Proposed Aim Cancellation and

RNS Number : 2071S

Golden Prospect Precious Metals Ltd

14 May 2009

 



14 May 2009

GOLDEN PROSPECT PRECIOUS METALS LIMITED

Proposed AIM Cancellation of Ordinary Shares and Warrants

Notices of Annual General Meeting and separate Warrantholders Meeting

Posting of 2008 Annual Report & Financial Statements

The Board of Directors (the 'Board' or the 'Directors')) of Golden Prospect Precious Metals Limited ('GPPM' or the 'Company') is today posting a Circular to shareholders and warrantholders of the Company (the 'Circular') regarding the usual business of the Annual General Meeting ('AGM'), but also including a special resolution for the proposed cancellation of the trading on AIM in the Company's ordinary shares of £0.001 each (the 'Ordinary Shares') and a separate Warrantholders Meeting to consider an extraordinary resolution of the Warrantholders for the proposed cancellation of the trading on AIM in the Company's warrants to subscribe for Ordinary Shares (the 'Warrants').  Subject to such cancellation becoming effective, the Board intends to apply for admission of the Company's Ordinary Shares and Warrants to trading on the International Bulletin Board of the London Stock Exchange ('ITBB'). In any event, the listing of the Company's Ordinary Shares and Warrants on the Channel Islands Stock Exchange ('CISX') will continue.

The Annual General Meeting is being convened to be held at 11.00 a.m. on Friday, 5 June 2009 and the separate Warrantholders Meeting to be held immediately after the conclusion (or adjournment) of the Annual General Meeting.

Copies of the Annual Report & Financial Statements of the Company for the year ended 31 December 2008 (the '2008 Report & Financial Statements') are also today being posted to shareholders and warrantholders of the Company in conjunction with the Circular and forms of proxy for use at the AGM and separate Warrantholders Meeting.

Copies of the Circular and the 2008 Report & Financial Statements will also be available later today on the Company's website at www.gppm.co.uk.

Background to and Reasons for the AIM Cancellation

The Company's Ordinary Shares and Warrants were first admitted to trading on AIM on 28 November 2006. On 24 June 2008, the Company's Ordinary Shares and Warrants were also admitted to listing on the Official List of the CISX. As referred to in the announcement on 27 April 2009 by the Company of its Annual Results for the year ended 31 December 2008, the Board has been carefully reviewing the trading liquidity in the Ordinary Shares and the Warrants and the costs associated therewith and is now proposing to Shareholders and Warrantholders that the Company cancels the admission of its Ordinary Shares and Warrants to trading on AIM (the 'AIM Cancellations'). As a direct result of the AIM Cancellation in respect of both the Ordinary Shares and the Warrants, the costs to the Company will reduce by £35,000 a year (representing principally the annual cost of engagement of a nominated adviser and broker, as required pursuant to the AIM Rules for Companies (the 'AIM Rules')).

AIM Cancellation

In accordance with Rule 41 of the AIM Rules, the Company has today notified the London Stock Exchange of the proposed AIM Cancellation, which is conditional, in the case of the Ordinary Shares, upon the consent of not less than 75 per cent of votes cast by Shareholders in favour of the AIM Cancellation resolution at the AGM and in the case of the Warrants, upon the consent of not less than 75 per cent of votes cast by Warrantholders in favour of the AIM Cancellation resolution at the separate Warrantholders Meeting (each an 'AIM Cancellation Resolution' and together the 'AIM Cancellation Resolutions').

If the AIM Cancellation Resolutions are approved by the requisite majorities of Shareholders and Warrantholders at the AGM and at the separate Warrantholders Meeting (respectively), it is anticipated that the AIM Cancellation will become effective in respect of both the Ordinary Shares and the Warrants at 7.00 a.m. on 15 June 2009.

If the AIM Cancellation Resolutions are not passed by both the Shareholders and the Warrantholders such that either the Ordinary Shares or the Warrants would be required to continue to be traded on AIM, the Company would still be required to comply with the AIM Rules and, under the AIM Rules, to continue to engage a nominated adviser and broker and therefore to incur the cost of such compliance and adviser and broker. In such circumstances, the Directors will therefore not apply to the London Stock Exchange for the cancellation of the trading on AIM of the either the Ordinary Shares or the Warrants (even though an AIM Cancellation Resolution was passed in respect of one of them)).

Strategy following the AIM Cancellation

The strategy of the Company will not be affected in any way by the AIM Cancellation and will continue to be to generate above average returns for Shareholders primarily through the capital appreciation of its investments, by investing in a selective portfolio of securities and other instruments in the precious metals sector.

However, following the AIM Cancellation becoming effective in respect of both the Ordinary Shares and the Warrants, the Company will not be under the ongoing obligation of Rule 8 of the AIM Rules to, as a minimum, seek the consent of its shareholders for its investing strategy on an annual basis. No resolution will therefore be put to shareholders in this regard at Annual General Meetings following this year's Annual General Meeting. The Company will however still be required under the CISX Rules not to make any material changes to its principal investment objectives and policies within 3 years of commencement of its operations (i.e. prior to 28 November 2009) without the prior consent of a majority of the Shareholders and the Warrantholders.

Effects of the AIM Cancellation and Transactions in the Ordinary Shares and Warrants following the AIM Cancellation

Subject to the AIM Cancellation taking effect, the Board intends to set up a new electronic trading facility on the ITBB for both the Ordinary Shares and the Warrants, so that Shareholders and the Warrantholders will continue to be able to trade their Ordinary Shares and Warrants in London.

However, the AIM Cancellation and admission to trading on ITBB will have implications for the Shareholders and the Warrantholders. In particular, it should be noted that following the AIM Cancellation in respect of both the Ordinary Shares and the Warrants, the AIM Rules will cease to apply to the Company.

However, the Company will continue to publish financial and other information as required by the CISX Listing Rules through both the CISX website at www.cisx.com and the Company's own website at www.gppm.co.uk and will also voluntarily publish such information through the Regulatory News Service.

Whilst the Company will make every effort to ensure that the level of information disclosed to the Shareholders and the Warrantholders does not fall below the historical high level of disclosure, there can be no assurances that an equivalent level of disclosure to that currently provided by the Company pursuant to its obligations under the AIM Rules will be forthcoming under the Listing Rules of the CISX (the 'CISX Listing Rules'). Furthermore, the Company's nominated adviser, Singer Capital Markets Limited, will no longer act as the Company's nominated adviser, but will continue as broker to the Company.

Net Asset Value publication

At present, the Company publishes, during the following month, the net asset value per Ordinary Share of the Company (the 'NAV per share'), as prepared by the Company's administrator as at each month end. In normal circumstances, publication of the NAV per share takes place within 5 business days after the month end through the Regulatory News Service and through the CISX website, as well as on the Company's own website. On the basis that the AIM Cancellation becomes effective in respect of both the Ordinary Shares and the Warrants, such NAV per share will nevertheless continue to be published on the CISX website, on the Company's own website and via the Regulatory News Service.

International Bulletin Board of the London Stock Exchange (ITBB)

The ITBB is an order-driven trading service for international securities.  These securities are either secondary listed equities on the London Stock Exchange's main market for listed securities or those admitted to trading only on the ITBB on the basis of a listing elsewhere. In the Company's case, its securities are eligible to be traded on the ITBB in view of the existing listing of both the Ordinary Shares and the Warrants on the Official List of the CISX.

The ITBB is a trading service in the same way as the domestic trading platforms such as SEAQ and SETS, but it is not a market and it does not have any of its own regulations (other than limited procedural requirements under the London Stock Exchange's 'Admission and Disclosure Standards'). For so long as the Company's Ordinary Shares and Warrants are admitted to trading on AIM, they can be traded on the SEAQ trading system, but SEAQ is not an electronic trading platform and therefore requires market makers to trade the securities on a 'matched bargain' basis. By contrast, the ITBB is an electronic trading platform, so that securities admitted to trading on the ITBB can either be traded in the same way as on SEAQ through market makers or traded electronically. Shareholders and Warrantholders should therefore be aware that not all London Stock Exchange member firms operate on the ITBB so that there may be no market makers in the Company's Ordinary Shares or Warrants if they are admitted to trading on the ITBB - and if there are no market makers, the Ordinary Shares and the Warrants will have to trade electronically, such that a London Stock Exchange member firm will have to make an order on behalf of a Shareholder or Warrantholder and wait for it to match electronically. The Company and its Investment Manager will seek to ensure that there are market makers making price quotations in the Company's Ordinary Shares and Warrants.

The Company's investment manager, CQS Cayman Limited Partnership/New City Investment Managers Limited, does however already manage two companies (Geiger Counter Limited and New City Energy Limited) the securities of which are listed on the CISX and also trade on the ITBB with considerable success.

Application to ITBB

Application will be made to the London Stock Exchange for the Ordinary Shares and the Warrants to be admitted to the ITBB and for such admission to become effective so far as is practicable simultaneously with the AIM Cancellation becoming effective in relation to the Ordinary Shares and the Warrants, so that there is no interruption in the ability of Shareholders and Warrantholders to trade such securities on the London markets. Whilst it is anticipated that admission of the Ordinary Shares and the Warrants to trading on the ITBB will occur on 16 June 2009 (being the anticipated date of the AIM Cancellation in respect of the Ordinary Shares and the Warrants, subject to the passing of the AIM Cancellation Resolutions), there can be no assurances that the two processes will complete concurrently. In the case of any delay in the admission of the Ordinary Shares and the Warrants to trading on the ITBB, the Board will endeavour to limit such delay to a minimum.

City Code on Takeovers and Mergers

Shareholders should note that following the AIM Cancellation, the City Code on takeovers and Mergers (the 'Takeover Code') will continue to apply to the Company by virtue of the Company's Ordinary Shares and Warrants being listed on the Official List of the CISX.

Recommendation

The Directors are unanimously in favour of all the resolutions to be proposed at the AGM (including the AIM Cancellation Resolution), which they consider to be in the best interests of the Shareholders of the Company as a whole. Accordingly, the Directors unanimously recommend Shareholders to vote in favour of those resolutions at the AGM, as they intend to do in respect of their own beneficial shareholdings of an aggregate of 142,500 Ordinary Shares  (representing  0.45 per cent. of the Ordinary Shares currently in issue).

The Directors are also unanimously in favour of the AIM Cancellation Resolution to be proposed at the separate Warrantholders Meeting which they consider to be in the best interests the Warrantholders as a whole. Accordingly, the Directors unanimously recommend Warrantholders to vote in favour of the AIM Cancellation Resolution at the separate Warrantholders Meeting, as they intend to do in respect of their own beneficial holdings of an aggregate of 25,000 Warrants (representing 0.19 per cent. of the Warrants currently in issue) - .

Enquiries:-

Northern Trust International Fund

Administration Services (Guernsey) Limited                                      Tel: [phone]

Cara De La Mare

Singer Capital Markets Limited                                                         Tel: [phone]
Jos Trusted

- Ends -

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