TIDMALBA
RNS Number : 8252D
Alba Mineral Resources PLC
24 February 2020
Alba Mineral Resources plc
(" Alba " or the " Company ")
Alba Secures up to GBP1,054,500 Investment Facility
Alba Mineral Resources plc (AIM: ALBA), the diversified mineral
exploration and development company, is pleased to announce that it
has entered into a convertible securities issuance deed (the
"Agreement") with a U.S.-based institutional investment fund
managed by Bergen Asset Management, LLC to provide up to
GBP1,054,500 of funding in the form of the issuance by the Company
of unsecured zero coupon convertible securities (the "Convertible
Securities").
Highlights
-- Unsecured financing in the amount of GBP767,000 (which can be
increased by mutual consent to up to GBP1,054,500 ), provided by
U.S. based institutional fund, Bergen Global Opportunity Fund, LP
("Investor").
-- Financing will be structured by way of the issue by the
Company of zero-coupon, unsecured Convertible Securities, the
initial tranche of which will be redeemable at a premium to the
subscription price.
-- The Investor will have the right to convert the Convertible
Securities into Alba ordinary shares ("Shares") based on the
volume-weighted average price ("VWAP") of Alba shares during a
specified period prior to conversion or, in respect of a limited
amount of Convertible Securities, at GBP0.001625 .
-- The financing is structured in such a way as to provide Alba
with funding at regular intervals over the next 18 months, allowing
the Company to fund key value-enhancing work activities across its
mining portfolio. Such further funding will be subject to the
fulfilment, at each funding stage, of certain conditions and
warranties by the Company.
George Frangeskides, Executive Chairman of Alba, commented :
"This financing provides Alba with a significant funding source
for the year ahead. In traditional private placements, placing
shares are issued up-front and therefore the full dilutionary
impact occurs on the closing of the placing. By contrast, the
structure of this financing package provides the Company with an
opportunity to increase its share price during the course of this
year which, if successful, would mean that the shares would be
issued at higher prices, resulting in less dilution for existing
shareholders."
"The terms of this financing incorporate a significant degree of
flexibility for Alba, including the ability to pause the funding
tranches and even to terminate the financing early. This means that
the Company has secured not only an important funding stream, but
also has the ability to draw a line under the financing as and when
our divestment strategy comes to fruition and generates sufficient
funds by itself to enable us to drive our key projects forward
without the need for external financing."
Terms of Issue
The Convertible Securities will (subject to satisfaction of
certain conditions) be issued in up to five tranches as
follows:
-- The initial Convertible Security will have the purchase price
of GBP192,000 and a nominal value of GBP223,000 and will be issued
at the First Closing which is expected to take place in the next
seven days.
-- The second Convertible Security (which will have the purchase
price and nominal value of GBP192,000 ) will be issued four months
after the Company's next shareholders' meeting (intended to be held
on or before the end of April 2020).
-- The third Convertible Security (which will have the purchase
price and nominal value of GBP153,000) and the fourth and fifth
Convertible Securities (which will each have the purchase price and
nominal value of GBP115,000) will each be issued four months after
the issue date of the preceding Convertible Security .
The total funding represented by the above Convertible
Securities, amounting to GBP767,000, may be increased to up to
GBP1,054,500 by mutual consent of the Company and Investor. Each of
the Convertible Securities will have a term of 24 months from its
issue date.
The Investor may elect to reduce the amount of Convertible
Securities, in the case of the second and third Convertible
Securities, to an amount equivalent to 3% of the Company's market
capitalisation as at the date of issue of those Convertible
Securities and, in the case of the fourth and fifth Convertible
Securities, to an amount equivalent to 2% of the Company's market
capitalisation as at the date of issue of those Convertible
Securities.
Each Convertible Security will be issued subject to the
satisfaction of certain conditions precedent. The Company will make
an announcement upon the issue of each Convertible Security.
In connection with the Agreement:
-- The Company will pay the Investor a commencement fee of
30,000,000 Shares (" Commencement Fee Shares "). The Company will
apply for admission of these Shares to trading on AIM, which is
expected to become effective on or about 27 February 2020 .
-- The Company will issue to the Investor 18,000,000 Shares at
par (i.e. GBP0.001 per share), and the Investor will pay for those
Shares at par at the First Closing (being the date of issue of the
first Convertible Security) (" Collateral Shares "). The Company
will apply for admission of these Collateral Shares to trading on
AIM, which is expected to become effective on or about 27 February
2020 .
-- The Investor may be required to make a further payment to the
Company in relation to the Collateral Shares once all of the
obligations of the Company under the Agreement have been finally
met and no amount remains outstanding to the Investor, depending on
the market price of Shares at that time.
-- The Company will issue 28,000,000 share warrants to the
Investor with an exercise period of 24 months from the date of
issue, entitling the Investor to subscribe for one Share per
Warrant at an exercise price per share of GBP0.001625 (the
"Warrants"). The Warrants will be issued on customary terms. If
exercised in full, the Warrant holders will hold 28,000,000 Shares
(aside from any Shares held as a result of conversion of the
Convertible Securities), or about 0.75% of the total enlarged
issued ordinary share capital of the Company.
-- Application will be made to the London Stock Exchange for the
admission to trading on AIM of all Shares issued and allotted upon
exercise of the Warrants and upon conversion of the Convertible
Securities. The Convertible Securities will only be issued to the
extent that the Company has corporate authority to do so.
Conversion and Redemption
The Convertible Securities will be convertible into Shares, in
whole or in part, at the option of the Investor. The conversion
price will be, at the Investor's election: (a) the average of five
daily volume-weighted average prices ("VWAP") of the Shares on AIM
during a specified period preceding the relevant conversion
("Conversion Price A") or (b) (as to no more than GBP192,000 of the
Convertible Securities), GBP0.001625 (being 135% of the average of
the daily VWAPs during the 20 consecutive trading days before the
execution date of the Agreement). The Company will make an
announcement each time any Convertible Securities are converted in
whole or in part and will specify in such announcement the relevant
conversion price .
Each Convertible Security will have a maturity of two years. To
the extent that, as at the maturity date for a Convertible
Security, there remains an amount outstanding in respect of that
Convertible Security (i.e. because the Investor has not elected to
convert all of that Convertible Security into Shares), the Company
may elect at maturity either to issue to the Investor such number
of Shares as is determined by dividing the amount outstanding by
Conversion Price A or to pay to the Investor the amount
outstanding.
The Company will have the right to repurchase the initial
Convertible Security for cash at 100% of its nominal value (without
a fee or penalty) within 90 days following its issue, save that the
Investor may in turn elect to exclude up to 30% of the nominal
value of that Convertible Security from that early redemption.
In the event that, upon exercise of any conversion rights, the
Conversion Price would have been less than the par value of the
Shares at the time of such exercise, the Company shall make an
additional issuance of Shares to the Investor to make up the
difference in value that the Investor would otherwise have
lost.
Restrictions agreed by the Company
For the duration of the Agreement and for a limited period
thereafter while the Investor still holds shares in the Company or
is still owed any sums by the Company:
(a) the Company has agreed not to enter into any other
structured equity financings of a similar type to the present
financing, save that this shall not preclude the Company from
undertaking private placements of the type it has undertaken in the
past; and
(b) the Company has agreed not to undertake certain actions
without the Investor's written approval (e.g. to dispose of a
substantial part of its assets other than on arm's length terms, to
change the nature of its business or to incur indebtedness that
ranks senior to or pari passu with the present financing).
Further, so long as there are amounts outstanding to the
Investor, the Company has given certain customary undertakings in
respect of its share capital, including not to modify the rights
attaching to Shares or to reduce its share capital and to ensure
that the Company retains sufficient share allotment authorities at
all times.
Restrictions agreed by the Investor
The Investor has agreed to certain limits on its ability to
dispose of Shares following a conversion of the Convertible
Securities. The Investor is also contractually precluded from
short-selling the Shares or undertaking certain other prohibited
activities in relation to the Shares .
Postponement and termination rights
The Company will have the right not to issue Convertible
Securities after the issue of the first Convertible Security if the
market price of Shares in a prescribed period is less than a floor
price of GBP0.0012 ("Floor Price"). The Company shall also have the
right to terminate the financing at any time on payment of a
cancellation fee of GBP30,000. Upon termination, any tranches of
Convertible Securities which have yet to be issued will no longer
fall to be issued.
If the daily VWAP per Share is equal to or less than the Floor
Price for two consecutive trading days, the Investor may elect to
postpone a subsequent issue of Convertible Securities by up to 60
days and, in the absence of a recovery in the share price, not to
advance the subsequent tranches. If the VWAP recovers above the
base price, the Company may, in certain circumstances, give notice
to reinstate the postponed issue of Convertible Securities.
Either the Company or the Investor may postpone the issue of any
of the 2(nd) to 5(th) Convertible Securities by up to 60 days. This
right may only be exercised by each of the parties once, in respect
of one tranche of Convertible Securities.
Use of proceeds
The proceeds from the issue of the Convertible Securities will
be used by the Company to advance its work programmes at the Clogau
Gold Project and Amitsoq Graphite Project in particular, and for
general working capital purposes.
Shareholders' meeting
Given that the Company's shares have recently traded on-market
at prices that are only marginally higher than their current par
value of GBP0.001, the Company will convene and hold a general
meeting at which resolutions shall be proposed for the purpose of
effecting a reduction in the par value of the Shares so that the
par value of one Share shall become GBP0.0001. Such reduction in
the par value of a company's shares is a legal mechanism permitted
under UK companies legislation and is often effected for reasons of
administrative convenience and efficacy and is not intended or
expected to have any bearing on the market value of the Shares. The
number of Shares in issue will remain unchanged if these
resolutions are passed. These resolutions will be included within
the notice of Annual General Meeting ("AGM") for the Company's AGM
which is expected to be held in April 2020. If these resolutions
are passed, all relevant fixed conversion, floor and base prices
under the Agreement will be amended in the same proportion as the
change in par value.
Total voting rights
Following admission of the Commencement Fee Shares and
Collateral Shares, the total number of ordinary shares in issue
will be 3,793,351,946 . The Company does not hold any ordinary
shares in treasury. Therefore, the total number of ordinary shares
with voting rights will be 3,793,351,946 . This figure may be used
by shareholders in the Company 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
share capital of the Company under the Financial Conduct
Authority's Disclosure and Transparency Rules.
About Bergen Asset Management LLC
Based in the U.S., Bergen Asset Management, LLC is an
institutional investor with a particular focus on direct
investments in small-cap companies around the world .
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information, please contact:
Alba Mineral Resources plc
George Frangeskides, Executive Chairman +44 20 3907 4297
Cairn Financial Advisers LLP ( Nomad
)
James Caithie / Liam Murray +44 20 7213 0880
First Equity Limited (Broker)
Jason Robertson +44 20 7374 2212
Alba's Project and Investment Portfolio
Project (commodity) Location Ownership
Mining Projects
Amitsoq (graphite) Greenland 90%
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Clogau (gold) Wales 90%
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Inglefield (copper, cobalt,
gold) Greenland 100%
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Limerick (zinc-lead) Ireland 100%
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Melville Bay (iron ore) Greenland 51%
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TBS (ilmenite) Greenland 100%
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Oil & Gas Investments
Brockham (oil) England 5%
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Horse Hill (oil) England 11.765%
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London Stock Exchange. RNS is approved by the Financial Conduct
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Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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February 24, 2020 02:00 ET (07:00 GMT)
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