Standby Equity Distribution A

RNS Number : 3589E

Shanta Gold Limited

18 December 2009

 



Shanta Gold Limited

("Shanta Gold" or "Company")

Standby Equity Distribution Agreement

The Board of Shanta Gold is pleased to announce that it has today entered into a Standby Equity Distribution Agreement ("SEDA") with YA Global Master SPV. Ltd ("YAGM").

Under the SEDA, YAGM has committed up to £3,000,000 ("Commitment Amount") to subscribe for new ordinary shares of the Company and this facility is available to the Company from 17 December 2009 for a period of 30 months. The number and timing of advances is at the discretion of Shanta Gold, subject to certain agreed restrictions under the SEDA, including:

• that the Company shall not be entitled to request more than one advance in any 10 day period; 

• the advance is limited to 200% of the volume weighted daily trading value for the 10 day trading period immediately prior to giving notice under the facility; and 

• that there is a constraint on holding greater than 2.99% of the issued share capital at any time or 0.99% in the event that Shanta Gold is itself under offer. 

"Under the SEDA, YAGM has agreed, at the request of the Company, to subscribe for new ordinary shares in the Company up to an aggregate amount equal to the Commitment Amount.  Subscriptions will be priced at 7% discount to the market price over the ten trading day period immediately after Shanta Gold notifies YAGM of a subscription request and will occur at such time and in such sizes as the Company may determine; subject to certain agreed limitations as contained in the SEDA.

Fees in connection with the SEDA payable to YAGM amount to £60,000, of which £40,000 is payable upon the signing of the SEDA and will be satisfied by the issue of 523,793 new ordinary shares ("Implementation Shares") at an effective price of 7.64 pence per Implementation Share. The remaining £20,000 will be payable, at the Company's option, either in cash or by the issue of new ordinary shares to YAGM at the daily volume weighted average price of the Company's ordinary shares on AIM on the day preceding the date of the first advance request by the Company. In addition certain fees and expenses of YAGM are to be reimbursed in terms of the agreement.

There are no new significant shareholders created by the issue of the Implementation Shares.

Application will be made to the London Stock Exchange plc for the Implementation Shares to be admitted to trading on AIM. It is expected that admission will become effective and trading will commence on 23 December 2009. The Implementation Shares will rank pari passu with the Company's existing issued ordinary shares. 

The SEDA is an innovative funding method intended to assist the Company with financing exploration and property upgrade activities. Walton Imrie, Executive Chairman of Shanta Gold said "This funding arrangement provides Shanta Gold with flexibility to raise funds efficiently as needed and at increasing valuations as the Company moves into its planned production phase."

Enquiries:

Walton Imrie

Mobile: [phone]

Walter Vorwerk
Moblie: [phone]

Fairfax I.S. PLC

Nominated Adviser and Broker

Ewan Leggat/Laura Littley

[phone]

 

END

 

 

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