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Strategic Natural (SNRP)

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Tuesday 01 July, 2014

Strategic Natural

Update

RNS Number : 9953K
Strategic Natural Resources PLC
01 July 2014
 

Strategic Natural Resources Plc ("or the Company")

Update

 

 

Overview:

 

•           Strategic review of its Elitheni Coal Mine in South Africa

•           Purchase of a 6% stake in Millennium Energy Corp, (MENC) engaged in natural gas in the U.S.A and the issue of equity of 40,000,000 ordinary shares at 5 pence per share

•           £1,200,000 million offer of the subscription for new shares by Target Alliance (London) Limited and holdings in the company

•           Appointment of Beaufort Securities Limited as sole broker

•           Appointment of Gavin Bonnar as a director

•           Resignation of non-executive directors

 

SNR, the AIM quoted natural resources developer operating in South Africa which indirectly owns 74% of Elitheni Coal (Pty) Limited, announces that is conducting  a strategic review of its Elitheni Coal mine asset in South Africa.  The board intends to seek offers that it deems in the best interest of SNR shareholders, Elitheni shareholders and creditors and its BEE Partners.

 

The Board is seeking offers it believes recognise the value of the Elitheni coal mine.  It currently has 266,000,000 million tonnes of coal and is located in an area of extensive infrastructure.  Specifically Elitheni coal fields are located near two railway lines leading to the port of East London - from where the Company shipped its maiden cargo of circa 38,000 tonnes in September 2013.  There is also a further rail line which runs through the Elitheni mine property to the deepwater industrial port of Coega, which has capacity to load large cape sized vessels.

 

Millennium Energy Corp ('Millenium')

 

As part of its review of activities, the Company is pleased to announce it has completed the purchase of a 6% shareholding in Millennium, consisting of 5,000,000 (five million) common shares for a total consideration of £2,400,000 million, comprised of £400,000 paid in cash and £2,000,000 to be satisfied by the issue of 40 million ordinary shares, issued at 5 pence per share.  The 40,000,000 ordinary shares shall be issued as soon as practicable, following which the total number of ordinary shares and voting rights in the Company shall be 262,311,583.

 

The Millennium shares were purchased from Ivory Mint Holdings Corp, a company controlled by Irving Aronson, which also owns Target Alliance (London) Limited, the company that recently subscribed for £1,000,000 into SNR, as announced on May 14, 2014. 

 

The Company entered into the Millennium Share purchase agreement on May 19, 2014, following board approval.

 

SNR, pursuant to the share purchase agreement, paid a deposit of £400,000 to Ivory Mint Holdings Corp, which was paid on the May 19, 2014.  The transaction was subject to approval by the Company's Nominated Advisor Allenby Capital Limited.  The approval was sought on May 19, 2014.  However as of June 23, when Allenby Capital Limited resigned, such approval had yet to be obtained.  On June 11, 2014 an amended agreement with Ivory Mint was reached pursuant to which a further £260,000 was paid.  On June 27, 2014 by mutual agreement Ivory Mint Holdings and the company agreed to cancel the second agreement made on June 11, 2014, and revert to the agreement of May 19, 2014.

 

Ivory Mint Holdings Corp delivered the 5,000,000 Common Shares of MENC to the company.  The Company and Ivory Mint have agreed that the additional £260,000 paid to Ivory Mint Holdings in connection with the cancelled agreement of June 11, 2014 will be repaid to SNR as soon as possible and used to pay creditors.

 

Following advice, the Board has recognised that the Company failed to announce the Millennium share purchase agreement and the two cash payments totalling £660,000 paid in connection with this transaction in a timely manner, as required under the AIM Rules for Companies.  This was due to the Company's belief that the transaction should not be announced until such time as the suspensive conditions had been fulfilled.  This failure to announce the transaction led to the resignation of Allenby Capital Limited as Nomad.

 

Chairman and Chief Executive Officer, Alex MacDonald said, 'The Millennium transaction was entered into by the Company to secure what I consider to be a very attractive oil and gas opportunity. Millennium is engaged in the natural gas business in the U.S.A. This process of diversification will make the company more attractive to investors in the future.'

 

Millennium is a publicly traded Nevada Corporation traded on the OTC under the trading symbol "MENC", that owns an 85% working interest in seven natural gas wells located near Tucumcari, New Mexico, U.S.A. Millennium intends to commence production of natural gas and to construct a gas processing plant to produce Helium gas on site.  According to Millennium, it is estimated by the license contains 2C GIIP resources of about 200 bcf.  The gas production is targeted to commence as soon as MENC raises sufficient working capital to commence natural gas production.

 

see www.millenniumenergycorp.com

 

The ownership of the Millennium shares will not contribute to the profits or losses of the Company until such time as the Millennium Shares are sold, resulting in a profit or a loss dependent on the sales price realised at the time of sale. The Company intends to carry the Millennium shares on its books at the cost price.

 

Elitheni Board Appointments

 

Alex MacDonald has been appointed as Chairman of Elitheni Coal (Pty) Limited, Michael Shore has been appointed as finance director.  Both conducted a site visit to the Elitheni Coal mine on Wednesday June 18, 2014 and attended meetings with representatives of the Department of Mineral Resources to discuss submitting Elitheni's social development programme for the next five years.

 

Progress in paying creditors of SNR and Elitheni Coal (Pty) Limited

 

The Company has provided £230,000 to Elitheni since May 14, 2014, used to pay ZAR 2,300,000 of creditors and to pay salaries and operating expenses of Elitheni.  The Company and Elitheni continue to work towards, and are committed to paying off all creditors as quickly as possible.

 

Recent subscription funds of £1,500,000 million raised did not enable the Company to clear all of its creditors, however it did enable the Company to pay some of the most critical creditors, including London Commodity Brokers, and to purchase the Millennium Energy Corp shareholding to diversify into oil and gas. The Company believes this will allow it to attract further investor interest.  This strategy has been vindicated by the further offer of investment from Target Alliance (London) Limited.

 

Further Funding Announcement

 

The Company is pleased to announce the offer, subject to contract, of a further subscription from Target Alliance (London) Limited for £1,200,000 at 3 pence per share, such subscription to be taken up by the initial subscription of £600,000 within 5 days of trading suspension being lifted and £600,000 30 days thereafter.  The offer has been accepted by the board and is conditional upon the share trading suspension being lifted and (if required) the Takeover Panel giving and the Company's Shareholders approving a waiver of the obligation on Target Alliance (London) Limited to make a general offer for the Company' shares.  The Board anticipates that this will happen once a new Nomad is appointed.

 

Upon successful completion and receipt of the proposed £1,200,000 subscription, the proceeds of these monies shall be used to pay creditors and meet working capital needs.

 

Appointment of Gavin Bonnar as a director

 

The Company is pleased to announce the appointment of Robert Gavin Bonnar (age: 48) an Irish national as a director.  Mr.  Bonnar, a Barrister-at-Law, qualified in Northern Ireland and is also called to the bar in the Republic of Ireland.  He has over 20 years' experience in the legal profession specialising in media, libel and privacy and has developed a unique media law practice in Ireland.

 

Mr. Bonnar also has extensive commercial experience both as an investor and a lawyer and has gathered great experience in financing smaller capitalised resource and oil companies.  He has also has spent over ten years working on the ground in Africa. 

 

Mr. Bonnar owns a mediation company in Ireland and currently serves as a Non-Executive Director of a technology Company, Rapid Addition, based in London.  He formerly served on the board of Aim Listed Frontier Resources Plc, a company engaged in oil and gas exploration in the Middle East and Africa.

 

Mr. Bonnar has given his time and dedication to good causes.  He has helped house around 100,000 underprivileged South Africans and has worked on and built some 20,000 homes in South Africa.  In recognition of his efforts Mr. Bonnar is a past winner of the Archbishop Desmond Tutu Medal for Compassion.

 

Current Directorships

 

Gavin currently holds or has held the following directorships and partnerships in the last five years:

 

Current and past directorships / partnerships 

 

Current

Past (within the past five years)

Channel Ireland TV Ltd

BMG Investment Fund Ltd

Bobbyjean Limited 28

GMB Properties LLP

International Mediation and Arbitration Services LLP

Bobbyjean Limited 32


Frontier Resources International PLC (former name: Frontier Resources International Limited)


Mellon Township Limited 29


Mellon Housing Initiative 30


Niall Mellon Township Trust


Niall Mellon Township Initiative Limited



 

Gavin Bonnar was one of the designated members of GBM Properties LLP which went into receivership in or around February 2011.

 

In relation to the appointment of Gavin Bonnar to the Board of the Company, the Company confirms there is nothing additional to disclose in relation to his appointment under Schedule Two, paragraph (g) of the AIM Rules for Companies.

 

Resignation of non-executive directors

 

The board of the Company was divided and the Company announces the resignation of the three non-executive directors Gabriel Ruhan, Andy Brennan and Don Nicholson effective as of 29th June 2014 due to concerns around the announcement of the Millennium transaction.

 

Notification of interest in shares

 

The Company has been notified that Target Alliance (London) Limited, disposed of 15,000,000 shares on May 14, 2014 and of 10,000,000 shares on June 11, 2014. TAL no longer has an interest in the shares of the Company.

 

Change of Registered Office

 

The Company announces that it has changed its registered office to 44 Southampton Buildings, London WC2A 1AP.

 

Notification of Beaufort Securities as sole broker

 

The Company is pleased to announce that Beaufort Securities has been appointed a sole broker with immediate effect.

 

Replacement Nominated Advisor

 

The Company is in discussions with a Nominated advisor with a view to appointing them as a replacement Nomad as soon as possible. In accordance with AIM Rule 1, if the Company fails to appoint a replacement nominated adviser by 7:00AM on 24 July 2014, the admission of its securities to AIM will be delisted.

 

 

General Meeting

 

The general meeting held on 30 June 2014 was adjourned for 24 hours to 10:00AM on 1 July 2014 to allow for this RNS to be released and for a quorum to be present.

 

 

For further information about Strategic Natural Resources plc please visit www.snrplc.co.uk or contact:

 

 

Alex MacDonald, CEO and Chairman on +44 (0)7831642064


This information is provided by RNS
The company news service from the London Stock Exchange
 
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