TIDMORR
RNS Number : 8265H
Oriole Resources PLC
01 August 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO
BE IN THE PUBLIC DOMAIN. IN ADDITION, MARKET SOUNDINGS WERE TAKEN
IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE
RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE
INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH
PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE
INFORMATION.
1 August 2023
Oriole Resources PLC
("Oriole Resources", the "Company" or the "Group")
Lanstead Subscription and Sharing Agreement
Oriole Resources (AIM: ORR), the AIM-quoted exploration company
focussed on West Africa, is pleased to announce a conditional
subscription to raise GBP1,767,000 (the "Subscription") through the
issue of 930,000,000 new ordinary shares of 0.1 pence each in the
Company ("Ordinary Shares") at a price of 0.19 pence per Ordinary
Share (the "Issue Price") to institutional investor Lanstead
Capital Investors L.P. ("Lanstead"), together with a related
sharing agreement ("Sharing Agreement") pursuant to which the
Company pledges the gross proceeds of the Lanstead
Subscription.
Highlights
-- Subscription for 930,000,000 new Ordinary Shares (the
"Lanstead Subscription Shares") by Lanstead at an Issue Price of
0.19 pence to raise GBP1,767,000 (the "Lanstead Subscription").
The Issue Price of 0.19 pence represents a 21% premium to the
closing mid-market price (of 0.15 pence) of the Ordinary Shares on
31 July 2023, the latest business date prior to the announcement of
the Subscription.
-- The GBP1,767,000 gross proceeds of the Lanstead Subscription
will be pledged to Lanstead by the Company pursuant to a Sharing
Agreement with Lanstead. The Sharing Agreement, details of which
are set out below, entitles the Company to receive back those
proceeds on a pro rata monthly basis over a period of 24 months,
subject to adjustment upwards or downwards each month depending on
the Company's share price at the time relative to the Benchmark
Price of 0.2533 pence per share . The monthly settlement amounts
for the Sharing Agreement are structured to commence approximately
six weeks following Admission.
-- The Sharing Agreement provides the opportunity for the
Company to benefit from positive future share price performance; an
underlying reason for undertaking the fund raise in this way.
-- The proceeds of the Sharing Agreement will be used primarily
to provide funding for the Group, as Oriole continues its strategy
of seeking joint-venture partnerships and project-level
financing.
-- Immediately following completion of the Subscription,
Lanstead will hold a 26.23% interest in the Company.
Oriole Resources CEO, Tim Livesey, commented: "We are delighted
to have brought Lanstead onto the shareholder register. The
mechanics of the Sharing Agreement provide the Company with
significant upside to the proceeds that can be received, which a
traditional market placing would not have provided. Ongoing
discussions around project-level financing for the Eastern CLP, and
a partnership deal on Bibemi, will be greatly strengthened by
having an institutional investor on board, whilst we continue to
await the trigger events that will enable the monetisation of the
legacy asset portfolio.
"The Sharing Agreement is designed to remove the market's
customary nervousness about cash availability, and we are hopeful
that we can move to a position whereby good news increases the
share price, which will drive increased proceeds from the Sharing
Agreement, which we can use to drive further exploration
success."
Background to the Subscription and Sharing Agreement
Lanstead has conditionally agreed to subscribe for the Lanstead
Subscription Shares at the issue price of 0.19 pence for gross
proceeds of GBP1,767,000 . The Subscription proceeds will be
pledged to Lanstead under the Sharing Agreement pursuant to which
the Company is entitled to receive back those proceeds on a pro
rata monthly basis over a period of 24 months, subject to
adjustment upwards or downwards each month depending on the
Company's share price at the time.
A significant factor in Oriole's decision to enter into the
Subscription is that the Sharing Agreement provides the opportunity
for the Company to benefit from positive future share price
performance. There is no upper limit placed on the additional
proceeds which could be received by the Company as part of the
monthly settlements and the amount available in subsequent months
is not affected. Whilst the Company notes the corresponding risk
that a fall in Oriole Resources' share price could reduce the
amount of proceeds received, as explained below, the Directors
expect the Company's projects to make considerable positive
advancements over the 24-month term of the Sharing Agreement. If
these advancements are successful, and if the success of these
advancements is reflected in Oriole Resources' share price, the
Company expects the proceeds to be received from Lanstead to exceed
the amount pledged under the Sharing Agreement.
The proceeds will primarily be used to provide funding for the
Group, as Oriole continues its strategy of seeking joint-venture
partnerships and project-level financing. Any additional proceeds
received, beyond those needed for corporate purposes, will be used
towards direct exploration at the Company's projects in
Cameroon.
Further information on the Lanstead Subscription
Pursuant to the subscription agreement between the Company and
Lanstead (the "Lanstead Subscription Agreement"), 930,000,000 new
Ordinary Shares have today been allotted and will be issued,
conditional upon Admission, to Lanstead at 0.19 pence per Lanstead
Subscription Share for an aggregate subscription value of
GBP1,767,000.
The Lanstead Subscription proceeds of GBP1,767,000 will
immediately following Admission be pledged to Lanstead under the
Sharing Agreement under which Lanstead will then make, subject to
the terms and conditions of that Sharing Agreement, monthly
settlements (subject to adjustment upwards or downwards) to the
Company over 24 months, as detailed below. As a result of entering
into the Sharing Agreement, the aggregate amount ultimately
received by the Company under the Lanstead Subscription and the
Sharing Agreement may be more or less than GBP1,767,000, as further
explained below.
Notwithstanding the Subscription Price of 0.19 pence,
shareholders should note that the share price of the Company needs
to be on average over the 24 months of the Sharing Agreement at or
above the Benchmark Price of 0.2533 pence per share for the Company
to receive at least, or more than, the gross Subscription of
GBP1,767,000.
The Lanstead Subscription Shares will be issued credited as
fully paid and will rank pari passu in all respects with the
Company's existing issued Ordinary Shares. The Lanstead
Subscription is conditional, inter alia, on admission of the
Lanstead Subscription Shares to trading on AIM, and there being:
(i) no breach of certain customary warranties given by the Company
to Lanstead at any time prior to Admission (which is expected on or
around 7 August 2023); and (ii) no force majeure event occurring
prior to Admission.
The Sharing Agreement
In addition to the Lanstead Subscription, the Company has
entered into the Sharing Agreement, pursuant to which Oriole will
pledge the GBP1,767,000 gross proceeds of the Lanstead Subscription
to Lanstead. The Sharing Agreement will enable the Company to share
in any share price appreciation over the Benchmark Price (as
defined below). However, if the Company's share price is less than
the Benchmark Price then the amount received by the Company under
the Sharing Agreement will be less than the gross proceeds of the
Lanstead Subscription which were pledged by the Company to Lanstead
at the outset.
The Sharing Agreement provides that the Company will receive 24
monthly settlement amounts as measured against a benchmark share
price of 0.2533 pence per Ordinary Share (the "Benchmark Price").
The monthly settlement amounts for the Sharing Agreement are
structured to commence approximately six weeks following
Admission.
If the measured share price (the "Measured Price"), calculated
as the average of each day's volume weighted share price ("VWAP")
of the Company's Ordinary Shares over a 20-day period prior to the
monthly settlement date, exceeds the Benchmark Price, the Company
will receive more than 100% of that monthly settlement due on a pro
rata basis according to the excess of the Measured Price over the
Benchmark Price. There is no upper limit placed on the additional
proceeds receivable by the Company as part of the monthly
settlements and the amount available in subsequent months is not
affected. Should the Measured Price be below the Benchmark Price,
the Company will receive less than 100% of the monthly settlement
calculated on a pro rata basis and the Company will not be entitled
to receive the shortfall at any later date. As such, the final
determination of the total amounts to be received under the Sharing
Agreement will only be known after the 24 months have elapsed.
For example, if on a monthly settlement date the calculated
Measured Price exceeds the Benchmark Price by 10%, the settlement
on that monthly settlement date will be 110% of the amount due from
Lanstead on that date. If on the monthly settlement date the
calculated Measured Price is below the Benchmark Price by 10%, the
settlement on the monthly settlement date will be 90% of the amount
due on that date. Each settlement as so calculated will be in final
settlement of Lanstead's obligation on that settlement date.
Assuming the Measured Price equals the Benchmark Price on the
date of each and every monthly settlement, Oriole Resources would
receive 24 monthly settlement amounts of GBP73,625, totalling in
aggregate proceeds of GBP1,767,000 (before expenses) from the
Lanstead Subscription and Sharing Agreement. Examples of the
proceeds from the Sharing Agreement to be received each month,
based upon varying levels of average share price in the month, are
shown in the Appendix to this announcement.
In addition, the Company has agreed to issue to Lanstead
83,700,000 new Ordinary Shares ("Value Payment Shares") in
connection with entering into the Sharing Agreement.
In no event will fluctuations in the Company's share price
result in any increase in the number of Lanstead Subscription
Shares issued by the Company or received by Lanstead. The Sharing
Agreement allows both Lanstead and the Company to benefit from
future share price appreciation.
In total, Lanstead will be issued with 1,013,700,000 new
Ordinary Shares (including the 83,700,000 Value Payment Shares)
pursuant to the Lanstead Subscription which, when issued, will
equate to approximately 26.23% of the Company's enlarged issued
share capital following Admission.
No shares, warrants or additional fees are owed to Lanstead at
any point during this agreement other than those disclosed
above.
The Directors believe that the Sharing Agreement potentially
provides a number of benefits to the Company and its shareholders
including: the certainty of additional investment, albeit the
amount of proceeds to be received under the agreements is wholly
dependent on the Company's share price each month over the term of
the Sharing Agreement; the opportunity to benefit from positive
future share price performance; and that the amount of shares
issued is fixed, together with the cost of their issue.
Authority to allot shares
The allotment of the Lanstead Subscription Shares, and the Value
Payment Shares is being made pursuant to existing authorities to
allot shares and other relevant securities and to disapply
pre-emption rights under section 551 of the Companies Act 2006,
which the Directors were given at the Company's Annual General
Meeting held on 8 June 2023.
Admission and Total Voting Rights
Application will be made for the Lanstead Subscription Shares
and the Value Payment Shares to be admitted to trading on the AIM
market of the London Stock Exchange ("Admission"). It is
anticipated that Admission to AIM will occur at 8.00 am, on or
around 7 August 2023.
Following Admission the Company will have 3,864,539,005 Ordinary
Shares in issue. The figure of 3,864,539,005 may be used by the
Company's 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 Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
About Lanstead
Lanstead is a global investment firm that provides funding for
ongoing business objectives to listed small and mid-cap growth
companies. In London, Lanstead focus on equity investments in
companies already listed or quoted on the London Stock Exchange or
European exchanges and on management teams with a clear growth
strategy.
Lanstead's extensive experience allows it to invest in most
industries, focusing on providing supportive, longer-term capital
that rewards company growth. Companies with Lanstead on the
shareholder register via an equity placement to Lanstead with an
accompanying Lanstead sharing agreement can benefit from a unique
and flexible approach to finance growth. This provides the
opportunity for companies to benefit from additional cash beyond
the original placing proceeds without having to issue additional
shares.
Further information is available at www.Lanstead.com
Appendix - example returns from the Lanstead Sharing
Agreement
In relation to each of the months in the 24 month calculation
period:
Average 20 Day VWAP 0.1900p 0.2533p 0.3166p
Benchmark Price 0.2533p 0.2533p 0.2533p
------------- ------------- -------------
20-day VWAP as %
of Benchmark Price 75% 100% 125%
------------- ------------- -------------
Settlement from Lanstead GBP55,219 GBP73,625 GBP92,031
in the month
------------- ------------- -------------
Proceeds over 24-month GBP1,325,250 GBP1,767,000 GBP2,208,750
period if Average
20 Day VWAP is at
this level for the
entire period
------------- ------------- -------------
For further information please visit www.orioleresources.com,
@OrioleResources on Twitter, or contact:
Oriole Resources Plc Tel: +44 (0)23 8065 1649
Tim Livesey / Bob Smeeton / Claire
Bay
BlytheRay (IR/PR Contact) Tel: +44 (0)20 7138 3204
Tim Blythe / Megan Ray
Grant Thornton UK LLP Tel: +44 (0)20 7383 5100
Samantha Harrison / George Grainger / Ciara Donnelly
SP Angel Corporate Finance LLP Tel: +44 (0)20 3470 0470
Ewan Leggat / Harry Davies-Ball
Notes to Editors:
Oriole Resources PLC is an AIM-listed gold exploration company,
operating in West Africa. It is focussed on early-stage exploration
in Cameroon, where the Company has a maiden Resource of 305,000 oz
Au in the JORC Inferred category at the Bibemi project and has
identified multi-kilometre gold and lithium anomalism within the
district-scale Central Licence Package project. At the more
advanced Senala gold project in Senegal, Oriole was advised by
IAMGOLD on 26 April 2023 that AGEM Senegal Exploration Suarl
('AGEM') was now a wholly-owned subsidiary of Managem Group. As
previously announced, AGEM has earned an initial 51% beneficial
interest by spending US$4 million and has the option to spend up to
a further US$4 million by 28 February 2024 to earn a further 19%
interest. Reverse Circulation drilling is planned as part of AGEM's
Year 6 programme at Senala. The Company also has several interests
and royalties in companies operating in East Africa and Turkey that
could deliver future cash flow.
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