exercisable from the date of grant for a period of 36 months. In the event of a default on the loan, ETC will be entitled to have any capital repayment or interest due repaid from an issue of new ordinary shares of the Company to it, based on the closing middle market price of the Company's ordinary shares on the date repayment of the loan is due.

The provision of the loan facility from ETC is a related party transaction under the AIM Rules. Having consulted with the Company's nominated adviser, Liberum Capital Limited, the Directors, excluding Mr Ketan Patel and his alternate Director, Mr Maheshkumar Patel, consider that the terms of the loan from ETC are fair and reasonable insofar as Shareholders are concerned. In giving advice to the Directors, Liberum has taken into account the Directors' commercial assessments of the loan terms available from third parties and alternative sources of debt financing.

Shanta Gold remains in discussions with additional providers of working capital financing facilities to meet its short term working capital requirements during the ramp up phase of the New Luika Gold Mine.

Enquiries:

Shanta Gold Limited	Tel: [phone]
Walton Imrie / Mike Houston
Nominated Adviser and Broker
Liberum Capital Limited	Tel: + 44 (0)20 3100 2000
Michael Rawlinson / Simon Atkinson / Christopher Kololian
Financial Public Relations
FTI Consulting	Tel: [phone]
Billy Clegg / Oliver Winters

About Shanta Gold Limited

Shanta Gold is an East African focused gold mining company. It currently has defined ore resources on the New Luika and Singida projects in Tanzania and holds exploration licences over a number of additional properties. The Company's flagship New Luika Gold Mine commenced production and achieved first gold pour in August 2012. The Company is admitted to trading on AIM and has approximately 319 million shares in issue.

For further information visit the Company's website: www.shantagold.com.

 

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