Cash placing and subscription of GBP1.42 million
Savannah Resources Plc / Index: AIM / Epic: SAV / Sector: Mining
26 September 2016
Savannah Resources Plc
Cash Placing and Subscription of £1.42 million
Letters of Intent for further £0.83 million cash investment from Al Marjan and Directors
Savannah Resources plc (AIM: SAV) ('Savannah' or 'the Company'), the AIM quoted resource development company, announces that it has raised approximately £1.42 million (before expenses) through the placing ('Placing') of 28,208,973 new ordinary shares ('Placing Shares') and subscription ('Subscription') for 12,500,000 new ordinary shares ('Subscription Shares') at a placing price of 3.5p per ordinary share (the 'Placing Price') with both new and existing investors. Beaufort Securities acted as broker to the Placing, which was significantly oversubscribed.
HIGHLIGHTS:
· Raised gross proceeds of £1.42 million cash
· Funds to be used predominately to support the development of Savannah's copper projects in Oman, with mining targeted to commence in late 2017, and for working capital purposes at its newly acquired lithium projects in Finland
· Letters of intent received for additional £0.83m cash from Directors and their related parties (Al Marjan Ltd) for when the Company has exited its current "close period"
David Archer, Savannah's Chief Executive Officer said today, "This significantly oversubscribed placing of £1.42 million demonstrates the support we are receiving from new and existing shareholders in our strategy to bring our copper projects in Oman to production late next year, pursuing our projects in Mozambique as well as unlocking the potential of our exciting new lithium projects in Finland.
"We recently announced that we have applied for mining licences in Oman for our Mahab 4 and Maqail South Deposits in Block 5, and following this significant milestone we are now looking forward to receiving an updated Mineral Resource in Q4, which we hope will further improve our current Indicated and Inferred Mineral Resource of 1.7Mt at 2.2% copper as a result of our recent intensive drill programme. Further updates will be made to the market as we progress towards the mine development stage."
Details of Placing and Subscription and Letters of Intent
The Company will have a pro-forma cash balance of £1.8 million following the receipt of the Placing and Subscription proceeds of £1.42 million. The Company, which is currently in a "close period" that restricts Directors' trading in the Company's shares, has received letters of intent in respect of investing on the same terms (this is consistent with the Relationship Agreement between the Company and Al Marjan) as the Placing and Subscription once the Company has exited the "close period". Specifically:
· Al Marjan Ltd the Company's largest shareholder intend to maintain its shareholding of 29.99% with a subscription of £ 685,370 cash;
· the Company's CEO, David Archer intends to maintain his shareholding of 5.7696% with a subscription of £129,816 cash; and
· the Company's Chairman, Matthew King, intends to subscribe for £10,000 worth of shares in cash.
This would potentially result in further gross cash proceeds of £825,186 if these letters of intent are subsequently acted upon.
The net proceeds of the Placing and Subscription will be used by the Group to fund work on its Oman Copper-Gold Project to help deliver Mineral Resource updates, licencing documents, and a scoping study, to pursue its projects in Mozambique, to define drill targets at its lithium projects in Finland as well as for general working capital purposes to support the Company.
Application will be made for the Placing and Subscription Shares, which will rank pari passu with the existing ordinary shares in the Company, to be admitted to trading on AIM ('Admission'). It is expected that Admission will become effective and dealings will commence at 8.00 a.m. on 30 September 2016.
Following Admission the total issued share capital will consist of 425,869,714 ordinary shares. As such the total number of voting rights in the Company will be 425,869,714 ordinary shares. This number may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure and Transparency Rules.
The Company will issue 1,410,449 share options to Beaufort Securities in connection with the Placing. The exercise price for these share options is 5.0p per share, they have an exercise period limited to three years and they vest immediately
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.
**ENDS**
For further information please visit www.savannahresources.com or contact:
|
David Archer |
Savannah Resources plc |
Tel: +44 20 7117 2489 |
|
David Hignell / Gerry Beaney (Nominated Adviser) |
Northland Capital Partners Ltd |
Tel: +44 20 3861 6625 |
|
Jon Belliss / Elliot Hance (Corporate Broker) |
Beaufort Securities Ltd |
Tel: +44 20 7382 8300 |
|
Charlotte Page / Lottie Brocklehurst |
St Brides Partners Ltd |
Tel: +44 20 7236 1177 |
Notes
Savannah Resources Plc (AIM: SAV) is a growth oriented, multi-commodity, development company.
Oman
Savannah has interests in two copper blocks in the highly prospective Semail Ophiolite Belt in Oman. The projects, which have an Indicated and Inferred Mineral Resource of 1.7Mt at a grade of 2.2% copper and high grade intercepts of up to 56.35m at a grade of 6.21% Cu, with additional gold upside potential, provide Savannah with an excellent opportunity to potentially evolve into a mid-tier copper and gold producer in a relatively short time frame. Together with its Omani partners, Savannah aims to outline further mineral resources to provide the critical mass for a central operating plant to develop the deposits, and in December 2015 outlined exploration targets of between 10,700,000 and 29,250,000 tonnes grading between 1.4% and 2.4% copper.
Mozambique
Savannah has agreed to acquire 100% of Matilda Minerals Limitada which currently operates the Jangamo exploration project, and has agreed with Rio Tinto to form a joint venture in Mozambique to develop the combined Mutamba/Jangamo Project. Formation of the joint venture remains subject to approval by the Ministry of Mineral Resources and Energy of the Republic of Mozambique. Jangamo has a 65Mt Inferred Mineral Resource at a grade of 4.2% total heavy minerals ("THM") at a 2.5% cut-off grade. The Mutamba, Dongane and Chilubane deposits have a combined exploration target of 7-12Bn tonnes at a grade of 3-4.5% THM (published in 2008).
Finland
Savannah has Reservation Permits over two new lithium projects, Somero and Erajarvi, covering an area of 159km² in Finland. Savannah holds a 100% interest in these projects through its Finnish subsidiary Finkallio Oy. Geological mapping by the Finnish Government within the project areas has highlighted the presence of lithium minerals spodumene, lepidolite and petalite with the Government also identifying Somero and Erajarvi as one of the most prospective areas to discover lithium deposits in Finland. Savannah plans to initiate an exploration programme including data compilation, geological mapping and surface sampling with the aim of generating drill ready targets during 2016.
This information is provided by RNS
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