Goldstone Resources - Gold Loan Agreement Finalised
("GoldStone" or the "Company")
Gold Loan Agreement Finalised
This Gold Loan, together with the
· 14% secured Gold Loan of up to 2,000 troy ounces of gold at a price of
- 200 troy ounces (
· The remaining 1,800 troy ounces (
- The Company has already requested drawdown of a further tranche of 500 troy ounces (
· Security has been granted to AIMS by way of a pledge over the share capital of the Company's wholly owned Ghanaian subsidiary,
· 120 million warrants, exercisable at
· The Gold Loan, together with the Bonds, will enable the Company to move forward towards commencing production, through the ongoing development of the open pit mine at the
- The Board currently anticipates first gold to be produced in Q4 2020
"I am very excited to announce the formalisation of the Gold Loan. This allows us to move forward with bringing the
"I look forward to updating shareholders as we progress the development of AKHM and move into production and achieve cashflows during 2020."
Further to the conditional term sheet entered into between AIMS and the Company as announced on
The main terms of the Loan Agreement and Pledge are summarised below.
· The Company and AIMS, a fund management and advisory business based in
· The principal amount of the Gold Loan is 2,000 troy ounces of gold, which at a fixed price of
- The Company has already drawn down 200 troy ounces, equating to
- Following entering into the Loan Agreement, the Company has already requested drawdown of a further tranche of 500 troy ounces, equating to
· The principal amount drawn under the Gold Loan will be repayable in such number of troy ounces as has been drawn under the Gold Loan or in cash, at the election of AIMS, 15 months from the date of the Loan Agreement (the "Maturity Date") (or earlier in the case of an event of default by the Company).
· The Gold Loan will accrue interest at 14% per annum, which is payable quarterly in arrears. Interest on the Gold Loan may be paid in gold, such amount based on the then current prevailing gold price, or in cash, at the election of AIMS. After
· If the Company repays the Gold Loan within six months of the date of the Loan Agreement, it must pay AIMS the full amount of interest which would have accrued on the amount borrowed had it been outstanding for the entire six-month period, less any interest already paid.
· The Company has granted 120 million warrants to AIMS to subscribe for 120 million Ordinary Shares, which will be exercisable at the Exercise Price until
· The Gold Loan is secured by way of a pledge over the Company's equity in GAL, the Company's wholly owned Ghanaian subsidiary which holds and will hold the Company's licences in the AKHM project. Should the Company default on repayment of the Gold Loan or any interest due on it, AIMS will be able to enforce the Pledge and call for the transfer to it of the issued share capital of this subsidiary.
· The Gold Loan is non-transferrable, without the consent of the Company.
· The Company will pay the reasonable costs of AIMS, including legal costs, incurred in relation to the Gold Loan, including in respect of the Loan Agreement and related security documentation.
· The Loan Agreement contains certain representations and warranties from the Company to AIMS, which must be repeated at each draw down. If such representations and warranties are no longer true, AIMS can refuse to make further funds available.
· If certain events occur prior to the Maturity Date, including if an insolvency event occurs in relation to the Company or GAL, or if the Company defaults in paying any interest when due on the Gold Loan, or if any representation or warranty given by the Company was untrue or misleading at the date it was given, AIMS may terminate the Loan Agreement and require the Gold Loan (together with all interest due thereon) to be repaid immediately.
The Gold Loan, together with the Bonds, will enable the Company to move forward towards commencing production, through the ongoing development of the
The application for the requisite environmental permit in respect of the
Following finalisation of the Gold Loan, the Company is now able to place a number of significant orders for plant and equipment, which will enable the Company to further optimise the Homase South development plan against the economics of the DEP, announced on
The Takeover Code
The exercise of the Warrants to be issued to AIMS may give rise to certain considerations under the Takeover Code ("Code"). Brief details of the Panel on Takeovers and Mergers (the "Panel"), the Code and the protections they afford are described below.
The Code is issued and administered by the Panel. The Code applies to all takeover and merger transactions, however effected, where the offeree company has its registered office in the
Rule 9 of the Code requires that any person who acquires, whether by a series of transactions over a period of time or not, an interest (as defined in the Code) in shares which, taken together with shares in which persons acting in concert with him are interested, carry 30% or more of the voting rights of a company which is subject to the Code, will normally be required to make a general offer to all of the remaining shareholders to acquire their shares (a "Mandatory Offer").
Similarly, when any person, together with any persons acting in concert with him, is interested in shares which, in aggregate, carry not less than 30% of the voting rights of such a company but not more than 50% of such voting rights, a Mandatory Offer will normally be required if any further interests in shares are acquired by any such person, or any person acting in concert with him. A Mandatory Offer under Rule 9 of the Code must be made in cash and at the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in shares in the company during the 12 months prior to the announcement of the offer.
Rule 9 of the Code further provides, inter alia, that where any person who, together with persons acting in concert with him, holds over 50% of the voting rights of a company and acquires an interest in shares which carry additional voting rights, then they will not normally be required to make a Mandatory Offer to the other shareholders to acquire their shares. However, the Panel may deem an obligation to make an offer to have arisen on the acquisition by a single member of a concert party of an interest in shares sufficient to increase his individual interest to 30% or more of a company's voting rights, or, if he already holds more than 30% but less than 50%, an acquisition which increases his interest in shares carrying voting rights in that company.
Under the Code, a concert party arises where persons acting together pursuant to an agreement or understanding (whether formal or informal) co-operate to obtain or consolidate control of, or to frustrate the successful outcome of an offer for a company, subject to the Code. Control means an interest, or interests, in shares carrying, in aggregate, 30% or more of the voting rights of a company, irrespective of whether such interest or interests give de facto control.
AIMS will, pursuant to the Warrants, have the potential to increase its aggregate interest in shares carrying voting rights in the Company up to a maximum of 120,000,000 Ordinary Shares representing, assuming that no other new Ordinary Shares have been issued, approximately 32.4% of the voting rights in the then enlarged issued share capital of the Company which, without a waiver of the obligations under Rule 9, would oblige AIMS and anyone in concert with it to make a Mandatory Offer under Rule 9 in certain circumstances.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.
For further information, please contact:
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Tel: +44 (0)20 7236 1177
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Tel: +44 (0)20 7409 3494
SI Capital Limited
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Tel: +44 (0)1483 413 500
The Company is focused on developing the Akrokeri-Homase project in south-western
The project hosts two former mines, the
This information is provided by RNS, the news service of the
Quick facts: GoldStone Resources
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